SB 720 Summary

• Amends Michigan's tobacco products tax act to add new definitions including cigarette making machines, gray market cigarettes, hookah tobacco, and wrap products, with expanded regulatory framework for tobacco product licensing and taxation.

• Establishes new creditor exemption (Section 3a) allowing creditors who acquire tobacco products through security interests to sell without a license if approved by the department and sold to licensed wholesalers or unclassified acquirers.

• Implements reduced tax rates for FDA-approved modified risk tobacco products: 50% reduction for modified risk orders under 21 USC 387k(g)(1) and 25% reduction for orders under 21 USC 387k(g)(2), effective 180 days after enactment.

• Adds Section 6f establishing a process for the department to remove tobacco product manufacturers from the approved directory if they fail to meet escrow obligations, pay required equity assessments, or violate master settlement agreement requirements, with a 15-day cure period and hearing rights.

• Increases penalties for unlicensed tobacco product possession and sales, with felony charges for possessing 3,000+ cigarettes or counterfeit cigarettes and civil infractions for possession of 180-599 cigarettes or equivalents of other tobacco products.