Chapter
246
2007 -- S 0145 SUBSTITUTE B
Enacted 07/03/07
A N A C T
RELATING
TO CRIMINAL OFFENSES - TAXATION AND TOBACCO - DELIVERY AND SALE OF TOBACCO
PRODUCTS
Introduced
By: Senators Doyle, Tassoni, and McBurney
Date
Introduced: January 24, 2007
It is enacted by the General Assembly as
follows:
SECTION 1 Sections
44-20-9, 44-20-10, 44-20-11, 44-20-27 and 44-20-29 of the
General Laws in Chapter 44-20 entitled
"Cigarette Tax" are hereby repealed.
44-20-9.
Solicitor's permit. -- No person shall offer for sale, or
solicit any order in this
state for the sale of any cigarettes for his or
her own account, or for the account of any person or
firm, unless that person has first obtained from
the administrator a solicitor's permit, the fee for
which is twenty-five dollars ($25.00), which is
to be paid to the administrator. Each permit
expires at midnight on May 31 next succeeding
the date of issuance. The permit shall state the
name and address of the vendor whom the solicitor
represents, and the solicitor shall not represent
any vendor whose name does not appear upon the
permit.
44-20-10.
Reports by solicitors -- Exemption of licensed distributors and dealers. --
The permittee shall furnish the administrator, on
proper forms approved by the administrator,
copies of all orders solicited by the permittee
in this state, the copies to show the quantity and
kind of goods ordered, by whom ordered, from
what person, firm, or corporation ordered, the
correct address of the purchaser, and any other
information which may be required by the
administrator. Failure to comply with the
provisions of this section subjects the solicitor to
forfeiture of his or her permit. Provided, that
sections 44-20-9 -- 44-20-11 does not apply to any
solicitor who is a licensed dealer or
distributor, or who sells or solicits orders only for a licensed
dealer or distributor.
44-20-11.
Penalty for violations by solicitors. -- Any person who violates
any provision
of sections 44-20-9 and 44-20-10 is subject to a
fine of not more than one hundred dollars ($100)
for each offense.
44-20-27.
Nonresident as licensed distributor. -- Any person complying
with the
provisions of sections 44-20-23 -- 44-20-26
becomes a licensed distributor, within the meaning of
this chapter, and is subject to all provisions
of this chapter applicable to licensed distributors,
except as otherwise determined by the
administrator.
44-20-29.
Stamping by dealers. -- Each dealer shall, within twenty-four
(24) hours after
coming into possession of any cigarettes not
bearing proper stamps evidencing payment of the tax
imposed by this chapter and before selling the
cigarettes, affix or cause to be affixed, at the
location for which his or her license is issued
except as provided in this chapter, in the manner the
administrator may specify in regulations issued
pursuant to this chapter, to each package of
cigarettes, stamps of the proper denominations.
SECTION 2. Chapter
44-20 of the General Laws entitled "Cigarette Tax" is hereby
amended by adding thereto the following
sections:
44-20-4.1.
License availability. -- No license under this chapter may be
granted,
maintained or renewed if the applicant, or any
combination of persons owning directly or
indirectly, in the aggregate, more than ten
percent (10%) of the ownership interests in the
applicant:
(a) Owes five
hundred dollars ($500) or more in delinquent cigarette taxes;
(b) Had a
license under this chapter revoked by the administrator within the past two (2)
years;
(c) Has been
convicted of a crime relating to cigarettes stolen or counterfeit cigarettes;
(d) Is a
cigarette manufacturer or importer that is neither: (i) a participating
manufacturer
as defined in subsection II (jj) of the “Master
Settlement Agreement” as defined in section 23-71-
2; nor (ii) in full compliance with chapter 20.2
of this title and section 23-71-3;
(e) Has
imported, or caused to be imported, into the United States any cigarette in
violation of 19 U.S.C. 1681 a; or
(f) Has
imported, or caused to be imported into the United States, or manufactured for
sale or distribution in the United States any
cigarette that does not fully comply with the Federal
Cigarette Labeling and Advertising Act (15
U.S.C. 1331, et. seq).
44-20-8.1.
Maintenance and publication of list of licenses. -- By July 1, 2008
the
administrator shall create and maintain a
website setting forth the identity of all licensed persons
under this chapter, itemized by type of license
possessed, and shall update the site no less
frequently than six (6) times per year.
44-20-8.2.
Transactions only with licensed manufacturers, importers, distributors,
and dealers. -- A manufacturer or
importer may sell or distribute cigarettes to a person located or
doing business within this state, only if such
person is a licensed importer or distributor. An
importer may obtain cigarettes only from a
licensed manufacturer. A distributor may sell or
distribute cigarettes to a person located or
doing business within this state, only if such person is a
licensed distributor or dealer. A distributor
may obtain cigarettes only from a licensed
manufacturer, importer, or distributor. A dealer
may obtain cigarettes only from a licensed
distributor.
44-20-33.1.
Transportation of unstamped cigarettes. -- (a) Any person who ships
unstamped cigarette packages in or into this state
other than to a licensed manufacturer, importer
or distributor shall first file with the
administrator notice of such shipment. This paragraph shall
not apply to any common or contract carrier that
is transporting cigarettes through this state to
another location under a proper bill of lading
or freight bill, which states the quantity, source, and
destination of such cigarettes.
