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2010 Tobacco Tax Legislation

In 2010, the Maryland General Assembly passed and the Governor signed the following statewide and local bills related to  tobacco tax regulation and enforcement.  For more information, visit the Maryland General Assembly’s Web site.

TOBACCO

STATEWIDE:

 

Chapter 388 - House Bill 88 – Other Tobacco Products Licenses

 

This bill creates a new Title 16.5 in the Business Regulations Article establishing other tobacco products licenses for manufacturers, wholesalers and retailers. Modeled in general after the cigarette licensure statute in Title 16 of the Business Regulations Article, “other tobacco products” “OTP”) licenses are created for in-state manufacturers, in-state or out-of-state wholesalers, and in-state retailers. The Comptroller will administer the OTP manufacturer and wholesaler licenses, and the Clerks of the Court will administer the OTP retailer licenses and tobacconist licenses.

 

OTP manufacturers located in Maryland must obtain an OTP manufacturer license, but there is no license requirement for out-of-state manufacturers. All OTP wholesalers must obtain a Maryland OTP wholesaler license. OTP wholesalers must sell OTP directly tax-paid to licensed OTP retailers. OTP licensed wholesalers must file monthly tobacco tax returns and pay the 15% OTP tax based on the wholesale price. OTP manufacturers, both unlicensed out-of-state and licensed in-state, may sell OTP not tax-paid directly to a licensed OTP wholesaler. Also, an OTP manufacturer, unlicensed or licensed, may sell OTP not tax-paid directly to a licensed tobacconist, and may sell premium cigars or pipe tobacco not tax-paid directly to an OTP licensed retailer.  

 

A tobacconist license is an additional license created under this bill, which allows tobacconists to purchase OTP directly from an OTP manufacturer. The licensed tobacconists must file quarterly tobacco tax returns and pay the 15% OTP tax based on the wholesale price. OTP licensed retailers may purchase “premium cigars” and “pipe tobacco” directly from an OTP manufacturer. The OTP retailer must file quarterly tobacco tax returns and pay the 15% OTP tax based on the wholesaler price; otherwise, the OTP retailer must purchase all other OTP tax-paid from a licensed OTP wholesaler. The bill also creates an OTP storage warehouse license for facilities in Maryland to store OTP not tax-paid on behalf of an OTP manufacturer.   

 

License fees, administrative hearing procedures, recordkeeping requirements, and criminal sanctions are provided for in the bill.  OTP wholesalers, OTP retailers, and tobacconists who have a cigarette license are not required to pay the OTP license fees. An OTP wholesaler must post a surety bond in order to obtain a license. Sale of OTP through the internet is prohibited. EFFECTIVE MAY 1, 2011

 

Chapter 169 - House Bill 1205 – Montgomery County – Alcoholic Beverages

License Fees – Repeal of Sunset

 

This bill repeals the termination date of June 30, 2010 for the issuance of a Class B beer, wine and liquor license for hotels and restaurants, and a Class B beer, wine and liquor license for a performing arts facility in Montgomery County as provided for in Article 2B, § 6-201(q). EFFECTIVE JUNE 1, 2010

 

Chapter 440 – House Bill 823 – Montgomery County – Winery Special Event Permits – Farmers’ Markets

 

In addition to the 12 winery special event permits that may be issued to a Class 4 limited winery, this bill authorizes the Comptroller to issue up to 12 winery special event permits to a Class 4 limited winery for use at a Farmer’s Market in Montgomery County. The permittee may not sell wine by the glass, and alcohol awareness certification is required for the permittee and the Farmer’s Market administrator. EFFECTIVE JUNE 1, 2010

 

Chapter 42 – Senate Bill 151 – Prince George’s County – Alcoholic Beverages – Class B-AE (Arts and Entertainment) License

 

This bill authorizes the Board of License Commissioners in Prince George’s County to issue a Class B-AE (Arts and Entertainment) beer, wine and liquor license to an establishment in the Prince George’s County Arts and Entertainment District. The licensee may sell beer, wine, and liquor for on-premise consumption. No more than 2 Class B-AE licenses may be issued to a person. EFFECTIVE OCTOBER 1, 2010

 

Chapter 156  - House Bill 567 – Prince George’s County – Alcoholic Beverages – License Fees and Salaries of Inspectors

 

