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HSB 92

A bill for an act relating to the measurement of units sold for purposes of cigarette and tobacco regulation and taxation, and including effective date provisions.

2025-2026 Regular Session

The bill redefines “units sold” to equal the number of cigarettes taxed and sold in the state, measured by excise tax collected per manufacturer, with DOR issuing rules.

Committee report approving bill, renumbered as HF 795.
#cigarettes #taxation #tobacco
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Bill Summary · HSB 92

Summary of HSB 92 (renumbered as HF 795) – Measurement of Units Sold for Cigarette and Tobacco Taxation

Overview

HSB 92 seeks to redefine how “units sold” are counted for purposes of cigarette and tobacco regulation and taxation. The bill would update the statutory definition to tie units sold to the actual tax collection process and would grant rulemaking authority to the Department of Revenue to determine annual tax amounts paid by each tobacco product manufacturer. The act would take effect immediately upon enactment.

  • Sponsor/Status: Committee report approving bill; renumbered as HF 795
  • Introduced: January 28, 2025
  • Subject: Cigarettes, Taxation, Tobacco
  • Immediate effective date: Yes

Purpose and Intent

  • Align the measurement of “units sold” with how state excise taxes are collected.
  • Ensure that the calculation of units sold reflects the taxes associated with the cigarettes and roll-your-own tobacco sold in the state.
  • Provide the Department of Revenue with authority to establish how to determine annual tax paid by each manufacturer.

Key Provisions

  • Amends Section 453C.1, subsection 10 (Code 2025):
    • Defines “units sold” as the number of individual cigarettes sold in the state by the applicable tobacco product manufacturer, whether sold directly or through intermediaries (distributors, retailers, etc.), during the year in question.
    • Units sold are measured by excise taxes collected by the state on packs bearing the state excise stamp, or on roll-your-own tobacco containers for which tax is due under Chapter 453A.
    • Requires the Department of Revenue to adopt rules necessary to ascertain the amount of state excise tax paid on cigarettes of each tobacco product manufacturer for each year.
  • Effective date: Immediate upon enactment.

Affected Parties and Impacts

  • Tobacco product manufacturers, distributors, and retailers operating in the state.
  • Roll-your-own tobacco producers and sellers, due to the 453A tax framework.
  • Iowa Department of Revenue, which would implement the rulemaking to determine annual tax paid by each manufacturer.
  • Regulatory and compliance landscape may shift to reflect the updated metric for calculating “units sold.”

Procedural and Timeline Details

  • Introduced: Jan 28, 2025; referred to Ways and Means.
  • Subcommittee: Met Feb 19, 2025; recommended passage.
  • Committee action: Subcommittee report Feb 19; Committee report recommending passage Feb 25 (yea 24–0, excused 1).
  • Renumbering: Bill renumbered as HF 795 during committee action (Committee report dated Mar 5, 2025).

Practical takeaways

  • The bill changes the basis for calculating “units sold” from a broader notion to a tax-based measurement, anchored to excise taxes collected on stamped cigarette packs and roll-your-own tobacco taxed under Chapter 453A.
  • It delegates rulemaking to the Department of Revenue to operationalize the annual tax-paid calculation per manufacturer, which could influence tax reporting and revenue projections.

Next Steps

  • If enacted, expect Department of Revenue rulemaking to specify methodologies for determining annual tax paid by each manufacturer and any reporting requirements tied to the updated unit definition.

Compiled from official sources — confirm details with the bill’s official record.

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