(b) Any person
transporting unstamped cigarette packages into or within this state shall
carry, in the vehicle used to convey the
shipment, invoices or equivalent documentation of the
shipment for all cigarettes in the shipment. The
invoices or documentation shall show the true
name and address of the consignor or seller, the
true name and address of the consignee or
purchaser, and the quantity by brand of the
cigarettes so transported.
44-20-40.1.
Inspections. -- (a) The administrator or his or her duly authorized
agent shall
have authority to enter and inspect, without a
warrant during normal business hours, and with a
warrant during nonbusiness hours, the facilities
and records of any manufacturer, importer,
distributor or dealer.
(b) In any case
where the administrator or his or her duly authorized agent, or any police
officer of this state, has knowledge or
reasonable grounds to believe that any vehicle is
transporting cigarettes in violation of this
chapter, the administrator, such agent, or such police
officer, is authorized to stop such vehicle and
to inspect the same for contraband cigarettes.
44-20-51.1.
Civil penalties. -- (a) Whoever omits, neglects, or refuses to
comply with
any duty imposed upon him/her by this chapter,
or to do, or cause to be done, any of the things
required by this chapter, or does anything
prohibited by this chapter, shall, in addition to any
other penalty provided in this chapter, be
liable to a penalty of one thousand dollars ($1,000), or
five (5) times the retail value of the
cigarettes involved, whichever is greater, to be recovered,
with costs of suit, in a civil action.
(b) Whoever
fails to pay any tax imposed by this chapter at the time prescribed by law or
regulations, shall, in addition to any other
penalty provided in this chapter, be liable to a penalty
of five (5) times the tax due but unpaid.
44-20-51.2.
Criminal penalty for fraudulent offenses. -- Whoever, with intent to
defraud the state frails to comply with any
requirement of this chapter or regulations prescribed
thereunder shall in addition to any other
penalty provided in this chapter, for each such offense,
be fined ten thousand dollars ($10,000), or
imposed not more than five (5) years, or both.
44-20-51.3.
Counterfeit cigarettes. -- Notwithstanding any other provision of
law, the
sale or possession for sale of counterfeit
cigarettes by a manufacturer, importer, distributor, or
dealer shall result in the seizure of the
product and related machinery by the administrator or any
law enforcement agency and shall be punishable as
follows:
(a) A knowing
violation involving a total quantity of less than two (2) cartons of
cigarettes shall be punishable by a fine of one
thousand dollars ($1,000) or five (5) times the retail
value of the cigarettes involved, whichever is
greater, or imprisonment not to exceed five (5)
years, or both.
(b) A
subsequent knowing violation involving a total quantity of less than two (2)
cartons
of cigarettes shall be punishable by a fine of
five thousand dollars ($5,000) or five (5) times the
retail value of the cigarettes involved,
whichever is greater, or imprisonment not to exceed five
(5) years, or both, and shall also result in the
revocation by the administrator of the manufacturer,
importer, distributor, or dealer license.
(c) A first
knowing violation involving a total quantity of two (2) cartons of cigarettes
or
more shall be punishable by a fine of two
thousand dollars ($2,000) or five (5) times the retail
value of the cigarettes involved, whichever is
greater, or imprisonment not to exceed five (5)
years, or both.
(d) A
subsequent knowing violation involving a quantity of two (2) cartons of
cigarettes
or more shall be punishable by a fine of fifty
thousand dollars ($50,000) or five (5) times the
retail value of the cigarettes involved,
whichever is greater, or imprisonment not to exceed five
(5) years, or both, and shall also result in the
revocation by the administrator of the manufacturer,
importer, distributor, or dealer license.
For purposes of
this section, counterfeit cigarettes includes cigarettes that have false
manufacturing labels or packages of cigarettes
bearing counterfeit tax stamps. Any counterfeit
cigarettes seized by the administrator shall be
destroyed.
SECTION 3.
Sections 44-20-1, 44-20-2, 44-20-4, 44-20-5, 44-20-8, 44-20-12, 44-20-
12.2, 44-20-13, 44-20-14, 44-20-15, 44-20-17,
44-20-18, 44-20-19, 44-20-20, 44-20-21, 44-20-
23, 44-20-24, 44-20-26, 44-20-28, 44-20-30,
44-20-32, 44-20-33, 44-20-35, 44-20-36, 44-20-37,
44-20-38, 44-20-39, 44-20-40, 44-20-43, 44-20-45
and 44-20-51 of the General Laws in Chapter
44-20 entitled "Cigarette Tax" are
hereby amended to read as follows:
44-20-1.
