Bill Summary – FastDemocracy

67th Legislature                                                                                                   SB 381.1
                                                  SENATE BILL NO. 381
                                             INTRODUCED BY S. MORIGEAU
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   A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING LAWS RELATED TO CANNABIDIOL
   PRODUCTS; PROHIBITING SALES OF CANNABIDIOL PRODUCTS TO MINORS; PROVIDING A PENALTY
   FOR SALES OF CANNABIDIOL PRODUCTS TO MINORS; PROVIDING FOR A TAX ON GROSS SALES OF
   CANNABIDIOL RETAILERS; REQUIRING TESTING OF CANNABIDIOL PRODUCTS; PROVIDING THAT
   TESTED CANNABIDIOL PRODUCTS BE LABELED; PROHIBITING THE SALE OF CANNABIDIOL
   PRODUCTS THAT DO NOT MEET TESTING STANDARDS; PROVIDING FOR LICENSING OF TESTING
   LABORATORIES TO TEST CANNABIDIOL PRODUCTS; PROVIDING FOR A CANNABIDIOL TESTING
   STATE SPECIAL REVENUE ACCOUNT; PROVIDING THAT REVENUE FROM THE GROSS SALES TAX,
   LICENSE FEES, AND PENALTIES FOR SALES TO MINORS BE DEPOSITED IN THE ACCOUNT;
   PROVIDING THAT EXCESS REVENUE BE USED TO FUND MONTANA PROMISE GRANTS AND K-12
   EDUCATION; PROVIDING DEFINITIONS; PROVIDING RULEMAKING AUTHORITY; AND PROVIDING
   EFFECTIVE DATES.”
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   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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              NEW SECTION. Section 1.       Definitions. As used in [sections 1 through 9], the following definitions
   apply:
              (1)   "Cannabidiol" means a nonpsychoactive cannabinoid found in the plant Cannabis sativa L. or
   Cannabis indica that is essentially free from plant material and has a tetrahydrocannabinol level of no more
   than 0.3%.
              (2)   "Cannabidiol product" means a product that contains cannabidiol and is intended for human use.
              (3)   "Cannabidiol retailer" means a person who sells cannabidiol products.
              (4)   "Department" means the department of revenue provided for in 2-15-1301.
              (5)   "Person" means an individual, firm, partnership, corporation, association, company, committee,
   other group of persons, or other business entity, however formed.
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              (6)   "Purchaser" means a person to whom a sale of a cannabidiol product is made.
              (7)   "Retail price" means the established price for which a cannabidiol retailer sells a cannabidiol
   product to a purchaser before any discount or reduction.
              (8)   "Sale" or "sell" means any transfer of cannabidiol products for consideration, exchange, barter,
   gift, offer for sale, or distribution in any manner or by any means.
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              NEW SECTION. Section 2.         Tax on cannabidiol retailer. (1) There is a 4% tax on the gross sales of
   a cannabidiol retailer. The tax is payable four times a year.
              (2)   A cannabidiol retailer shall submit a quarterly report to the department listing the total dollar
   amount of sales of cannabidiol products in the state. The report must:
              (a)   be made on forms prescribed by the department; and
              (b)   be submitted within 15 days following the end of each calendar quarter.
              (3)   At the time the report is filed, the cannabidiol retailer shall submit a quarterly payment equal to 4%
   of the total dollar amount of sales.
              (4)   The department shall deposit the taxes paid under this section in the cannabidiol testing state
   special revenue account provided for in [section 16].
              (5)   The tax imposed by [sections 1 through 9] and related interest and penalties are a personal debt
   of the person required to file a return from the time that the liability arises, regardless of when the time for
   payment of the liability occurs.
