Assemblymember Brian Hibbits presented Assembly Bill 471, explaining the measure would create a retail remote license for internet and remote sellers of cigars and pipe tobacco and give the state a mechanism to collect the other-tobacco-products (OTP) excise tax from those sellers.

"The crux of this bill" is to create a licensing path so remote retailers can remit the OTP tax, Assemblymember Brian Hibbits said, describing the difficulty current law poses for online sellers who are not wholesalers inside Nevada.

Outside counsel Beth Oliva, who said she represents the Cigar Association of America and the Premium Cigar Coalition and is a partner with the law firm (transcript: Foxtrot Child), described national work to draft model legislation and the need to align excise statutes with post-Wayfair remote sales rules. "When we first started working on this in 2023 based on 2022 sales, we were estimating... about $750,000 in revenue to the state," Oliva said, adding that the amount may be higher now. She told the committee approximately six of seven premium-cigar company members would meet the constitutional thresholds for remote-seller registration and that roughly 30 companies may ultimately register in Nevada.

Oliva and Hibbits told senators the bill includes four core pieces: conformity with constitutional thresholds (Wayfair), a firm tax obligation and collection authority for the Department of Taxation, a licensing mechanism for remote retail sellers, and a workable tax base that reflects premium-cigar business models. Oliva said the model measure had been enacted in other states including Colorado, Indiana, Maine, Maryland, Michigan, North Carolina, Virginia and Wisconsin.

Committee members pressed for revenue and universe estimates. Senator Steinbeck asked for projected revenue; Oliva replied with the prior analysis estimating about $750,000 in 2022 sales, with the likely present-year figure somewhat higher. Senator Kruskau asked why industry was sponsoring the measure; Oliva said industry wanted to reduce bad actors and create uniform compliance and enforcement standards.

The bill contains licensing and enforcement provisions, including a permanent license revocation for felony convictions related to manufacture or distribution of cigars or pipe tobacco that mirror penalties for wholesalers, and a written requirement for age-verification technology on websites. Assemblymember Hibbits reiterated the bill does not change existing premium cigar excise tax rates or the pilot cap enacted by the Legislature two years ago; rather, he said, the bill seeks to capture remote sellers who are not currently contributing to state excise receipts.

Department of Taxation staff and sponsors told the committee the department can implement the licensing changes but would require programming work. The public hearing record contained no on-the-record opposition; proponents included industry counsel and the premium-cigar trade groups. The committee took the bill into work session and voted to pass AB 471. The motion was made by Senator Donate and seconded by Senator Cruz Crawford; the committee recorded four votes in favor and one nay (Senator Stone).

With the committee's favorable recommendation, AB 471 will move forward for floor consideration.