Definitions. -- Whenever used in this chapter, unless the context
requires
otherwise:
(1)
"Administrator" means the tax administrator;
(2)
"Cigarettes" means and includes any cigarettes suitable for smoking
in cigarette
form, and each sheet of cigarette rolling paper;
(3)
"Dealer" means any person whether located within or outside of
this state, who sells
or distributes cigarettes to a consumer in this
state; other
than a distributor who is engaged in this
state in the business of selling cigarettes;
(4) (i)
"Distributor" means any person:
(A) whether
located within or outside of this state, other than a dealer, who sells or
distributes cigarettes within or into this
state. Such term shall not include any cigarette
manufacturer, export warehouse proprietor, or
importer with a valid permit under 26 U.S.C.
section 5712, if such person sells or
distributes cigarettes in this state only to licensed distributors,
or to an export warehouse proprietor or another
manufacturer with a valid permit under 26 U.S.C.
section 5712;
(A) Engaged in
this state in the business of manufacturing cigarettes or any person
engaged in the business of selling cigarettes to
dealers, or to other persons, for the purpose of
resale only; provided, that seventy-five percent
(75%) of all cigarettes sold by that person in this
state are sold to dealers or other persons for
resale;
(B) Selling
cigarettes directly to consumers at retail, and maintaining one or more
regular places of business in this state for
that purpose; provided, that seventy-five percent (75%)
of the sold cigarettes are purchased directly
from the manufacturer; or
(B) Selling
cigarettes directly to consumers in this state by means of at least twenty-five
(25) cigarette vending machines.
(C) Selling
cigarettes directly to consumers in this state by means of at least twenty-five
(25) cigarette vending machines;
(ii) Provided,
that any person who owns or maintains five (5) or more retail outlets in
Rhode Island, having one hundred percent (100%)
common ownership, through which cigarettes
are sold at retail may apply for a distributor's
license, and upon issuance of the license, that
person is deemed to be a distributor under this
chapter;
(5)
"Licensed dealer" means a dealer licensed under the provisions of
this chapter;
(6)
"Licensed distributor" means a distributor licensed under the
provisions of this
chapter;
(5)
"Importer" means any person who imports into the United States,
either directly or
indirectly, a finished cigarette for sale or
distribution;
(6)
"Licensed", when used with reference to a manufacturer, importer,
distributor or
dealer, means only those persons who hold a
valid and current license issued under section 44-20-
2 for the type of business being engaged in.
When the term "licensed" is used before a list of
entities, such as "licensed manufacturer,
importer, wholesale dealer, or retailer dealer," such term
shall be deemed to apply to each entity in such
list;
(7)
"Manufacturer" means any person who manufacturers, fabricates, assembles,
processes, or labels a finished cigarette;
(7)(8)
"Person" means any individual, firm, fiduciary, partnership,
corporation, trust, or
association, however formed;
(8)(9)
"Place of business" means and includes any place where cigarettes are
sold or
where cigarettes are stored or kept for the
purpose of sale or consumption, including any vessel,
vehicle, airplane, train, or vending machine;
(9)(10)
"Sale" or "sell" includes and applies to gifts, exchanges,
and barter;
(10)(11)
"Snuff" means any finely cut, ground, or powdered tobacco that is not
intended
to be smoked;
(11)(12)
"Stamp" means the impression, device, stamp, label, or print
manufactured,
printed, or made as prescribed by the
administrator to be affixed to packages of cigarettes, as
evidence of the payment of the tax provided by
this chapter or to indicate that the cigarettes are
intended for a sale or distribution in this
state that is exempt from state tax under the provisions of
subsection 44-20-12.3(a); and also includes
impressions made by metering machines authorized
to be used under the provisions of this chapter.
44-20-2. Distributors'
and dealers' licenses required. -- Importer, distributor, and
dealer licenses required. -- Licenses
required. -- Each person engaging in the business of
selling cigarette products in this state,
including any distributor or dealer, shall secure a license
from the administrator before engaging in that
business, or continuing to engage in it. A separate
application and license is required for each
place of business operated by a distributor or dealer;
provided, that an operator of vending machines
for cigarette products is not required to obtain a
distributor's license for each machine. If
the applicant for a license does not have a place of
business in this state, the license shall be
issued for such applicant’s principal place of business,
wherever located. A licensee shall notify the
administrator within thirty (30) days in the event that
it changes its principal place of business. A separate license is
required for each class of business
if the applicant is engaged in business both
as distributor and dealer. in more than one of the
activities required to be licensed by this
section.
No person shall maintain or operate or cause to
be operated a vending machine for cigarette
products without procuring a dealer's license for each
machine.
44-20-4.
Application for license -- Display. -- All licenses are issued by the
administrator upon approval of application,
stating, on forms prescribed by the administrator, the
information he or she may require for the proper
administration of this chapter. Each application
for a distributor's license shall be accompanied
by (1) a fee of one thousand dollars ($1,000) with
respect to those distributors who affix state
cigarette tax stamps to at least seventy-five percent
(75%) of all cigarettes sold by those
distributors ("Class A Distributor"), or (2) a fee of one
hundred dollars ($100) with respect to all other
distributors ("Class B Distributor"); each
application for a dealer's license shall be
accompanied by a fee of twenty-five dollars ($25.00).
Each issued license shall be prominently
displayed on the premises covered by the license. In the
instance of an application for a Class A
distributor's license, the administrator shall require, in
addition to other information as may be deemed
necessary, the filing of affidavits from three (3)
cigarette manufacturers with national
distribution stating that the manufacturer will supply the
distributor if the applicant is granted a
license. Except as provided in this chapter, only Class A
Distributors shall affix cigarette tax stamps. Each application for
an importer’s, or distributor’s
license shall be accompanied by a fee of one
thousand dollars ($1,000); provided, that for a
distributor who does not affix stamps, the fee
shall be one hundred dollars ($100); each
application for a dealer’s license shall be
accompanied by a fee of twenty-five dollars ($25.00).
