Proposed Text
23VAC10-370-20. Tax levied; rate.
The Virginia cigarette excise tax is imposed at the rate of
one and one-quarter mills on each cigarette and is required to be paid by
every person within the Commonwealth who sells, stores, or receives
cigarettes made of tobacco or any substitute thereof, for the purpose of
distribution within this State state except a retail dealer or
other person who sells, stores, or receives cigarettes with Virginia tax
stamps affixed thereto.
Every person meeting the requirements of a permitted
wholesaler under 23VAC10-370-120 shall be required to remit the tax on
cigarettes for sale, storage or distribution in this state and be required to
comply with all other provisions of this chapter.
23VAC10-370-40. How paid; affixing of stamps; records of
dealers; penalty.
A. Generally. The Virginia cigarette excise tax shall be
paid by the wholesale dealer who has qualified as such under the provisions of 23VAC10-370-120
or retail dealer who purchases unstamped cigarettes. Such payment of Payment
of the tax shall be represented by a stamp, or stamps, or meter
impression (hereinafter stamp) affixed to each package of cigarettes. The
stamp value shall evidence the amount of tax imposed upon the individual
package to which it is affixed.
B. Affixing of stamps. Every wholesale or retail dealer who
receives unstamped cigarettes shall, within one hour after receipt of such
cigarettes, begin affixing the proper stamp to each individual cigarette
container.
1. The stamps shall be affixed to each individual container
in such a manner that the removal will require continued application of water
or steam.
2. The wholesale or retail dealer shall continue stamping
the unstamped containers of cigarettes until all of the products subject to tax
have been stamped.
3. B. Cigarettes destined for sale outside
Virginia and in the inventory of a wholesale dealer engaged in interstate
business, may be set aside and remain unstamped. Such tax exempt
interstate stock shall be kept entirely separate from taxable stock in a manner
to prevent the commingling of the interstate stock with the taxable stock.
C. Records of dealers. Every wholesale and retail dealer
subject to imposition of the tax shall keep a record of purchases of all
cigarettes, and retain all books and records, pertaining to the purchase and
sale of such cigarettes.
Every wholesale dealer shall at the time of shipping or
delivering any cigarettes make and retain a duplicate invoice which shows full
and complete details of the sale or delivery of the taxable cigarettes.
D. Penalty for failure to comply. Any wholesaler or
retailer who refuses or fails to comply with any of the provisions within this
section shall be, upon conviction, guilty of a Class 1 misdemeanor.
23VAC10-370-70. Forms and kinds of containers, methods of
breaking packages, and methods of affixing stamps; penalty for interfering
with enforcement of article.
A. Generally. The Department of Taxation requires each package
of cigarettes to have a stamp or meter impression conspicuously affixed,
showing that the proper Virginia cigarette tax has been paid.
B. Methods of affixing stamps. Each wholesale or retail
dealer stamping agent may affix such stamp or meter impression
by using (1) hand applied stamps, (2) heat stamps attached to the
cellophane wrappers and applied by a fusion stamping machine, or (3)
Virginia tax paid impressions on the cellophane wrappers applied by cigarette
tax stamping meter by hand.
C. Penalty for interfering with enforcement of article. Any
person who is subject to the Virginia cigarette excise tax who refuses to allow
the Department of Taxation's agents to fully inspect his premises, or in any
way interferes with any agent of the Department in the performance of his
duties in enforcing the statutes or regulations relating to the cigarette tax
shall be, upon conviction, guilty of a Class 2 misdemeanor.
23VAC10-370-80. Documents touching purchase, sale, etc., of
cigarettes to be kept for three years, subject to inspection. (Repealed.)
A. Generally. Every person who receives, stores, sells, handles
or transports cigarettes in any manner whatsoever, is required to preserve all
invoices, books, cancelled checks, or other documents relating to the purchase,
sale, exchange, receipt or transportation of all cigarettes for a period of
three years.
B. Examination of records. All invoices, books, cancelled
checks and records dealing with cigarettes shall be subject to audit and
inspection by any duly authorized representative of the Department during the
usual business hours of the day.
C. Penalty for failing to keep records. Any person who
fails or refuses to keep and preserve the records as required, or who fails or
refuses to allow an audit or inspection of the records required, shall be, upon
conviction, guilty of a Class 2 misdemeanor.
23VAC10-370-90. Monthly reports of wholesale dealers Cigarette
tax credit certificates.
A. Generally. Every wholesale dealer qualified as such
under the provisions of 23VAC10-370-120, shall file monthly reports, with the
Department of Taxation, covering the purchase or receipt of all cigarettes
during the preceding month. Such report must be filed between the first and
tenth of each month, for the preceding month.
