Opinion ID: 2637676
Heading Depth: 3
Heading Rank: 2

Heading: The Complementary Act applies to interstate delivery sellers as well as to intrastate sellers.

Text: Maybee next argues that the Complementary Act, read in pari materia with the MSAA, is applicable only to intrastate sales of cigarettes in Idaho. In summary, this argument is as follows: (1) the State's sole purpose in enacting the Complementary Act was to prevent an NPM Adjustment in the scheduled payments to the State from the Participating Manufacturers under the MSA; (2) the State has no obligation to regulate the sale of unstamped cigarettes within Idaho under the MSAA (the qualifying statute enacted in accordance with the MSA), and so would not face an NPM Adjustment by allowing interstate sales of Noncompliant Cigarettes; (3) out-of-state delivery sellers have no substantial nexus to the state and therefore cannot be required to collect or remit taxes on goods sold in interstate commerce to Idaho consumers, as such, these sellers do not have to stamp their cigarettes; and (4) the State therefore had no intention of regulating the conduct of interstate sellers selling unstamped cigarettes in Idaho. The logical flaws in this argument are apparent. First, as stated above, the plain language of the Complementary Act demonstrates a legislative intent to regulate the sale of all cigarettes, not only stamped cigarettes, whereas the MSAA regulates only stamped cigarettes (units sold). Second, under Maybee's proposed interpretation, Non-Participating Manufacturers based outside of Idaho could avoid their escrow obligations altogether by simply selling their cigarettes directly to Idaho consumers through the mail, or through an out-of-state retailer who would sell directly to Idaho consumers through the mail, rather than through in-state wholesalers and retailers. Such a result would violate not only the spirit of the MSA, but also Idaho public policy, and would be detrimental to the fiscal soundness of the State. Third, this argument glosses over the fact that, possible NPM Adjustments aside, Non-Participating Manufacturers that do not comply with the MSAA's escrow requirements deprive the State of financial assets, which are needed to defray medical care costs that have arisen as a result of tobacco-related health issues. Statutes are construed under the assumption that the legislature was aware of all other statutes and legal preceden[t] at the time the statute was passed. Druffel v. State, Dep't. of Transp., 136 Idaho 853, 856, 41 P.3d 739, 742 (2002).
The Complementary Act provides that it shall be unlawful for any person [t]o affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the directory. I.C. § 39-8403(3)(a). Idaho Code § 63-2508 provides that: No cigarettes may be purchased, sold, distributed, stored or held on hand or in possession of any person without Idaho stamps having been affixed thereto, within a reasonable time after receipt thereof. No person may import cigarettes, nor hold or have in possession unstamped cigarettes, unless he shall have qualified under this act as a wholesaler and obtained a permit, as provided for in section 63-2503, Idaho Code. (Emphasis added). Idaho Code § 63-2508 was enacted in 1974, and amended in 1986, long before the Complementary Act was enacted in 2003. See S.L.1986, ch. 193, § 5. When the legislature forbade the stamping of Noncompliant Cigarettes in I.C. § 39-8403(a), they did so with the knowledge that I.C. § 63-2508 broadly restricts the legality of possessing unstamped cigarettes within the state.
In 2003, the legislature amended the MAA, seeking to strengthen existing Idaho tobacco statutes, as they pertain to internet and delivery sellers. Under this amendment, Idaho Code § 39-5702(2) defines a [d]elivery sale as: [T]o distribute tobacco products to a consumer in a state where either: (a) the individual submits the order for such sale by means of a telephonic or other method of voice transmission, data transfer via computer networks, including the internet and other online services, or facsimile, or the mails; or (b) the tobacco products are delivered by use of the mails or a delivery service. From the stipulated and uncontested facts of this case, it is clear, as a matter of law, that Maybee is engaged in delivery sales. Idaho Code § 39-5714 addresses [r]equirements for delivery sales, providing in I.C. § 39-5714(2): Each permittee taking a delivery sale order shall comply with ... all other laws of the state of Idaho generally applicable to sales of tobacco products that occur entirely within Idaho including, but not limited to, those laws imposing excise taxes, sales and use taxes, licensing and tax stamping requirements and escrow or other payment obligations.[ [4] ] (Emphasis added). This is an unambiguous requirement that all delivery sellers shall be treated the same as in-state face-to-face sellers under the law. The plain language provides for no other reasonable interpretation.