Each issued license shall be prominently
displayed on the premises within this state, if any,
covered by the license. In the instance of an
application for a distributor’s license, the
administrator shall require, in addition to
other information as may be deemed necessary, the
filing of affidavits from three (3) cigarette
manufacturers with national distribution stating that
the manufacturer will supply the distributor if
the applicant is granted a license.
44-20-5. Duration
of dealers' licenses -- Renewal. Duration of importer's and
dealer's licenses -- Renewal. -- (a) Any importer
license and any license issued by the tax
administrator authorizing a dealer to sell cigarettes
in this state shall expire at midnight on June
30 next succeeding the date of issuance unless
(1) suspended or revoked by the tax administrator,
(2) the business with respect to which the
license was issued changes ownership, or (3) the
importer or dealer ceases to transact the business
for which the license was issued, or (4) after a
period of time set by the administrator;
provided such period of time shall not be longer than three
(3) years, in any of which cases the license shall
expire and terminate and the holder shall
immediately return the license to the tax
administrator.
(b) Every holder
of a dealer's license shall annually, on or before February 1 of each
year, renew its license by filing an application
for renewal along with a twenty-five dollar
($25.00) renewal fee. The renewal license is
valid for the period July 1 of that calendar year
through June 30 of the subsequent calendar year.
44-20-8.
Suspension or revocation of license. -- The administrator may suspend
or
revoke any license under this chapter for
failure of the licensee to comply with any provision of
this chapter or with any provision of any other
law or ordinance relative to the sale of cigarettes;
and the administrator may also suspend or revoke
any license for failure of the licensee to comply
with any provision of chapter 13 of title 6,
and, for the purpose of determining whether the
licensee is complying with any provision of
chapter 13 of title 6, the administrator and his or her
authorized agents are empowered, in addition to
authority conferred by section 44-20-40, to
examine the books, papers, and records of any
licensee. The administrator shall revoke the license
of any person who would be ineligible to obtain
a new or renew a license by reason of any of the
conditions for licensure provided in section
44-20-4.1.
Any person aggrieved by the suspension
or revocation may apply to the administrator for
a hearing as provided in section 44-20-47, and
may further appeal to the district court as
provided in section 44-20-48.
44-20-12.
Tax imposed on cigarettes sold. -- A tax is imposed on all cigarettes
sold or
held for sale in the state. by any
person, the The payment of the tax to be evidenced by stamps
affixed , which may be affixed only by licensed
distributors to the packages containing the such
cigarettes. and as required by the tax
administrator. Any cigarettes on which the proper amount of
tax provided for in this chapter has been paid,
payment being evidenced by the stamp, is not
subject to a further tax under this chapter. The
tax is at the rate of one hundred twenty-three (123)
mills for each cigarette.
44-20-12.2.
Prohibited acts -- Penalty. -- (a) No person or other legal entity
shall sell or
distribute in the state, acquire, hold, own,
possess, or transport for sale or distribution in this state,
or import or cause to be imported into the state
for sale or distribution in this state nor shall tax
stamps be affixed to any cigarette package:
(1) That bears
any label or notice prescribed by the United States Department of
Treasury to identify cigarettes exempt from tax
by the United States pursuant to section 5704 of
title 26 of the United States Code, 26 U.S.C.
section 5704(b)(concerning cigarettes intended for
shipment to a foreign country, Puerto Rico, the
Virgin Islands, or a possession of the United
States), or for consumption beyond the
jurisdiction of the internal revenue laws of the United
States, including any notice or label described
in section 44.185 of title 27 of the Code of Federal
Regulations, 27 CFR section 44.185;
(2) That is not
labeled in conformity with the provisions of the Federal Cigarette
Labeling and Advertising Act, 15 U.S.C. section
1331 et seq., or any other federal requirement
for the placement of labels, warnings and other
information, applicable to cigarette packages
intended for domestic consumption;
(3) The packaging
of which has been modified or altered by a person other than the
original manufacturer of the cigarettes,
including by the placement of a sticker to cover
information on the package. For purposes of this
subsection, a cigarette package shall not be
construed to have been modified or altered by a
person other than the manufacturer if the most
recent modification to, or alteration of, the
package was by the manufacturer or by a person
authorized by the manufacturer;
(4) Imported into
the United States in violation of 26 U.S.C. section 5754 or any other
federal law, or implementing federal
regulations;
(5) That the
person otherwise knows or has reason to know the manufacturer did not
intend to be sold, distributed, or used in the
United States; or
(6) That has not
been submitted to the secretary of the U.S. Department of Health and
Human Services the list or lists of the
ingredients added to tobacco in the manufacture of those
cigarettes required by the Federal Cigarette
Labeling and Advertising Act, 15 U.S.C. section
1335a.
(b) The tax
administrator is authorized to obtain and exchange information with the
United States Customs Service for the purpose of
enforcing this section.
(c) Any person
who affixes or distributes a tax stamp in violation of this section shall be
fined not more than five hundred dollars ($500)
for the first offense, and for each subsequent
offense shall be fined not more than one
thousand dollars ($1,000), or be imprisoned not more
than one year, or be both fined and imprisoned.
