Cigar tax-cap discussions echo Main Street Fairness arguments
The House Appropriations Committee heard testimony Wednesday on SB 476, a bill that would ensure the 50-cent tax cap remains in place for individual cigars. Testimony focused on arguments similar to those used to support Main Street Fairness, including concerns that consumers are purchasing cigars tax free directly from manufacturers online. Cigar manufacturers that do not have a physical presence in Michigan can avoid collecting the Other Tobacco Products tax. Consumers should be remitting the tax on their own, but many do not realize the cigars are not being taxed and they owe the tax to the state.
Legislators primarily raised health-related concerns over the use of tobacco products, rather than the content of the bill. Those concerned felt that despite the loss of tax revenue to out-of-state vendors, keeping the lower cap would create a tax disparity between the 32 percent tax on other tobacco products and cigars. Next week the committee will be discussing the executive budget, but may take up SB 476 the following week.
Other items to note:
GROCERY/CONVENIENCE:
- Social media promotions: Legislation introduced on January 27 as SB 722 would define and allow social media promotions in advertising alcohol sales. The bill would allow retailers, wholesalers, manufacturers, vendors and brokers to use unpaid social media to advertise an on-premise brand promotion, tastings or which retail locations offer a specific product. Similar legislation was introduced in the House on January 27 as HB 5257. SB 722 was scheduled to come up for testimony in the Senate Regulatory Reform Committee on Wednesday, but was postponed as the sponsor works to incorporate several amendments.
PHARMACY
- Med Sync: The House Insurance Committee plans to hold a hearing on SB 150 on Thursday, February 11. The legislation would remove some of the barriers to expand synchronization of medication by ensuring that insurers provide a prorated daily rate for medications during the synchronization period. MRA plans to submit written testimony in support of the bill, as we did when the bill was up for debate in the Senate.
REGULATIONS
- Drones: The House approved legislation on January 28 that would criminalize the use of drones for surveillance or stalking (HB 4868). The Senate Judiciary Committee has scheduled a hearing for February 9 at 1:00 p.m.
- Franchises: Several bills (HB 5070–5073) clarifying franchisee/franchisor responsibilities under various state acts related to MIOSHA violations, minimum wage violations, and contributions and benefit laws were reported by the Senate Commerce Committee on Wednesday.
- Security guards: The House Regulatory Reform Committee reported legislation creating licensing and regulations for security guards and security guard agencies on Thursday. The bills, SB 161–162, SB 164 and HB 4253–4254, are in response to an unfortunate incident that occurred at Pontiac’s Northland Center Mall in 2014. A man suffocated while several security guards detained him by holding him down while waiting for police to arrive. The death was ruled an accident and could have been avoided if the security guards had received more training. Legislators have a number of concerns with the bills, and it is uncertain if they will receive a vote by the full House.
TAXES
- Direct mail: HB 5132–5133, to require taxation of direct mail to comply with the Streamlined Sales & Use Tax Agreement (SSUTA), was reported by the House Tax Policy Committee on Wednesday.
- Feminine hygiene products: Legislation to exempt feminine hygiene products from the sales tax was recently introduced as HB 5234. Proponents argue that the products are a necessity, not a luxury, and should be tax free. The bill is being referred to as the “tampon tax.”
OTHER
- Aggressive panhandling: The House Criminal Justice Committee held a hearing on legislation aimed at prohibiting aggressive solicitation/panhandling in a public place. The legislation, HB 5103–5104, would make it a misdemeanor to aggressively solicit donations in a manner that harasses or intimidates in a public place or within 15 feet of the entrance to a bank or ATM.
- Recycling measurement: Legislation designed to collect information on recycling already happening in Michigan, as a step toward determining a statewide comprehensive recycling plan, is scheduled for a hearing in the House Natural Resources Committee on February 9. The bill, SB 507, does not require retailers to report recycling activities.
- Snowplow lights: Newly introduced HB 5247 would allow oscillating green lights to be used on snowplow vehicles. Currently, only flashing yellow or amber lights can be used.