B. Information required on the monthly report. The report
shall contain detailed information on: (1) tax value of all unstamped
cigarettes on hand first day of month; (2) tax value of all unstamped
cigarettes actually received during month; (3) tax value of unstamped
cigarettes sold during the month; (4) tax value of unstamped cigarettes on hand
last day of month; (5) gross tax value of Virginia tobacco revenue stamps on
hand and unaffixed first day of month; (6) gross tax value of Virginia tobacco
revenue stamps actually received during month; (7) gross tax value of Virginia
tobacco revenue stamps on hand and unaffixed last day of month.
C. Examination of invoices. If the Department of Taxation
examines the invoices of any wholesale dealer and the dealer is unable to
furnish evidence that sufficient tobacco revenue stamps were purchased to cover
unstamped cigarette purchases, the prima facie presumption shall be that such
cigarettes were sold without proper stamps. Such presumption shall be that the
sales were made in violation of 23VAC10-370-40.
D. Penalty for failure to file. Any qualified wholesale
dealer who fails or refuses to timely file monthly reports as required herein
shall be, upon conviction, guilty of a Class 3 misdemeanor.
E. Credit for erroneously applied stamps and Virginia
stamped unsalable cigarettes returned to the manufacturer. Any qualified wholesale
dealer stamping agent who erroneously applies Virginia revenue
stamps to cigarettes or applies Virginia stamps to unsalable cigarettes which
that are returned to the manufacturer, may apply to the
Department of Taxation for a cigarette tax credit certificate.
1. Application for a cigarette tax credit certificate should be
accompanied by substantiating evidence showing the circumstances surrounding
the erroneously applied stamps, the quantity of stamps erroneously applied, and
resolution of the situation. Application for credit certificate for unsalable
cigarettes which that are returned to the manufacturer should be
accompanied by a manufacturer's affidavit or manufacturer's statement that such
quantity and package size of cigarettes were actually returned.
2. If the wholesaler has reasonably satisfied the Department of
Taxation that the credit is due, the Department department shall
issue a tobacco tax credit certificate.
3. The tobacco tax credit certificate may be utilized for subsequent tax stamp purchases.
4. If cigarettes are destroyed by fire or other disaster prior
to stamping, application for a credit against accountability may be made with
the Department department. If cigarettes are destroyed by fire or
other disaster after cigarette stamps are applied, application for a tobacco
tax credit certificate or tax refund may be made with the Department department.
The application should be made as set out in subdivision 1 of this subsection
section.
23VAC10-370-100. Preparation, design and sale of stamps; unlawful sale of stamps a felony.
A. Generally. Virginia revenue stamps (cigarette tax
stamps) will be prepared and offered for sale by the Department of Taxation and
may be purchased only from the Department of Taxation. It shall be unlawful
for any person, other than the Department of Taxation, to sell
tobacco revenue stamps not affixed to cigarettes sold.
1. Virginia revenue State cigarette tax stamps
may be purchased only from the Department of Taxation, Richmond,
Virginia, or from certain district offices of the department or certain
commissioners of the revenue, which may change from time to time authorized
city or county officers. Specific information on current locations will be
provided by the Department of Taxation upon request.
2. Any purchase of Virginia revenue stamps must be made with cash, money order, cashier's check, or certified check unless bonding arrangements have been previously made with the Department of Taxation.
3. The wholesale dealer will be required to bear the burden for any postage and shipping charges for any Virginia revenue stamps shipped or mailed.
B. Penalty on unlawful sale of stamps. Any person
unlawfully selling Virginia revenue stamps, whether the stamps are genuine or
counterfeit, shall be, upon conviction, guilty of a Class 6 felony.
C. Discount on sale of stamps to qualified wholesalers.
Qualified wholesalers, as regulated in 23VAC10-370-120, who purchase Virginia
revenue stamps for use on taxable cigarettes sold and delivered by them shall
be entitled to a discount.
1. For purposes of discount, carton shall mean (a) ten packs
of cigarettes, each containing twenty cigarettes or, (b) nine packs of
cigarettes, each containing twenty-five cigarettes.
2. The discount on sale of stamps to qualified wholesalers
shall be two and one-half ($0.025) cents per carton of 10 packs of cigarettes,
each containing twenty cigarettes and two and one-quarter ($0.0225) cents per
carton of nine packs of cigarettes, each containing 25 cigarettes.
23VAC10-370-110. Sale of unstamped cigarettes by wholesale
dealers; penalty stamping agents.
