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1997 SESSION
970848701Be it enacted by the General Assembly of Virginia:
1. That §§ 58.1-1000, 58.1-1001, 58.1-1003 through 58.1-1010, 58.1-1012, 58.1-1013, 58.1-1014, 58.1-1017, 58.1-1018, 58.1-1019, and 58.1-1021 of the Code of Virginia are amended and reenacted as follows:
§ 58.1-1000. Definitions.
As used in this chapter, unless the context clearly shows otherwise, the term or phrase:
"Retail dealer" includes every person other than a wholesale dealer, as
defined in this section, who sells or offers for sale any
cigarettes tobacco products.
"Retail sale" or "sale at retail" includes all sales except sales by wholesalers to retail dealers or other wholesalers for resale.
"Stamps" means the stamp or stamps by the use of which the tax levied under this chapter is paid and shall be officially designated as Virginia revenue stamps. The Department is hereby authorized to provide for the use of any type of stamp which will effectuate the purposes of this chapter including but not limited to decalcomania and metering devices.
"Storage" means any keeping or retention in this Commonwealth of
cigarettes tobacco products for any purpose
except sale in the regular course of business or subsequent use solely outside
this Commonwealth.
"Tobacco products" means cigarettes, cigars, and smokeless tobacco, made of tobacco or any substitute therefor, taxed pursuant to this chapter.
"Use" means the exercise of any right or power over cigarettes
tobacco products incident to the ownership thereof or by any
transaction where possession is given, except that it shall not include the
sale of cigarettes tobacco products in the regular course
of business.
"Wholesale dealer" includes persons who sell cigarettes
tobacco products at wholesale only to retail dealers for the
purpose of resale only, or who sell at wholesale to institutional, commercial
or industrial users. The phrase shall also include chain store distribution
centers or houses which distribute cigarettes tobacco products
to their stores for sale at retail.
§ 58.1-1001. Tax levied; rate.
In addition to all other taxes now imposed by law, every person within this
Commonwealth who sells, stores or receives cigarettes made of tobacco or
any substitute thereof tobacco products, for the purpose of
distribution to any person within this Commonwealth, shall pay to this
Commonwealth an excise tax of one and one-quarter mills on each such
cigarette. at the following rates:
1. Upon cigarettes, (i) until July 1, 1998, two and one-half mills per cigarette; (ii) from July 1, 1998, until July 1, 1999, three and three-quarters mills per cigarette; (iii) from July 1, 1999, until July 1, 2000, five mills per cigarette; and (iv) beginning July 1, 2000, six and one-quarter mills per cigarette.
2. Upon cigars weighing not more than three pounds per thousand, one cent for each ten cigars, or fractional part thereof.
3. Upon cigars retailing for three and one-third cents each or less, one dollar per thousand.
4. Upon cigars retailing for more than three and one-third cents each but not more than five cents each, two dollars per thousand.
5. Upon cigars retailing for more than five cents each but not more than eight cents each, three dollars per thousand.
6. Upon cigars retailing for more than eight cents each but not more than ten cents each, five dollars per thousand.
7. Upon cigars retailing for more than ten cents each but not more than twenty cents each, ten dollar per thousand.
8. Upon cigars retailing for more than twenty cents each, $13.50 per thousand.
9. Upon chewing tobacco, snuff, and other smokeless tobacco, two percent of the retail price.
Whenever in this chapter reference is made to the retail price of a tobacco product as the basis for computing the tax, it means the ordinary, customary or usual price paid by the consumer for such products. When the retail price is the basis for computing the amount of stamps required on any item, it means the retail price of the item before adding the amount of the tax.
§ 58.1-1003. How paid; affixing of stamps; records of dealers.
A. The taxes imposed by this chapter shall be paid by affixing stamps equaling
the amount of the tax in the manner and at the time herein set forth.
The In the case of cigarettes, the stamps shall be
affixed to each individual package, bag, box or can in such a manner that their
removal will require continued application of water or steam.