(d) Any cigarettes
found in violation of this section shall be declared to be contraband
goods and may be seized by the tax administrator
or his or her agents, or by any sheriff or his or
her deputy or any police officer, without a
warrant. The tax administrator shall may promulgate
rules and regulations for the destruction of
contraband goods pursuant to this section., including
the administrator's right to allow the true
holder of the trademark rights in a cigarette brand to
inspect contraband cigarettes prior to their
destruction.
(e) The
prohibitions of this section do not apply to:
(1) Tobacco
products that are allowed to be imported or brought into the United States
free of tax and duty under subsection IV of
chapter 98 of the harmonized tariff schedule of the
United States (see 19 U.S.C. section 1202); or
(2) Tobacco
products in excess of the amounts described in subdivision (1) of this
subsection if the excess amounts are voluntarily
abandoned to the tax administrator at the time of
entry, but only if the tobacco products were
imported or brought into the United States for
personal use and not with intent to defraud the
United States or any state.
(f) If any part
or provision of this section or the application of any part to any person or
circumstance is held invalid, the remainder of
the section, including the application of that part or
provision to other persons or circumstances,
shall not be affected by that invalidity and shall
continue in full force and effect. To this end,
the provisions of this section are severable.
44-20-13.
Tax imposed on unstamped cigarettes. -- A tax is imposed at the rate of
one
hundred twenty-three (123) mills for each
cigarette upon the storage or use within this state of
any cigarettes not stamped in accordance with
the provisions of this chapter in the possession of
any consumer person other than a
licensed distributor or dealer, or a carrier for transit from
outside of this state to a licensed distributor
or dealer
within this state.
44-20-14.
Return and payment of use tax. -- Any person consumer
having in his or her
possession any cigarettes with respect to the
storage or use of which a tax is imposed in section
44-20-13 shall, within twenty-four (24) hours after
coming into possession of the cigarettes in this
state, file a return with the tax administrator
in a form prescribed by the administrator. The return
shall be accompanied by a payment of the amount
of the tax shown on the form to be due.
44-20-15. Confiscation
of contraband cigarettes. --Confiscation of contraband
cigarettes and other property. - - (a) All cigarettes which
are held for sale or distribution within
the borders of this state in violation of the
requirements of this chapter with respect to the storage
or use of which the tax imposed in section
44-20-13 is not paid, as provided in this chapter, are
declared to be contraband goods and may be
seized by the tax administrator or his or her agents,
or employees, or by any sheriff or his or her
deputy or any police officer when directed by the tax
administrator to do so, without a warrant.
;provided, that nothing in this chapter shall be
construed to require the tax administrator to
confiscate unstamped cigarettes when the
administrator has reason to believe that the
owner of the cigarettes is not willfully or intentionally
evading the tax imposed by section 44-20-13. All cigarettes
seized by the state under this chapter
shall be destroyed.
(b) All
fixtures, equipment, and all other materials and personal property on the
premises
of any distributor or dealer who, with the
intent to defraud the state, fails to keep or make any
record, return, report, or inventory; keeps or
makes any false or fraudulent record, return, report,
or inventory required by this chapter; refuses
to pay any tax imposed by this chapter; or attempts
in any manner to evade or defeat the
requirements of this chapter shall be forfeited to the state.
44-20-17.
Penalty for use tax violations. -- Any person who violates the
provisions of
sections 44-20-13 -- 44-20-16 44-20-14
is guilty of a misdemeanor and shall for each offense be
fined not less than one hundred fifty dollars
($150) and not more than five hundred dollars ($500)
or be imprisoned not more than one year or be
both fined and imprisoned.
44-20-18.
Securing stamps. -- The tax administrator shall secure stamps, of those
designs, types, and denominations as the tax
administrator prescribes, suitable to be affixed to
packages of cigarettes as evidence of the
payment of the tax imposed by section 44-20-12. Each
roll of stamps, or group of sheets, shall have a
separate serial number, which shall be legible at
the point of sale. The administrator shall keep
records of which distributor purchases each roll or
group of sheets identified by serial number. If
the administrator permits distributors to purchase
partial rolls or sheets, in no case may stamps
bearing the same serial number be sold to more than
one distributor. The remainder of the roll or
sheet, if any, shall either be retained for later
purchases by the same distributor or destroyed. The tax administrator
is the custodian of the
stamps and of the dies, plates, and other
materials and things used in the manufacture of the
stamps.
44-20-19. Sale
of stamps to distributors and dealers. – Sales of stamps to
distributors. -- The tax administrator sells
shall sell stamps only to licensed distributors at a
discount. and to licensed dealers at their
face value. The distributor remits to the division of
taxation ninety-eight and three-fourths percent
(98.75%) of the face value of the stamps thereby
receiving a discount of one and one-quarter
percent (1.25%) of the face value of the stamps. The
ninety-eight and three-fourths percent (98.75%)
remitted to the tax administrator is paid over to
the general revenue. The tax administrator may,
in his or her discretion, permit a licensed
distributor or licensed dealer to pay for
the stamps within thirty (30) days after the date of
purchase; provided, that a bond satisfactory to
the tax administrator in an amount not less than the
sale price of the stamps has been filed with the
tax administrator conditioned upon payment for
the stamps. The tax administrator shall keep
accurate records of all stamps sold to each
distributor. and dealer.
