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Virginia currently imposes a cigarette excise tax (Code of Virginia §58.1-1000 et seq.) in the amount of 1.5 cents per cigarette. This equates to 30-cents per pack for a standard pack of 20 cigarettes, or $3.00 per carton. Payment of the tax is evidenced by affixing a Virginia Revenue Stamp (cigarette stamp) to each pack of cigarettes.
Only suppliers who have applied for and received a Stamping Agent Permit from the Department of Taxation (TAX) may purchase Virginia cigarette stamps. The Virginia Department of Taxation is the only authorized dealer of cigarette stamps, and the stamps may neither be resold by, returned to or purchased from, parties other than the Department.
Every stamping agent who sells, stores, or receives cigarettes for the purpose of distribution to any person, firm, corporation, or association within Virginia must pay the state excise tax on such cigarettes by affixing the stamps to the cigarette packs. There are only a few exceptions to this requirement, which are outlined under Exemptions to Stamping Requirements.
Other than exempt cigarettes, all cigarettes for sale in Virginia should have the revenue stamp affixed to each pack. Persons in possession of unstamped cigarettes are liable for the payment of the excise tax as well as a penalty of up to $500 per pack of unstamped cigarettes. In cases where a person is in possession of more than 500 packs of unstamped cigarettes, the maximum penalty is increased to $2,500 per pack. In addition, it is a class 2 misdemeanor to possess unstamped cigarettes when the amount of unstamped cigarettes is less than 3,000 packs and a class 6 felony to possess more than 3,000 packs of unstamped cigarettes. Please refer to Tax Bulletin 08-13 for complete details on cigarette tax penalties.
Several Virginia localities levy local cigarette taxes. The local Commissioner of Revenue should be contacted directly for information on local tax rates and stamping requirements.
Although roll-your-own (RYO) tobacco is subject to the cigarette tax, the cigarette tax on RYO is administered in the same manner as the Tobacco Products Tax (see "Other Tobacco Products Tax"). Roll-your-own tobacco means any tobacco labeled for, or suitable for, use and purchase by consumers as tobacco for making cigarettes for personal consumption.
It is unlawful for any person to stamp or offer for sale a package of cigarettes of a manufacturer or brand family that is not included in the Tobacco Directory maintained by the Virginia Office of the Attorney General.
The distribution into Virginia of cigarettes that are intended to be sold outside the United States or would otherwise violate federal law if sold in Virginia is prohibited. Any person who violates this prohibition is guilty of a Class 5 felony and is subject to a penalty of 1 to 10 years in jail or 1 year in jail and/or a $2,500 fine. In addition, the Virginia Department of Taxation will assess a fine of up to the greater of 500% of the retail value of the cigarettes involved or $5,000.
Only cigarette manufacturers, cigarette wholesale distributors or retailers may be licensed as a stamping agent. To become a licensed stamping agent you must file an application (Form TT-1(PDF 30 Kb) Application for Cigarette Stamping Permit and Tobacco Products Tax Distributor's License). There is a $600 application fee due with the application and a criminal background check will be conducted on the principal operatives of the company. Applicants should allow at least 60 days for processing of their applications and the issuance of their permits. Permits are valid for a period of three years from the date of issue.
Principal operatives requiring a criminal background check includes anyone who meets any of the following criteria: any officer, director, manager, sole proprietor, partner, member, stockholder, or any other person possessing an ownership interest of 10% or greater in the applicant entity. Background checks will also be required for anyone who exercises authority or control over the purchase, storage, sale or distribution of cigarettes or OTP, or over the compliance with any cigarette or tobacco products tax laws.
Any person who assumes any of the roles mention above after the initial application is filed must apply to the Virginia Department of Taxation for a background check within thirty (30) days of assuming that role. Cigarette distributors with multiple locations must obtain a separate permit for each stamping location. There is an additional $100 fee for each background check submitted subsequent to the initial application.
The monthly cigarette tax reporting forms, TT-13 and TT-14, have been redesigned. The major difference in the form is the unit of measure has been changed from tax values to actual physical counts of stamps and cigarette packs. There are also modifications to the general format and layout, as well as information required on the supporting schedules.