In the case of cigars and smokeless tobacco, the stamps
shall be affixed to the box or container in which or from which such products
are normally sold at retail. Time allowed for affixing stamps shall be
as follows: Every wholesale or retail dealer in this Commonwealth shall, within
one hour after receipt of any unstamped cigarettes tobacco
products, begin affixing to the same the requisite denominations and
amount of stamp or stamps that represent the proper tax levied by this chapter.
Stamping shall be continued with reasonable diligence by the wholesale or
retail dealer until all of the unstamped cigarettes tobacco
products have been stamped; however, any wholesale dealer engaged in
interstate business shall be permitted to set aside such part of his stock as
may be necessary for the conduct of such interstate business without affixing
the stamps required by this chapter. Interstate stock shall be kept entirely
separate from stamped stock in such a manner as to prevent the commingling of
the interstate stock with the stamped stock.
B. Every wholesale dealer shall at the time of shipping or delivering any
cigarettes tobacco products make and retain a true
duplicate invoice of the same which shall show full and complete details of the
sale or delivery of the taxable article. Wholesale and retail dealers shall
also keep a record of purchases of all cigarettes tobacco
products, and retain all books, records, and memoranda pertaining to the
purchase and sale of such cigarettes tobacco products.
C. Any wholesaler or retailer who fails or refuses to comply with any of the above provisions shall be guilty of a Class 1 misdemeanor.
§ 58.1-1004. Retail dealers receiving tobacco products from outside Commonwealth to mail duplicate invoice to Department.
Any retail dealer of cigarettes tobacco products who
purchases or receives such cigarettes tobacco products
from without the Commonwealth, whether the same have been ordered or
purchased through a wholesaler in this Commonwealth, or by drop shipment or
otherwise, shall within twelve hours of receipt of such cigarettes
tobacco products mail by registered mail a true duplicate
invoice of all such purchases or receipts to the Department. The invoice shall
carry the name of the person from whom or through whom such purchases or
shipments of the cigarettes tobacco products were so
received, showing kinds and quantities. Any retail dealer failing or refusing
to furnish duplicate invoices, in both the manner and time allowed, shall be
guilty of a Class 2 misdemeanor.
§ 58.1-1005. Duties of carriers, etc., transporting tobacco products.
All common carriers, contract carriers, buses, and trucks transporting
cigarettes tobacco products shall maintain a statement or
record of all consignments or deliveries of cigarettes tobacco
products, showing date, point of origin, point of delivery and to whom
delivered, and time of delivery, and may be required under regulations to be
prescribed by the Department to transmit to the Department a periodic statement
of such consignments or deliveries. Any person who fails to maintain the
statement or record required by this section or who refuses to transmit to the
Department the statement hereinabove provided for shall be guilty of a Class 2
misdemeanor.
§ 58.1-1006. Forms and kinds of containers, methods of breaking packages, and methods of affixing stamps; penalty for interfering with enforcement of article.
The Department shall provide by rules and regulations forms and kinds of
containers, the methods of breaking packages and methods of affixing stamps
that shall be employed by persons subject to the cigarette tax
imposed by this article, thereby making possible the enforcement of
payment of the cigarette tax by inspection. Any person subject to
this tax engaging in or permitting such practices as are prohibited by rules
and regulations of the Department or any person who upon demand of the
Department or any of its officers or agents refuses to allow full inspection of
the premises or any part thereof, or in any way interferes with any agent of
the Department in the performance of his duties in enforcing this chapter,
shall be guilty of a Class 2 misdemeanor.
§ 58.1-1007. Documents touching purchase, sale, etc., of tobacco products to be kept for three years, subject to inspection.