This bill increases the annual license fees in Prince George’s County for many and various retail licenses; repeals the Class B beer, wine and liquor license (“arena license”); increases the alcoholic content from 14% to 15.5% for wine provided under the wine tasting (WT) license; and establishes an annual salary of $10,900 for inspectors removing the amount of salary from the discretion of the County Council.  EFFECTIVE JULY 1, 2010

 

Chapter 157 - House Bill 573 – Prince George’s County – Alcoholic Beverages – Class A/Class 4 Light Wine Licenses

 

This bill adds Prince George’s County to the list of counties authorized to issue a Class A light wine license to a Class 4 limited winery. The Class A/Class 4 license is exempt from quotas established by the Board of License Commissioners for Prince George’s County for the election district where the winery is located. EFFECTIVE JULY 1, 2010

 

Chapter 158 - House Bill 574 – Prince George’s County – National Harbor – Alcoholic Beverages – Restriction on License Holder

 

This bill prohibits the Board of License Commissioners for Prince George’s County from issuing a special 3-day Class C beer, wine and liquor license to a nonprofit organization for use at the National Harbor for more than 2 consecutive years. EFFECTIVE JULY 1, 2010

 

Chapter 420 – House Bill 559 – Prince George’s County – Winery Special Event Permits – Farmers’ Markets

 

In addition to the 12 winery special event permits that may be issued to a Class 4 limited winery, this bill authorizes the Comptroller to issue up to 12 winery special event permits to a Class 4 limited winery for use at a Farmer’s Market in Prince George’s County. The permittee may not sell wine by the glass, and alcohol awareness certification is required for the permittee and the Farmer’s Market administrator. EFFECTIVE JUNE 1, 2010

 

Chapter 422 – House Bill 570 – Prince George’s County – Alcoholic Beverages – Extinguishment of Licenses

 

This bill authorizes the Board of License Commissioners in Prince George’s County to issue a Class A license for purposes of having the license extinguished when the licensee has possession. Within 10 days of possession, the licensee must surrender the license to the Board, and provide evidence that all taxes or obligations to wholesalers or other persons have been paid. This Class A license will count towards the maximum number of Class A licenses that may be issued. EFFECTIVE JULY 1, 2010

 

Chapter 423 – House Bill 571 – Prince George’s County – Alcoholic Beverages Licenses – Waterfront Entertainment Retail Complex

 

This bill authorizes the Board of License Commissioners for Prince George’s County to issue a special Class D beer and wine license to an establishment in a waterfront entertainment retail complex defined in the county zoning ordinance, or an individual or entity that holds an event in the property of a conceptual site plan at least part of which includes a waterfront entertainment retail complex. The licensee may sell beer and wine on-premises and off-premises 7 days a week.   EFFECTIVE JUNE 1, 2010

 

Chapter 425 - House Bill 582 – Prince George’s County – Issuance of Alcoholic Beverages Licenses and Park Permits– Notification

 

This bill requires the Board of License Commissioners of Prince George’s County when issuing a special Class C beer, wine and liquor license to notify the Chief of Police, the Fire Chief, the Director of the Department of Environmental Resources, and if applicable, the municipal corporation where the event will occur, regarding the time, place, and expected size of event. Also, when a use and occupancy permit is issued allowing public entertainment to be held for an association, club, society, or other organization, the following must be notified: Board of License Commissioners for Prince George’s County, Chief of Police, the Fire Chief, Director of the Department of Environmental Resources, and if applicable, the municipal corporation where the entertainment will occur.  EFFECTIVE JUNE 1, 2010

 

Chapter 475 - House Bill 1478 – Prince George’s County – Beer, Wine, and Liquor Tastings

 

This bill authorizes the Board of License Commissioners in Prince George’s County to issue a beer tasting license, and a beer/wine tasting to holders of a beer, wine and liquor (BWL) or a beer and wine (BW) license. A Class B beer licensee may obtain a beer tasting license. The beer tasting or beer/wine tasting licensee may not serve more than 3 ounces from each brand of beer, and no more than 1 ounce from each brand of wine, to any one person. The Board is also authorized to issue a beer, wine, and liquor tasting (BWLT) license to a holder of a beer, wine and liquor license. The BWLT licensee may provide one-half of an ounce of liquor from a brand and 1.5 ounces from all brands to any one person in a single day for tasting and sampling. Quantity limitations applicable to the consumption of beer and wine apply to the BWLT tasting license. EFFECTIVE JULY 1, 2010