Stamping agents must begin using the new TT-13 and TT- TT-14 forms with the July 2009 report which is due August 20, 2009. The new forms are available for viewing at the TAX website. Please continue to use the current TT -13 and TT-14 for reports through the month of June 2009.
All stamping agents must file a Form TT-13 (Virginia based stamping agents) or TT-14 (stamping agents based outside of Virginia) by the 20th of each month to report their cigarette stamp inventory activity and stamp usage for the prior month. Stamping agents are required to file a report even if they had no stamping activity for the month.
There is no tax payment due with the TT-13 or TT-14.
There is a $250 late filing, or non-filing, penalty for reports received after the 20th of the month. A stamping agent permit may be revoked by the Virginia Department of Taxation if more than two monthly reports are not filed, or not timely filed, within one calendar year.
Forms are available on the Virginia Department of Taxation web site.
All stamping agents and Other Tobacco Products distributors selling Roll-Your-Own Tobacco are also required to file a monthly report, Form AG-1 or AG-2, with the Office of the Attorney General. Forms and additional information can be found on the Office of the Attorney General website.
Cigarette stamps maybe purchased from TAX by completing Form TT 2, Order for Virginia Cigarette Tax Stamps. Present the completed form with your payment to the Fiscal Office at 3600 West Broad Street, Richmond, or to our district office in Norfolk at 6340 Center Drive, Building 7, Suite 101. Stamps are also available for purchase from the Treasurer's Office of the following localities:
Stamping agents are eligible for a discount on the purchase price of cigarette stamps at the rate of 2 percent of the amount charged for the stamps. Stamps may also be purchased on credit provided the stamping agent has a bond on file with the Virginia Department of Taxation.
Stamping agents may also apply for a credit for the write off of a bad debt related to the sale of cigarettes. Only the cigarette taxes attributable to the debt being written off are eligible for this credit. To apply for the credit, file Form TT-12 and its Schedule A(PDF 208Kb). Once the credit is granted, it may be applied to the cost of future cigarette stamp purchases.
Please contact the Fiscal Office at 804-367-8465 if you need more information on stamp purchases.
Virginia law requires that stamping agents affix revenue stamps to all unstamped cigarettes within one business day of receipt of the cigarettes. All packs of cigarettes must be stamped prior to shipping them to either other wholesaler distributors or retail outlets. Consequently, the Virginia Department of Taxation inspectors should never find unstamped cigarette products on the shelves of retail establishments.
There are only three exceptions to the stamping requirement. Cigarette packs do not have to have the Virginia cigarette stamp affixed if:
Stamping agents are subject to a penalty of up to $250 per pack for each failure to properly affix the required stamps. If the amount of unstamped cigarettes exceeds 100 packs, the maximum penalty increases to $500 per pack. The Code of Virginia § 58.1-1013 imposes a penalty of $2,500 per pack where willful intent to defraud the Commonwealth of the tax exists. It shall be prima facie evidence of intent to defraud when the number of unstamped cigarettes is the greater of 30 packs, or 5% of the cigarette inventory in the place of business of such person or business. Notwithstanding these threshold limits, if the number of unstamped packs exceeds 500 packs, it shall be prima facie evidence of intent to defraud. Each pack not having proper stamps affixed is deemed a separate offense. The Virginia Department of Taxation may also revoke the stamping agent's permit for non-compliance with cigarette stamping requirements.
Virginia does not require cigarette retailers to have a license to sell cigarettes. However, even though stamping agents are required to affix the stamps to cigarettes prior to shipping to retail outlets, every cigarette retailer is responsible for inspecting their shipments upon receipt to ensure cigarette stamps have been properly affixed. Unstamped packs should be removed from inventory and set aside for return to the cigarette supplier. The Virginia Department of Taxation conducts regular random inspections of cigarette retailers throughout the Commonwealth. Any person who is not a stamping agent who sells, purchases, transports, receives or possesses less than 3,000 packs of unstamped cigarettes for the purpose of evading taxes is subject to a penalty not to exceed $500 per pack. Any person who is not a stamping agent who sells, purchases, transports, receives or possesses 3,000 packs or more of unstamped cigarettes for the purpose of evading taxes is subject to a penalty not to exceed $2,500 per pack. If a person who (i) has not been issued a permit to affix revenue stamps by TAX or (ii) is not a retail dealer who has lawfully purchased cigarettes from such permit holder has in his possession within the Commonwealth more than 30 packs of unstamped cigarettes, such possession is presumed to be for the purpose of evading taxes. Please refer to Tax Bulletin 08-13 for full details on cigarette tax penalties.
