CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM Acting Gov. James "Duke" Aiona signed into law yesterday a measure to improve tobacco regulation. State Attorney General Mark Bennett, right, emphasized that the law protected the health of minors by curbing the sale of contraband cigarettes.

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Tobacco sales measure
signed into law

Retailers' required purchase
of a $20 permit is designed
to track sales better

Stores that sell tobacco products are being required to obtain a $20 annual permit under a bill signed into law yesterday.

Acting Gov. James "Duke" Aiona said the law will help the state crack down on illegal and counterfeit sales and sales to minors by giving authorities a better handle on how many businesses sell tobacco products.

Attorney General Mark Bennett agreed.

"It is so difficult to make certain that you're doing everything you ought to when you don't even know everyone who is legally selling cigarettes at a retail level," Bennett said.

Aiona, who signed the bill as acting governor, said the state's best estimate of how many retailers sell tobacco is between 1,700 and 2,500.

Hawaii joins 40 other states with similar permitting laws for tobacco sales, he said.

Officials said better tracking of sales will help the state comply with federal requirements set forth by the landmark 1998 tobacco settlement with states.

Businesses have time to prepare for the new fee.

Starting Dec. 1, 2006, retailers that sell tobacco products will be required to obtain the permit from the Department of Taxation. However, enforcement of the requirement will not begin until March 1, 2007.

Bennett said the state wants to work with businesses to educate them on the new law.

Some small-business groups testified against the measure, Senate Bill 682, as it moved through the Legislature this year, calling the added fee another burden to the state's already high tax system for businesses.

Bennett called the $20 annual fee a small price to pay based on the revenue generated from cigarette sales.

"The people who sell (tobacco) make thousands, tens of thousands, hundreds of thousands of dollars doing it," he said. "A $20 yearly fee ... it is virtually nothing for having the right to sell this at a retail level."

The penalty for knowingly not having a permit would be a petty misdemeanor punishable by up to 30 days in jail, a fine up to $1,000 or both.