44-20-20.
Use of metering machine in lieu of stamps. – The tax administrator, if
he or
she determines that it is practicable to stamp
by impression packages of cigarettes by means of a
metering machine, may, in lieu of selling stamps
under the provisions of section 44-20-19,
authorize any licensed distributor or
licensed dealer to use any metering machine approved by the
administrator, the machine to be sealed by
the administrator before being used and to be used in
accordance with regulations prescribed by the
administrator.;
provided, that such meter
impressions shall contain a number or mark,
legible at the point of sale, that is unique to the
particular distributor; and provided, further,
that the metering machine shall be sealed by the
administrator before being used and shall be
used in accordance with regulations prescribed by
the administrator. The administrator shall keep
records of which distributor is assigned which
meter impression number. Any licensed
distributor or licensed dealer authorized by the tax
administrator to affix stamps to packages by
means of a metering machine shall make a
prepayment, allowing for the discount, if any,
provided for in section 44-20-19, covering the
amount of tax for which his or her meter
register is set, or in the discretion of the tax
administrator file with the tax administrator a
bond in an amount and with a surety as the tax
administrator may determine, conditioned upon
the payment of the tax upon stamped cigarettes.
The bond is in full force and effect for a
period of one year and a day after the expiration of the
bond, unless a certificate is issued by the tax
administrator to the effect that all taxes due to the
state have been paid. The tax administrator
causes each metering machine approved by the tax
administrator to be read and inspected at least
once a month and, unless being used on a
prepayment basis, determines at the time of each
inspection the amount of tax due from the
distributor or dealer using the machine
after allowing for the discount, if any, provided for in
section 44-20-19, which tax is due and payable
upon demand of the tax administrator or his or her
authorized agent.
44-20-21.
Transfer of stamps prohibited -- Redemption of unused stamps. -- No
person shall sell or transfer any stamps under
the provisions of this chapter. The tax administrator
shall redeem any unused, uncancelled stamps
presented in unbroken sheets or packages, under
rules and regulations of the tax administrator,
by any licensed distributor or licensed dealer within
six (6) months of the date of purchase, at a
price equal to ninety-eight percent (98%) of their face
value.
44-20-23. Payment
of tax by manufacturer or shipper outside state. -- When the tax
administrator finds that the collection of the
tax imposed by this chapter would be facilitated, the
administrator may, in his or her discretion,
authorize any person resident or located outside this
state who manufactures cigarettes, or who
ships cigarettes into this state for sale in this state, and
who qualifies as a distributor as defined in
section 44-20-1,
to obtain a distributor’s license
pursuant to this chapter, whether or not the
person has a place of business in this state, upon
complying with the requirements of the tax
administrator, to affix, or cause to be affixed, the
stamps required by this chapter on behalf of the
purchasers of those cigarettes who would be
taxable, and the tax administrator may sell the
stamps to persons as provided in section 44-20-19
or authorize the use of a machine by persons
such distributors as provided in section 44-20-20.
44-20-24.
Affixing of stamps outside state by vending machine operator. -- Any
person distributor who operates a vending
machine or vending machines for cigarettes in this
state, but who maintains his or her regular
business establishment or headquarters outside of this
state may, in the discretion of the tax
administrator, accordance with the provisions of section 44-
20-23, be permitted to affix, or cause to be
affixed, the stamps required by this chapter at that
establishment or headquarters outside of this
state.
44-20-26. Agreement
by nonresident to submit records -- Attorney to receive
process. -- The Any
nonresident person shall agree to distributor who receives authorization
and
permission to affix stamps under sections
44-20-23 and 44-20-24 shall, upon the request of the
tax administrator submit his or her books,
accounts, and records to examination during reasonable
business hours by the administrator or his or
her authorized agent. Each nonresident person, other
than a foreign corporation complying with the
provisions of chapter 1.1 of title 7 shall, in writing,
appoint the secretary of state, or his or her
successors in office, to be his or her attorney, that
appointment to be made, acknowledged, and filed
in the manner prescribed for foreign
corporations engaging in business in this state.
Service upon the attorney is sufficient service
upon any nonresident person, whether a foreign
corporation complying with the provisions of
chapter 1.1 of title 7 or not, and may be made
by leaving a attested copy of the process with the
secretary of state or at his or her office. When
legal process against any nonresident person is
served upon the secretary of state, the
secretary shall notify the nonresident person in the manner
provided for notification of service of process
in the case of foreign corporations under chapter
1.1 of title 7 and collect
the fee specified in that chapter.
1.2
44-20-28.
Stamping by distributors required. -- (a) Each distributor shall
affix, or
cause to be affixed, at the location for which his
or her license is issued, except as provided in this
chapter, in the manner the tax administrator may
specify in regulations issued pursuant to this
chapter, to each package of cigarettes sold or
distributed by the distributor, stamps of the proper
denominations. Those stamps may be affixed by a
distributor at any time before the cigarettes are
transferred out of his or her possession.
(b) Any person
who is doing business as both a distributor and a dealer shall maintain
separate areas for stamped and unstamped
cigarettes.