              (6)   For the purpose of determining liability for the filing of statements and the payment of taxes,
   penalties, and interest owed under [sections 1 through 9]:
              (a)   the officer of a corporation whose responsibility it is to truthfully account for and pay to the state
   taxes provided for in [sections 1 through 9] and who fails to pay the taxes is liable to the state for the taxes and
   the penalty and interest due on the amounts;
              (b)   each officer of the corporation, to the extent that the officer has access to the requisite records, is
   individually liable along with the corporation for filing statements and for unpaid taxes, penalties, and interest
   upon a determination that the officer:
              (i)   possessed the responsibility to file statements and pay taxes on behalf of the corporation; and
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              (ii) possessed the responsibility on behalf of the corporation for directing the filing of statements or the
   payment of other corporate obligations and exercised that responsibility, resulting in the corporation's failure to
   file statements required by [sections 1 through 9] or pay taxes due as required by [sections 1 through 9];
              (c)   each partner of a partnership is jointly and severally liable, along with the partnership, for any
   statements, taxes, penalties, and interest due while a partner;
              (d)   each member of a limited liability company that is treated as a partnership or as a corporation for
   income tax purposes is jointly and severally liable, along with the limited liability company, for any statements,
   taxes, penalties, and interest due while a member;
              (e)   the member of a single-member limited liability company that is disregarded for income tax
   purposes is jointly and severally liable, along with the limited liability company, for any statements, taxes,
   penalties, and interest due while a member; and
              (f)   each manager of a manager-managed limited liability company is jointly and severally liable, along
   with the limited liability company, for any statements, taxes, penalties, and interest due while a manager.
              (7)   In determining which corporate officer is liable, the department is not limited to considering the
   elements set forth in subsection (6)(a) to establish individual liability and may consider any other available
   information.
              (8)   In the case of a bankruptcy, the liability of the individual remains unaffected by the discharge of
   penalty and interest against the corporation. The individual remains liable for any statements and the amount of
   taxes, penalties, and interest unpaid by the entity.
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              NEW SECTION. Section 3.          Returns -- payment -- recordkeeping -- authority of department. (1)
   Each cannabidiol retailer shall file a return, on a form provided by the department, and pay the tax due as
   provided in [section 2].
              (2)   Each return must be authenticated by the person filing the return or by the person's agent
   authorized in writing to file the return.
              (3)   (a) A person required to pay to the department the taxes imposed by [sections 1 through 9] shall
   keep for 5 years:
              (i)   all receipts issued; and
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              (ii) an accurate record of all sales of cannabidiol products, showing the name and address of each
   purchaser, the date of sale, and the quantity, kind, and retail price of each cannabidiol product sold.
              (b)   For the purpose of determining compliance with the provisions of [sections 1 through 9], the
   department is authorized to examine or cause to be examined any books, papers, records, or memoranda
   relevant to making a determination of the amount of tax due, whether the books, papers, records, or
   memoranda are the property of or in the possession of the person filing the return or another person. In
   determining compliance, the department may use statistical sampling and other sampling techniques consistent
   with generally accepted auditing standards. The department may also:
              (i)   require the attendance of a person having knowledge or information relevant to a return;
              (ii) compel the production of books, papers, records, or memoranda by the person required to attend;
              (iii) implement the provisions of 15-1-703 if the department determines that the collection of the tax is
   or may be jeopardized because of delay;
              (iv) take testimony on matters material to the determination; and
              (v)   administer oaths or affirmations.
              (4)   Pursuant to rules established by the department, returns may be computer-generated and
   electronically filed.
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              NEW SECTION. Section 4.        Deficiency assessment -- penalty and interest -- statute of
   limitations. (1) If the department determines that the amount of the tax due is greater than the amount
   disclosed by a return, it shall mail to the cannabidiol retailer a notice, pursuant to 15-1-211, of the additional tax
   proposed to be assessed. The notice must contain a statement that if payment is not made, a warrant for
   distraint may be filed. The cannabidiol retailer may seek review of the determination pursuant to 15-1-211.
              (2)   Penalty and interest must be added to a deficiency assessment as provided in 15-1-216. The
   department may waive any penalty pursuant to 15-1-206.
              (3)   The amount of tax due under any return may be determined by the department within 5 years after
   the return was filed, regardless of whether the return was filed on or after the last day prescribed for filing. For
   the purposes of this section, a return due under [sections 1 through 9] and filed before the last day prescribed
   by law or rule is considered to be filed on the last day prescribed for filing.
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              NEW SECTION. Section 5.          Procedure to compute tax in absence of statement -- estimation of
   tax -- failure to file -- penalty and interest. (1) If the cannabidiol retailer fails to file any return required by
   [section 3] within the time required, the department may, at any time, audit the cannabidiol retailer or estimate
   the taxes due from any information in its possession and, based on the audit or estimate, assess the
   cannabidiol retailer for the taxes, penalties, and interest due the state.
              (2)   The department shall impose penalty and interest as provided in 15-1-216. The department shall
   mail to the cannabidiol retailer a notice, pursuant to 15-1-211, of the tax, penalty, and interest proposed to be
   assessed. The notice must contain a statement that if payment is not made, a warrant for distraint may be filed.