It shall be the duty of every person receiving, storing, selling, handling or
transporting cigarettes tobacco products in any manner
whatsoever, to preserve all invoices, books, papers, cancelled checks, or other
documents relating to the purchase, sale, exchange, receipt or transportation
of all cigarettes tobacco products for a period of three
years. All such invoices, books, papers, cancelled checks or other memoranda
and records shall be subject to audit and inspection by any duly authorized
representative of the Department at all times. Any person who fails or refuses
to keep and preserve the records as herein required, or who upon request by a
duly authorized agent of the Department fails or refuses to allow an audit or
inspection of records as hereinabove provided, shall be guilty of a Class 2
misdemeanor.
§ 58.1-1008. Monthly reports of wholesale dealers; penalty.
Every wholesale dealer qualifying as such with the Department shall be required
to file a report between the first and tenth of each month, covering the
purchase or receipt by them of all cigarettes tobacco products
during the preceding month. The report shall give in detail the different
kinds and quantities of cigarettes tobacco products so
purchased or received by them during the preceding month. The report shall
also list all orders for cigarettes tobacco products
purchased through such wholesale dealer from without this Commonwealth on
a drop shipment and consigned direct to the person ordering such cigarettes
through such wholesale dealer. If, upon examination of invoices of any
wholesale dealer, such dealer is unable to furnish evidence to the Department
of sufficient stamp purchases to cover unstamped cigarettes
tobacco products purchased by him, the prima facie presumption
shall arise that such cigarettes tobacco products were
sold without the proper stamps affixed thereto in violation of §
58.1-1003. Any wholesaler failing or refusing to file the report required by
this section in the manner and time allowed shall be guilty of a Class 2
misdemeanor.
§ 58.1-1009. Preparation, design and sale of stamps; unlawful sale of stamps a felony.
The Department is hereby authorized and directed to have prepared and to sell
stamps suitable for denoting the tax on all cigarettes tobacco
products. The Department shall design, adopt and promulgate the form and
kind of stamps to be used. Stamps so adopted and promulgated shall be known as
and termed "Virginia revenue stamps," and in any information or indictment, it
shall be sufficient to describe the stamps as "Virginia revenue stamps."
Any person other than the Department who sells such revenue stamps, not affixed
to cigarettes sold and delivered by them, whether the said stamps
be are genuine or counterfeit, shall be guilty of a Class
6 felony. When wholesalers have qualified as such with the Department, as
provided in § 58.1-1011, and purchase stamps as prescribed herein for use
on taxable cigarettes sold and delivered by them, the Department shall allow on
such sales of revenue stamps a discount of two and one-half cents per carton.
As used herein "carton" shall mean ten packs of cigarettes, each containing
twenty cigarettes.
§ 58.1-1010. Sale of unstamped tobacco products by wholesale dealers.
A. A wholesale dealer who is duly qualified as such under § 58.1-1011 may
sell cigarettes tobacco products without the Virginia
revenue stamps affixed thereto, provided such cigarettes
tobacco products are sold and shipped or delivered in
interstate commerce to a person outside this Commonwealth. Such wholesaler
shall have on file a record of such sale, the original purchase order, a copy
of the invoice therefor, and a receipt from a common carrier, contract carrier,
or post office showing shipment for delivery in such other state, or, if
delivered by such dealer to the purchaser at a point outside of this
Commonwealth, a receipt showing such delivery in addition to the record,
original purchase order and copy of the invoice relating to such sale.
B. Such duly qualified wholesaler may sell cigarettes tobacco
products without the Virginia revenue stamps affixed thereto, provided:
1. Such cigarettes tobacco products are sold to a person
who is engaged in business as a dealer in cigarettes in another state;
2. Such cigarettes tobacco products are purchased
exclusively for resale in the other state; and
3. Such cigarettes tobacco products are at the time of
sale properly stamped by the Virginia wholesaler with revenue stamps authorized
and issued by the other state for use upon such cigarettes
tobacco products. A wholesaler shall have on file a record of each such
sale, the original purchase order, a copy of the invoice therefor, a receipt
from the purchaser showing that such purchase was made exclusively for resale
in the other state, and a record showing the purchase and use of such revenue
stamps of the other state. Any such wholesaler with a place of business in a
city located partly within and partly without this Commonwealth, or in a county
adjoining such city, shall not be required to obtain such receipt from a
purchaser from the other state, if the other state imposes a cigarette
tobacco products tax and if the cigarette
tobacco products tax in the other state is at a higher rate
than the tax imposed by the Commonwealth of Virginia.