44-20-30.
Manner of affixing stamps. -- Whether stamps are Stamps shall
be affixed by
a licensed distributor, or by a
dealer, they are and shall be affixed to the box or other container
from which or in which cigarettes taxed by this
chapter are normally sold at retail. The stamps are
affixed in a manner that their removal will
require continued application of water or steam. The
required amount of stamps is affixed to each
individual package or container. The administrator
has power to determine how any particular brand,
type, or kind of cigarettes is stamped, if any
question arises under this chapter concerning
that stamping.
44-20-32.
Cancellation of used stamps. -- The administrator may require the
cancellation, by a method or methods that he or
she prescribes, of stamps used on affixed by a
distributor to any or all packages of cigarettes.
, whether the stamps are affixed by a distributor or
by a dealer.
44-20-33. Sale
of unstamped cigarettes prohibited -- Maximum period of holding by
dealer. --Sale of unstamped
cigarettes prohibited. -- No distributor shall sell, and no other
person shall sell, offer for sale, display for
sale, or possess with intent to sell any cigarettes, the
packages or boxes containing which do not bear
stamps evidencing the payment of the tax
imposed by this chapter. ; provided,
that a licensed dealer may keep on hand, at the location for
which his or her license is issued, unstamped cigarettes
for a period not exceeding twenty-four
(24) hours. Any unstamped cigarettes in the
possession of a dealer are presumed to have been
held by the dealer for more than twenty-four
(24) hours unless proof is shown to the contrary.
44-20-35. Penalties
for violations as to unstamped cigarettes. -- Any person who
violates any provision of sections 44-20-33 and
44-20-34 shall be fined one thousand dollars
($1,000), or five (5) times the retail value of
the cigarettes involved, whichever is greater, not less
than one hundred fifty dollars ($150) and not
more than five hundred dollars ($500) for the first
offense, and for each subsequent offense, shall
be fined one thousand dollars ($1,000), or five (5)
times the retail value of the cigarettes involved,
whichever is greater,
not less than two hundred
dollars ($200) plus twenty-five dollars ($25.00)
for each carton in excess of eight (8) cartons, nor
more than ten thousand dollars ($10,000), or be imprisoned not
more than three (3) years, or be
both fined and imprisoned.
44-20-36. Purchase
of unstamped cigarettes. -- Possession of unstamped
cigarettes. --
(a) No person other than a licensed distributor
or licensed dealer shall knowingly purchase any
cigarettes within this state unless the
packages, boxes, or containers in which or from which the
cigarettes are sold or offered for sale bear
stamps evidencing the payment of the tax provided in
this chapter. Any person violating the
provisions of this section is subject to a fine of not more
than one hundred dollars ($100) for each
offense.
(b) Nothing in
this chapter shall be construed to require the administrator to proceed
against any person when the administrator has
good reason to believe that the person is not
willfully attempting to evade the tax.
Except as
provided in sections 44-20-14, 44-20-16 and 44-20-33.1, no person, other than
a licensed manufacturer or importer, or a
licensed distributor that receives unstamped cigarette
packages directly from a licensed cigarette
manufacturer or importer and holds such cigarettes in
accordance with subsection 44-20-28(a), shall
purchase and hold an unstamped cigarette package.
44-20-37. Seizure
and sale of unstamped cigarettes. – Seizure and destruction of
unstamped cigarettes. -- Any cigarettes found at
any place in this state without stamps affixed
as required by this chapter are declared to be
contraband goods and may be seized by the
administrator, his or her agents, or employees,
or by any sheriff, deputy sheriff, or police officer
when directed by the administrator to do so,
without a warrant. ; provided, that nothing in this
section shall be construed to require the
administrator to confiscate unstamped cigarettes when
the administrator has reason to believe that the
owner of the cigarettes is not willfully or
intentionally evading the tax imposed by this
chapter. Any cigarettes seized under the provisions
of this chapter may, in his or her discretion,
be offered by the administrator for sale at public
auction to the highest bidder after
advertisement, as provided in section 44-20-38. Before
delivering any cigarettes so sold to the
purchaser, the administrator shall require the purchaser to
affix to the packages the amount of stamps
required by this chapter. Any cigarettes seized under
the provisions of this chapter shall be
destroyed. The
seizure and sale /or destruction of any
cigarettes under the provisions of this section
does not relieve any person from a fine or other
penalty for violation of this chapter.
44-20-38. Advertisement
and hearing on cigarettes seized. – Hearing on cigarettes
seized. -- When any cigarettes are seized under the
provisions of section 44-20-37, the
administrator may, at his or her discretion,
after a hearing as provided in section 44-20-47,
advertise them for sale, in a newspaper
published or having a circulation in the city or town in
which the seizure took place, at least five (5)
days before the sale. Any any person claiming an
interest in the cigarettes may make written
application to the administrator for a hearing, stating
his or her interest in the cigarettes and his or
her reasons why they should not be forfeited. Further
proceedings on the application for a hearing are
taken as provided in sections 44-20-47 and 44-
20-48. No sale destruction of any
cigarettes under the provisions of section 44-20-37 shall be
made carried out while an application for a
hearing is pending before the administrator, but the
pendency of an appeal under the provisions of
section 44-20-48 shall not prevent the sale
destruction unless the appellant posts a
satisfactory bond, with surety, in an amount double the
estimated value of the cigarettes, conditioned
upon the successful termination of the appeal.
