House Bill 196 Summary

• Establishes that the legal incidence of Idaho's cigarette excise tax (57¢ per 20-cigarette package) falls on the purchaser rather than the wholesaler, overruling a 1973 Idaho Supreme Court decision that prohibited taxation of on-reservation cigarette sales.

• Imposes the state cigarette tax on all cigarettes shipped to or delivered onto Indian reservations, except those purchased by enrolled tribal members on their own tribe's reservation who are entitled to an exemption.

• Allows enrolled tribal members to claim credits and refunds for state cigarette taxes paid, with implementation through either individual recordkeeping or a tribal election to use a state tax commission estimate based on average adult cigarette consumption.

• Provides a tax credit against Idaho's state cigarette tax for any excise tax imposed by Indian tribes on the same cigarette purchases, not to exceed the state tax rate.

• Amends the definition of "cost" for tobacco products to include applicable state cigarette excise taxes, and makes the act effective July 1, 2011, with temporary rulemaking authority for the state tax commission immediately upon passage.