A. Generally. A wholesale dealer, who is qualified under
23VAC10-370-120, stamping agent may sell cigarettes in interstate
commerce without affixing Virginia revenue stamps if such cigarettes are sold
and shipped or delivered to persons outside this state. However, cigarettes
without Virginia revenue stamps affixed, may be sold in interstate
commerce only if: (1) (i) such cigarettes are sold to persons
engaged in business as dealers in cigarettes in other states; (2),
(ii) such cigarettes are purchased from the wholesale dealer stamping
agent exclusively for resale in other states;, and (3)
(iii) such cigarettes are at the time of sale properly stamped with
revenue stamps of other states.
B. Other sales of unstamped cigarettes by wholesale dealers
stamping agents. A duly qualified wholesale dealer stamping
agent may also sell cigarettes without Virginia revenue stamps affixed
thereto when: (1) (i) such cigarettes are sold to the United
States or any of its instrumentalities for resale to or use or consumption by
members of the armed services or to the Veterans Canteen Service of the
Veterans Administration for resale to veterans of the United States armed
services who are hospitalized or domiciled in hospitals or homes of the
Veterans Administration or; (2) (ii) such cigarettes are sold and
delivered to ships for consumption thereon, regularly engaged in foreign
commerce or interstate coastwise shipping for consumption on the ships.
C. Records needed for cigarettes sold and shipped or delivered
in interstate commerce to a person outside Virginia. A qualified wholesale
dealer, stamping agent who sells unstamped cigarettes which that
are delivered in interstate commerce, must keep: (1) (i)
adequate records which that record the sale; (2), (ii)
a copy of the invoice for such purchase or other substantiating evidence,
and (3) (iii) the receipt from the common carrier, contract
carrier, or post office showing shipment for delivery in another state.
If delivered by the wholesale dealer stamping agent to the
purchaser at a point outside of Virginia, the wholesaler stamping
agent must maintain in addition to other records required herein by
this chapter, a receipt which that shows such delivery. D.
Records needed for sales of cigarettes properly stamped with revenue stamps of
another state. A qualified wholesale dealer, stamping agent
who sells cigarettes stamped with revenue stamps of another state must keep
records of each sale, the original purchase order, a copy of the invoice for
such purchase, and a receipt from the purchaser showing that the purchase was
made exclusively for resale in another state. In addition, records must be
maintained which that show the purchase and use of the other
state's revenue stamps that the wholesale dealer used.
1. Exception. The wholesale dealer stamping
agent who stamps cigarettes with out-of-state revenue stamps and has a
place of business located partly within a city in Virginia and partly without
Virginia, or in a county which adjoins such city, shall not be required to
obtain a receipt from a purchaser from the other state if the cigarette tax in
the other state is higher than the tax imposed in Virginia.
E. Cigarettes sold to the United States or instrumentality of
the United States for resale to or use or consumption. Qualified wholesale
dealers Stamping agents may sell unstamped cigarettes to the United
States or to any U.S. instrumentalities for resale to or for the use or
consumption by members of the armed services of the United States. The qualified
wholesale dealer stamping agent may also sell unstamped cigarettes
to the Veterans Canteen Service of the Veterans Administration for resale to
veterans of the armed services of the United States who are hospitalized or
domiciled in hospitals or homes of the Veterans Administration.
Qualified wholesale dealers Stamping agents must
keep books and records regarding such sales to the United States, U.S.
instrumentalities, or Veterans Canteen Service and maintain files of the
original purchase orders or copies of invoices showing such sales.
Example 1: Qualified wholesale dealer Stamping agent
A sells cigarettes to commissaries or officers' clubs operated by the U.S. Army
as instrumentalities of the United States. Unstamped cigarettes may be sold to
the commissaries or officers' clubs operated as instrumentalities of the United
States.
Example 2: Qualified wholesale dealer Stamping agent
B sells cigarettes to federal reformatories for resale. The cigarettes must be
stamped by the wholesaler stamping agent prior to sale.
Cigarettes may be sold to the United States or its instrumentalities without
tax stamps affixed only if such cigarettes are sold for use or consumption to
members of the armed forces or veterans of the armed forces hospitalized or
domiciled in hospitals or homes of the Veterans Administration.
Example 3: Qualified wholesale dealer Stamping agent
C sells cigarettes to the Post Enlisted Men's Club, which is not
organized or operated as an instrumentality of the United States. The
cigarettes must be stamped by the wholesaler stamping agent prior
to sale since the Enlisted Men's Club is not considered an instrumentality of
the United States, and such sale of cigarettes is not considered a sale
made to the United States.