44-20-39.
Forgery and counterfeiting -- Tampering with meters -- Reuse of stamps
or containers. -- Any person who
fraudulently makes or utters or forges or counterfeits any
stamp, disc, license, or marker, prescribed by the
administrator under the provisions of this
chapter, or who causes or procures this to be
done, or who willfully utters, publishes, passes or
renders as true, any false, altered, forged, or
counterfeited stamp, license, disc, or marker, or who
knowingly possesses any false, altered, forged,
or counterfeited stamp, license, disc, or marker, or
who tampers with or causes to be tampered with
any metering machine authorized to be used
under the provisions of this chapter, or who
removes or prepares any stamp with intent to use, or
cause that stamp to be used, after it has
already been used, or who buys, sells, offers for sale, or
gives away any washed or removed or restored
stamp to any person, or who has in his or her
possession any washed or restored or removed or
altered stamp which was removed from the
article to which it was affixed, or who reuses
or refills with cigarettes any package, box, or
container required to be stamped under this
chapter from which cigarettes have been removed, is
deemed guilty of a felony, and, upon conviction,
shall be fined ten thousand dollars ($10,000), or
be imprisoned for not more than ten (10) years,
or both.
44-20-40. Records
of distributors and dealers -- Investigation and inspection of
books, premises and stock. -- Records -
Investigation and inspection of books, premises and
stock. - - (a) Each manufacturer, importer,
distributor and dealer shall maintain copies of invoices
or equivalent documentation for, or itemized
for, each of its facilities for each transaction (other
than a retail transaction with a consumer)
involving the sale, purchase, transfer, consignment, or
receipt of cigarettes. The invoices or
documentation shall show the name and address of the other
party and the quantity by brand style of the
cigarettes involved in the transaction. Each distributor
and each dealer must keep complete and accurate
records of all cigarettes manufactured,
produced, purchased, or sold, in a kind and form
as the administrator may prescribe. All records
and invoices required under this section, or
as may be required by the administrator in support of
the provisions of this section must be safely
preserved for three (3) years in a manner to insure
permanency and accessibility for inspection by
the administrator or his or her authorized agents.
(b) Records
required under this section shall be preserved on the premises described in
the relevant license in such a manner as to
ensure permanency and accessibility for inspection at
reasonable hours by authorized personnel of the
administrator. With the administrator’s
permission, persons with multiple places of
business may retain centralized records, but shall
transmit duplicates of the invoices or the
equivalent documentation to each place of business
within twenty-four (24) hours upon the request
of the administrator or his or her designee.
(c) The
administrator or his or her authorized agents may examine the books, papers,
reports and records of any manufacturer, importer,
distributor or dealer in this state for the
purpose of determining whether taxes imposed by
this chapter have been fully paid, and may
investigate the stock of cigarettes in or upon
any premises for the purpose of determining whether
the provisions of this chapter are being obeyed.
The administrator in his or her sole discretion
may share the records and reports required by
such sections with law enforcement officials of the
federal government or other states.
44-20-43.
Violations as to reports and records. -- Any person who fails to submit
the
reports required in this chapter or by the
administrator under this chapter, or who makes any
incomplete, false, or fraudulent report, or who
refuses to permit the administrator or his or her
authorized agent to examine any books, records,
papers, or stocks of cigarettes as provided in this
chapter, or who refuses to supply the
administrator with any other information which the
administrator requests for the reasonable and
proper enforcement of the provisions of this chapter,
shall be fined not more than five thousand
dollars ($5,000) for the first offense, and for each
subsequent offense, shall be fined not more than
ten thousand dollars ($10,000), or be imprisoned
not more than one year, five (5)
years, or be both fined and imprisoned.
44-20-45.
Importation of cigarettes with intent to evade tax. -- Any person,
firm,
corporation, club, or association of persons,
not having a license when required as provided in
this chapter, who orders any cigarettes for
another or pools orders for cigarettes from any persons
or connives with others for pooling orders, or
receives in this state any shipment of unstamped
cigarettes on which the tax imposed by this
chapter has not been paid, for the purpose and
intention of violating the provisions of this
chapter or to avoid payment of the tax imposed in this
chapter, is guilty of a misdemeanor, and is
subject to the penalties provided in section 44-20-35
for selling unstamped cigarettes. felony and shall be
fined ten thousand dollars ($10,000) or five
(5) times the retail value of the cigarettes
involved, whichever is greater, or imprisoned not more
than five (5) years, or both.
44-20-51.
Penalty for violations generally. -- Except as provided in this
chapter, any person
who violates any provision of this chapter is
guilty of a misdemeanor and shall be fined not more
than one hundred dollars ($100) for each
offense. one thousand dollars ($1,000). Whoever
knowingly violates any provision of this
chapter, or of regulations prescribed thereunder, shall, in
addition to any other penalty provided in this
chapter, for each such offense, be fined not more
than five thousand dollars ($5,000) or
imprisoned not more than one year, or both.
SECTION 4. This
act shall take effect on October 1, 2007.
=======
LC00409/SUB B
========