C. Cigarettes Tobacco products may be sold by duly
qualified wholesalers, without revenue stamps affixed thereto, when sold to the
United States or to any instrumentality thereof for resale to or for the use or
consumption by members of the armed services of the United States, or when sold
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 and homes of the Veterans Administration, provided the
books and records, including original purchase orders and copies of invoices
showing such sales, are kept on file.
D. Cigarettes Tobacco products may be sold by duly
qualified wholesalers, without revenue stamps affixed thereto, when sold and
delivered to ships regularly engaged in foreign commerce or coastwise shipping
between points in this Commonwealth and points outside of this Commonwealth for
resale to or for use or consumption upon such ship or in foreign commerce.
E. The Department is authorized to adopt rules and regulations with respect to the enforcement of the provisions of this section to prevent any evasion of the tax herein imposed.
A failure to comply with any provision of this section with respect to any sale
of unstamped cigarettes tobacco products shall subject
the wholesaler to the payment of the tax thereon imposed by this chapter.
Any person who violates any of the provisions of this section shall be guilty of a Class 2 misdemeanor.
§ 58.1-1012. Duties of wholesale dealer on shipping, delivering or sending out tobacco products.
Every wholesale dealer in this Commonwealth shall, before shipping, delivering
or sending out any tobacco products to any dealer in this Commonwealth or for
sale in this Commonwealth, cause the same to have the requisite denominations
and amount of stamps to represent the tax affixed as stated herein, and every
other wholesale dealer shall at the time of shipping or delivering any
cigarettes tobacco products make a true duplicate invoice
of the same, showing the date, amount and value of each class of articles
shipped or delivered, and retain a duplicate thereof. Wholesale dealers in this
Commonwealth who ship, deliver, or send any cigarettes tobacco
products to the United States government for sale or distribution to any
military, naval or marine reservation owned by the United States government
within this Commonwealth shall be required to carry out the provisions set out
in this chapter for such sales or deliveries.
§ 58.1-1013. Penalty for failing to affix stamps; subsequent violations of article.
Any person within this Commonwealth who sells, stores or receives
cigarettes tobacco products for the purpose of
distribution to another within this Commonwealth and fails to properly affix
the required stamps to any cigarettes tobacco products
pursuant to the provisions of this chapter shall be required to pay as
part of the tax imposed hereunder, a penalty of twenty-five dollars, to be
assessed and collected by the Department as other taxes are collected. Where
willful intent exists to defraud the Commonwealth of the tax levied under this
chapter, such person shall be required to pay a penalty of $250. It shall be
prima facie evidence of intent to defraud when the number of such unstamped
cigarettes exceeds thirty packs.
Each pack of cigarettes commodity not having proper
stamps affixed thereto as herein required shall be deemed a separate offense.
Any cigarettes tobacco products in the place of business
of any person required by the provisions of this chapter to stamp the same
shall be prima facie evidence that they are intended for sale.
Any person who has been found guilty of violating any of the provisions of this article and who, after being punished by fine, penalty, assessment or imprisonment, is guilty of a second or subsequent violation of this chapter shall, upon being found guilty of such second offense, have his or its permit revoked by the Department, and no further permit shall be issued or granted to such person for a period of one year from the date the permit has been revoked.
§ 58.1-1014. Permits required for transporting or distributing tobacco products.