F. Cigarettes sold and delivered to ships, for consumption
thereon, regularly engaged in foreign commerce or interstate coastwise
shipping for consumption on the ships. A qualified wholesale dealer
stamping agent may sell unstamped cigarettes for delivery to ships
regularly engaged in foreign commerce or coastwise shipping between points in
Virginia and points outside Virginia. The unstamped cigarettes must be
delivered by the wholesale dealer stamping agent to the ship. The
unstamped cigarettes must be for resale, use, or consumption upon such
ship or in foreign commerce.
G. Conditions surrounding sale of unstamped cigarettes
subjecting wholesale dealer stamping agent to tax. If any
wholesale dealer fails to comply with any of the these provisions
of 23VAC10-370-110, with respect to any sale of unstamped cigarettes,
such wholesale dealer stamping agent shall pay the tax imposed
upon such cigarettes.
H. Penalty for violation of sale of unstamped cigarettes.
Any person who violates any of the provisions on the sale of unstamped
cigarettes shall be, upon conviction, guilty of a Class 2 misdemeanor.
23VAC10-370-120. Qualification for dealer's permit. (Repealed.)
A. Generally. Any wholesaler, who desires to qualify and
receive a permit to purchase and affix Virginia tobacco revenue stamps to cigarettes,
must make application to the Department of Taxation. Such application must be
made on the forms provided by the Department.
B. Issuance of stamping permit. After reviewing the
wholesaler's application, the Department shall issue to the wholesaler it finds
to be qualified, a permit which qualifies him to purchase and affix Virginia
tobacco revenue stamps to cigarettes.
C. Privileges of qualified wholesale dealer. Any duly
qualified wholesale dealer, who has received his permit to purchase and affix
Virginia tobacco revenue stamps, shall be allowed a discount on purchases of
the Virginia tobacco revenue stamps for his individual use as regulated in
23VAC10-370-100 C.
The Department of Taxation shall not sell stamps subject to
discount to any wholesaler until he has received from the Department a permit
to purchase and affix Virginia revenue stamps.
D. Revocation of stamping permit. The Department may revoke
the wholesaler's permit if the wholesaler is found guilty of violating any
provisions of the cigarette tax statutes or any adopted and promulgated rules
of the Department pertaining to the cigarette tax.
Example 1: Wholesaler A has a place of business in Virginia
and purchases unstamped cigarettes directly from the manufacturer. For purposes
of the Virginia cigarette tax the wholesaler qualifies for a permit to buy at
discount and stamp cigarettes with Virginia revenue stamps.
Example 2: Wholesaler B is an out of state business with no
business locations in Virginia. Wholesaler B sells cigarettes to Virginia
retailers. Wholesaler B qualifies for a permit to buy at discount and stamp the
cigarettes subject to the Virginia cigarette excise tax.
Example 3: Chain store C distribution center with locations
within and without Virginia, purchases cigarettes directly from manufacturers.
Each distribution center within Virginia and without Virginia may qualify for a
permit to buy at discount and stamp cigarettes subject to the Virginia
cigarette excise tax.
Example 4: Wholesaler D, a qualified wholesale dealer for
Virginia revenue stamp purposes, receives a request from Retailer E to stamp
cigarettes owned by the retailer. The sale of Virginia revenue stamps by anyone
other than the Department of Taxation is prohibited.
Example 5: Wholesaler F and Wholesaler G are engaged in a
joint stamping operation. Each wholesaler must have been issued the permit
required for stamping and each wholesaler must separately maintain all of his
own records. Each wholesaler must separately purchase Virginia revenue stamps.
If metering devices are used, each must have a separate meter with separately
assigned meter number and each must stamp his own cigarettes.
23VAC10-370-180. Sale, purchase, possession, etc., of
cigarettes for purposes of evading tax; penalty. (Repealed.)
A. Generally. Except as otherwise provided by law, it is
unlawful for any person to sell, purchase, transport, receive or possess
unstamped cigarettes.
1. Certain persons, as regulated in 23VAC10-370-110, may
sell unstamped cigarettes; however, no person shall lawfully sell cigarettes
without stamps for purposes of evading cigarette tax.
2. Any person who is not a regularly licensed dealer, as
regulated in 23VAC10-370-120, having more than thirty packages of unstamped
cigarettes in his possession in this State, is presumed to be evading the
cigarette tax due on such cigarettes.
B. Penalty. Any person selling unstamped cigarettes for the
purpose of evading the cigarette tax shall be, upon conviction, guilty of a
Class 3 misdemeanor.