 

Chapter 684 - House Bill 558 – Prince George’s County – Alcoholic Beverages – Entertainment Permit

 

This bill authorizes the Board of Liquor License Commissioners for Prince George’s County issue a special entertainment permit to a holder of a Class B (on-sale) license. Before issuing the permit, the Board is required to hold a public hearing to determine whether the permit should be issued. The permittee may from 9:00 p.m. to 2:00 a.m. impose a cover charge, offer facilities for patron dancing, and provide entertainment. An applicant must submit a security plan to the Board and the Chief of the Prince George’s County Police Department. If necessary, the Circuit Court may issue a temporary restraining order to immediately close the premises if there is a threat to public health, safety, or welfare. A permittee is give due process rights if action is taken by the Board or Circuit Court. EFFECTIVE JULY 1, 2010

 

Chapter 170 - House Bill 1309 – Somerset and Worcester Counties – Liquor Control Boards – Ethics

 

This bill includes the Liquor Control Board for Somerset County and the Liquor Control Board for Worcester County in the definition of “executive unit” for purposes of the Maryland Public Ethics Law to make clear that this law applies to the liquor control boards. EFFECTIVE OCTOBER 1, 2010

 

Chapter 675 - House Bill 451 - Somerset County – Alcoholic Beverages – Sales to Underage Drinkers – Local Caterer’s License Created

 

This bill authorized the Board of License Commissioner for Somerset County to issue a local caterer’s license to a holder of a Class B restaurant or hotel (on-sale) beer and light wine license, or a Class B restaurant or hotel (on-sale) beer, wine and liquor license. The caterer’s licensee may provide alcoholic beverages allowed under the Class B license for off-premise consumption at a catered event where food is served.

 

In addition, this bill adds Somerset County to the list of counties where the granting of probation before judgment to a licensee or employee of a licensee for violating the prohibition of alcoholic beverage sales to minors or intoxicated persons does not bar the Board of Licensee Commissioners from taking administrative action against the licensee. EFFECTIVE JULY 1, 2010

 

Chapter 360 – Senate Bill 904 – St. Mary’s County – Alcoholic Beverages – Class A Off-Sale License Quota

 

This bill prohibits the Board of License Commissioners for St. Mary’s County from issuing more than one Class A retail off-sale license for each unit of 1,350 people in each election district using the most recent St. Mary’s County Planning Commission Annual Report for population figures. This quota limit applies to transfers of licenses among election districts. EFFECTIVE JULY 1, 2010

 

Chapter 411 (House Bill 399) – Washington County – Alcoholic Beverages – Beer Tasting License

 

This bill authorizes the Board of License Commissioners for Washington County to issue a beer tasting (BT) license to a holder of a Class A or Class B beer and wine (BW) license, or a Class A or Class B beer, wine and liquor (BWL) license. The BT license allows consumption of beer for tasting only at no charge. The Board shall regulate the quantity of beer served, and the number and size of bottles. EFFECTIVE JULY 1, 2010

 

Chapter 245 – Senate Bill 195 – Wicomico County - Alcoholic Beverages – Micro-Brewery Licenses

 

This bill adds Wicomico County to the list of jurisdictions where a Class 7 micro-brewery license may be issued by the Comptroller. This Class 7 micro-brewery license provides the holder with on-sale and off-sale privileges. The Class 7 licensee must have a Class B beer, wine and liquor (on-sale) license for use on the premises of a restaurant, and under the Class 7, may sell at retail up to 4,000 barrels of beer annually for on-premise consumption. The Class 7 licensee may sell at retail for consumption off-premises beer in refillable containers sealed by the micro-brewery licensee at the time of each refill.  EFFECTIVE JULY 1, 2010

 

Chapter 419 - House Bill 551 – Wicomico County Alcoholic Beverages Act of 2010

 

This bill authorizes the Board of License Commissioners for Wicomico County to issue a beer tasting (BT) license and a beer and wine tasting (BWT) tasting license to a Class A beer and wine (off-sale) licensee, or a Class A beer, wine and liquor (off-sale) licensee. An individual may be served for on-premises consumption a tasting or sampling of not more than 1 ounce of wine from each brand, and 3 ounces of beer from each brand. No more than 6 bottles of wine may be open at any one time at a wine or beer and wine sampling or tasting event, and no more than 6 containers of beer may be open at any one time at a beer or beer and wine sampling or tasting event.  The Board must receive 5 days notice before an event.