Any person who transports or distributes cigarettes tobacco
products in any manner whatsoever within this Commonwealth who
has does not have a permit issued under this
chapter, shall, before transporting or distributing any of such tobacco
products as enumerated and defined herein, secure a permit from the Department
or be granted a waiver therefrom when the Commissioner is of the opinion that
such permit is unnecessary. The Department shall, before issuing or waiving any
such permit, ascertain from the applicant the nature of his business and the
names of each county and city to which the applicant desires to transport or
distribute cigarettes tobacco products. A permit when so
issued shall be conspicuously displayed on the vehicle for which it is issued.
Failure to properly display the permit as required shall be deemed a violation
of this section. Any person having been issued a permit who engages in any
practices which are deemed by the Department to be injurious to the collection
of the tax provided herein may have his permit revoked by the
Department, and no further permit shall be issued for six months and
not then unless the Department is satisfied it is advisable. Duplicate permit
cards will be issued to replace permits lost or damaged upon application. Any
person found transporting or distributing cigarettes tobacco
products without first securing a permit as required above shall be
guilty of a Class 1 misdemeanor.
§ 58.1-1017. Sale, purchase, possession, etc., of tobacco products for purpose of evading tax.
It shall be unlawful for any person, except as otherwise provided by law, to
sell, purchase, transport, receive or possess cigarettes
tobacco products unless the same have been stamped in the
manner required by law, for the purpose of evading the payment of the taxes on
such products. Any person violating the provisions of this section shall be
guilty of a Class 2 misdemeanor.
If a person who is not a regularly licensed dealer as provided in § 58.1-1011 has in his possession within the Commonwealth more than thirty packages of unstamped cigarettes, such possession shall be presumed to be for the purpose of evading the payment of the taxes due thereon.
§ 58.1-1018. Tax imposed on storage, use or consumption of tobacco products; exemption of products on which sales tax has been paid.
An excise tax is hereby imposed on the storage, use or other consumption in
this Commonwealth of cigarettes tobacco products
purchased at retail in an amount equal to that set out in §
58.1-1001. Every person storing, using or otherwise consuming in this
Commonwealth cigarettes tobacco products purchased at
retail shall be liable for the tax imposed by this article, and the liability
shall not be extinguished until the tax has been paid to this Commonwealth;
however, if such cigarettes tobacco products have
attached thereto the requisite stamps or if the excise tax imposed by Article 1
(§ 58.1-1000 et seq.) has been paid by the seller of such
cigarettes tobacco products, then the tax imposed by this
article shall not be due.
§ 58.1-1019. Monthly returns and payment of tax.
Every person owning or having in his possession or custody
cigarettes tobacco products, the storage, use or other
consumption of which is subject to the tax imposed by this article, shall, on
or before the tenth day of the month following, file with the Department a
return for the preceding month in such form as may be prescribed by the
Department showing the cigarettes tobacco products
purchased by such person, and such other information as the Department
may deem necessary for the proper administration of this article. The return
shall be accompanied by a remittance of the amount of tax herein imposed.
§ 58.1-1021. Documents touching purchase, sale, etc., of tobacco products to be kept for three years, subject to inspection.
It shall be the duty of every person storing, using or otherwise consuming in
this Commonwealth cigarettes tobacco products subject to
the provisions of this article to keep and preserve all invoices, books,
papers, cancelled checks, or other memoranda touching the purchase, sale,
exchange, receipt, ownership, storage, use or other consumption of such
cigarettes tobacco products for a period of three years.
All such invoices, books, papers, cancelled checks, or other memoranda shall be
subject to audit and inspection by any duly authorized representative of the
Department at any reasonable time. Any person who fails or refuses to keep and
preserve the records as herein required, or who upon request by a duly
authorized agent of the Department fails or refuses to allow an audit or
inspection of the records as herein provided, shall be guilty of a Class 2
misdemeanor.
2. That the provisions of this act may result in a net increase in periods of imprisonment in state correctional facilities. Pursuant to § 30-19.1:4, the estimated amount of the necessary appropriation is $0.