   The cannabidiol retailer may seek review of the determination pursuant to 15-1-211. The department may
   waive any penalty pursuant to 15-1-206.
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              NEW SECTION. Section 6.          Authority to collect delinquent taxes. (1) (a) The department shall
   collect taxes that are delinquent as determined under [sections 1 through 9].
              (b)   If a tax imposed by [sections 1 through 9] or any portion of the tax is not paid when due, the
   department may issue a warrant for distraint as provided in Title 15, chapter 1, part 7.
              (2)   In addition to any other remedy, in order to collect delinquent taxes after the time for appeal has
   expired, the department may direct the offset of tax refunds or other funds due the cannabidiol retailer from the
   state, except wages subject to the provisions of 25-13-614 and retirement benefits.
              (3)   As provided in 15-1-705, the cannabidiol retailer has the right to a review of the tax liability prior to
   any offset by the department.
              (4)   The department may file a claim for state funds on behalf of the cannabidiol retailer if a claim is
   required before funds are available for offset.
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              NEW SECTION. Section 7.          Refunds -- interest -- limitations. (1) A claim for a refund or credit as a
   result of overpayment of taxes collected under [sections 1 through 9] must be filed within 5 years after the date
   that the return was due, without regard to any extension of time for filing.
              (2)   (a) Interest paid by the department on an overpayment must be paid or credited at the same rate
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   as the rate charged on delinquent taxes under 15-1-216.
              (b)   Except as provided in subsection (2)(c), interest must be paid from the date that the return was
   due or the date of overpayment, whichever is later. Interest does not accrue during any period in which the
   processing of a claim is delayed more than 30 days because the taxpayer has not furnished necessary
   information.
              (c)   The department is not required to pay interest if:
              (i)   the overpayment is refunded or credited within 6 months after the date that a claim was filed; or
              (ii) the amount of overpayment and interest does not exceed $1.
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              NEW SECTION. Section 8.         Information -- confidentiality -- agreements with another state. (1) (a)
   Except as provided in subsections (2) through (5), in accordance with 15-30-2618 and 15-31-511, it is unlawful
   for an employee of the department or any other public official or public employee to disclose or otherwise make
   known information that is disclosed in a return or report required to be filed under [sections 1 through 9] or
   information that concerns the affairs of the person making the return and that is acquired from the person's
   records, officers, or employees in an examination or audit.
              (b)   This section may not be construed to prohibit the department from publishing statistics if they are
   classified in a way that does not disclose the identity of a person making a return or the content of any
   particular report or return. A person violating the provisions of this section is subject to the penalty provided in
   15-30-2618 or 15-31-511 for violating the confidentiality of individual income tax or corporate income tax
   information.
              (2)   (a) This section may not be construed to prohibit the department from providing information
   obtained under [sections 1 through 9] to the department of justice or to law enforcement to be used for the
   purpose of investigation and prevention of noncompliance, tax evasion, fraud, and abuse under [sections 1
   through 9].
              (b)   The department may enter into an agreement with the taxing officials of another state for the
   interpretation and administration of the laws of their state that provide for the collection of a sales tax or use tax
   in order to promote fair and equitable administration of the laws and to eliminate double taxation.
              (c)   In order to implement the provisions of [sections 1 through 9], the department may furnish
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   information on a reciprocal basis to the taxing officials of another state if the information remains confidential
   under statutes within the state receiving the information that are similar to this section.
              (3)   In order to facilitate processing of returns and payment of taxes required by [sections 1 through 9],
   the department may contract with vendors and may disclose data to the vendors. The data disclosed must be
   administered by the vendor in a manner consistent with this section.
              (4)   (a) The officers charged with the custody of the reports and returns may not be required to
   produce them or evidence of anything contained in them in an action or proceeding in a court, except in an
   action or proceeding:
              (i)   to which the department is a party under the provisions of [sections 1 through 9] or any other taxing
   act; or
              (ii) on behalf of a party to any action or proceedings under the provisions of [sections 1 through 9] or
   other taxes when the reports or facts shown by the reports are directly involved in the action or proceedings.
              (b)   The court may require the production of and may admit in evidence only as much of the reports or
   of the facts shown by the reports as are pertinent to the action or proceedings.
              (5)   This section may not be construed to limit the investigative authority of the legislative branch, as
   provided in 5-11-106, 5-12-303, or 5-13-309.
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              NEW SECTION. Section 9.         Department to