HB120 Alabama 2014 Session

Summary

Primary Sponsor

Joe Hubbard

Democrat

Session

Regular Session 2014

Title

The Medicaid Paygo Act, Cigarettes, user fee added, distrib., Sec. 40-25-2 am'd.

Summary

HB120 creates the Medicaid Paygo Act by adding a cigarette user fee (50 mills per cigarette) and directing the money to Alabama's Medicaid program.

What This Bill Does

It adds a new cigarette user fee as part of the tobacco tax structure; the revenue from this fee would go into the State General Fund and be allocated to the Medicaid Program. The bill maintains the existing tobacco tax framework and uses a stamp-based system for collection, requiring retailers to collect the fee from buyers. It also restricts new local cigarette taxes and sets an effective date after passage and governor approval.

Who It Affects

• Cigarette purchasers in Alabama will pay an added user fee per cigarette as part of their purchase.
• Retailers, wholesalers, and distributors will collect the fee from buyers and handle the tax using the state's stamp system.

Key Provisions

• Creates the Medicaid Paygo Act and amends Section 40-25-2 to add a cigarette user fee (50 mills per cigarette) to the tobacco tax schedule.
• Revenue from the 50-mill user fee shall be deposited into the State General Fund and allocated to the Medicaid Program.
• Taxes are collected with stamps; retailers must add the tax to the sale price and remit it; noncompliant sellers risk confiscation of tobacco products.
• Local cigarette taxes: increases are exclusive; no new local taxes may be added after May 18, 2004, though existing local taxes may remain.
• Effective date: the act becomes effective on the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Cigarettes