Consumers should be aware that all cigarette packs should have the Virginia stamp affixed regardless of where in Virginia the cigarettes were purchased. Typically, but not always, Virginia consumers come into possession of unstamped cigarettes through internet purchases. If you do purchase unstamped cigarettes, a Form TT-7(PDF 134Kb), Consumer Cigarette Tax Return, should be completed and submitted with your cigarette tax payment to the Virginia Department of Taxation. Like retailers, consumers are liable for cigarette taxes and penalties if they are in possession of unstamped cigarettes.
Virginia does not license cigarette manufacturers to produce or sell cigarette products in the Commonwealth. However, all manufacturers producing cigarettes in the Commonwealth, or shipping cigarettes into or within Virginia, must file a monthly report of such activities (Form TT-18(PDF 18Kb)). The manufacturer must identify all purchasers of cigarettes by name and address; and also state the quantities (in sticks) of cigarettes purchased by brand. This report is due on the tenth of each month following the month of purchases.
Failure to file the monthly report is a Class 2 misdemeanor. In addition, the Virginia Department of Taxation may also impose a civil penalty of up to $5,000 for each failure to file or refusal to provide the requested information.
Cigarette manufacturers selling cigarettes to consumers within Virginia, whether directly or through a distributor or similar intermediary, must either A) become a participating manufacturer (PM) and perform its financial obligations under the Master Settlement Agreement or, B) be a non-participating manufacturer (NPM) and place into a qualified escrow fund by April 15 of each year such amounts as direct under the Code of Virginia §3.1-336.2 (2).
Corporations manufacturing cigarettes in Virginia and exporting cigarettes to foreign countries may be eligible for the Cigarette Export Tax Credit. For more information on this credit, see the chapter on Tax Credits/ Cigarette Export Credit on the TAX website.
Taxpayers may appeal cigarette tax issues and assessments to the Virginia Department of Taxation using the administrative appeals process as established in Code of Virginia §58.1-1820. Please see the Virginia Taxpayers Bill of Rights, and Tax Bulletin 08-13, both available at the Virginia Department of Taxation's web site, for additional information.
Revenue generated by the cigarette tax, permit application fees and cigarette tax penalties is deposited into the Virginia Health Care Fund.
Except where noted, you may download these forms online from Department of Taxation website:
| TT-1(PDF 30 Kb) | Application for Permit to Purchase and Virginia Revenue Stamps |
| TT-1 A(PDF 27Kb) | Schedule A: TT-1 Personal Data Form |
| TT-2(PDF 167Kb) | Order for Virginia Cigarette Tax Stamps |
| TT-7(PDF 134Kb) | Consumer Cigarette Tax Return |
| TT-12(PDF 208Kb) | Application for Cigarette Tax Credit Certificate |
| TT-13(PDF 60Kb) | Monthly Report of Resident Cigarette Wholesaler |
| TT-14(PDF 35Kb) | Monthly Report of Non-resident Cigarette Wholesaler |
| TT-18(PDF 18Kb) | Monthly Report of Cigarette Manufacturers |
| Publication(PDF 576Kb) | Virginia Taxpayer Bill of Rights |
| Publication | Tax Bulletin 08-13 "Cigarette Tax Compliance Efforts" |
| Publication | Virginia Tobacco Directory |
| AG-1 | Stamping Agent's Report to OAG of NPM Cigarettes |
| AG-2 | Stamping Agent's Report to OAG of PM Cigarettes |
Tobacco Unit
Virginia Department of Taxation
P.O. Box 715
Richmond, VA 23218-0715
804-371-0730
Fiscal Office
Virginia Department of Taxation
804-367-8465
Office of the Attorney General
Tobacco Section
900 East Main Street
Richmond, Virginia 23219
804-225-3195
Last Updated 5/19/2009 14:33
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