 

Also, the bill repeals the requirement that a Class B beer, wine and liquor licensee, who obtains a Class 7 micro-brewery license under Article 2B, § 12-104(e)(5)(ii), may only sell beer for off-premises consumption to a licensed wholesaler. Under Article 2B, § 12-104(e)(5)(iii), a Class 6 pub-brewery license or Class 7 micro-brewery license may be issued to a Class B beer, wine and liquor licensee for a location in any enterprise zone in Wicomico County, not only the City of Salisbury.

 

Finally, a provision is added to Article 2B, § 12-302 allowing an individual who is at least 16 years of age and has a work permit to be employed at a licensed premise to stock alcoholic beverages or clear tables and bar areas. EFFECTIVE JULY 1, 2010.

 

Chapter 470 - House Bill 1431 – Worcester County – Alcoholic    Beverages  – Pub-Breweries and Micro-Breweries

 

This bill adds Worcester County to the list of counties where a Class 6 pub-brewery license and a Class 7 micro-brewery license may be issued by the Comptroller. It also adds Worcester County to the list of counties that allow a Class 7 micro-brewery licensee to sell at retail beer brewed on the licensed premise for off-premise consumption in refillable containers sealed at the time of refill. EFFECTIVE JULY 1, 2010

 

Chapter 388 - House Bill 88 – Other Tobacco Products Licenses  

 

This bill creates a new Title 16.5 in the Business Regulations Article establishing other tobacco products licenses for manufacturers, wholesalers and retailers. Modeled in general after the cigarette licensure statute in Title 16 of the Business Regulations Article, “other tobacco products” (“OTP”) licenses are created for in-state manufacturers, in-state or out-of-state wholesalers, and in-state retailers. The Comptroller will administer the OTP manufacturer and wholesaler licenses, and the Clerks of the Court will administer the OTP retailer licenses and tobacconist licenses.

 

OTP manufacturers located in Maryland must obtain an OTP manufacturer license, but there is no license requirement for out-of-state manufacturers. All OTP wholesalers must obtain a Maryland OTP wholesaler license. OTP wholesalers must sell OTP directly tax-paid to licensed OTP retailers. OTP licensed wholesalers must file monthly tobacco tax returns and pay the 15% OTP tax based on the wholesale price. OTP manufacturers, both unlicensed out-of-state and licensed in-state, may sell OTP not tax-paid directly to a licensed OTP wholesaler. Also, an OTP manufacturer, unlicensed or licensed, may sell OTP not tax-paid directly to a licensed tobacconist, and may sell premium cigars or pipe tobacco not tax-paid directly to an OTP licensed retailer.  

 

A tobacconist license is an additional license created under this bill, which allows tobacconists to purchase OTP directly from an OTP manufacturer. The licensed tobacconists must file quarterly tobacco tax returns and pay the 15% OTP tax based on the wholesale price. OTP licensed retailers may purchase “premium cigars” and “pipe tobacco” directly from an OTP manufacturer. The OTP retailer must file quarterly tobacco tax returns and pay the 15% OTP tax based on the wholesaler price; otherwise, the OTP retailer must purchase all other OTP tax-paid from a licensed OTP wholesaler. The bill also creates an OTP storage warehouse license for facilities in Maryland to store OTP not tax-paid on behalf of an OTP manufacturer.   

 

License fees, administrative hearing procedures, recordkeeping requirements, and criminal sanctions are provided for in the bill.  OTP wholesalers, OTP retailers, and tobacconists who have a cigarette license are not required to pay the OTP license fees. An OTP wholesaler must post a surety bond in order to obtain a license. Sale of OTP through the internet is prohibited. EFFECTIVE MAY 1, 2011

 



 
Links for Tobacco Tax Legislative Updates
Business Tax Types
Tobacco Tax
Tax Information
Tax Regulations
Tobacco Tax Legislative Updates
  2012 Tobacco Tax Legislation
  2010 Tobacco Tax Legislation
  2009 Tobacco Tax Legislation
  2008 Tobacco Tax Legislation
  2007 Tobacco Tax Legislation
 
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