Tax Type
Cigarette Tax
Description
Monthly reports of wholesale dealers; Individually packaged cigarettes
Topic
Reports
Date Issued
08-04-1995
August 4, 1995
Re: Ruling Request: Cigarette Tax
Dear***************
This will reply to your letter requesting information on complying with the Virginia Cigarette tax in the purchase of individually packaged single cigarettes by ******** (the "Taxpayer"). I apologize for the delayed response.
FACTS
The Taxpayer is a wholesaler of cigarettes and is planning to package single cigarettes for sale to retailers. Two hundred of these individually packaged cigarettes will be placed in a box. The Taxpayer will sell the boxes of cigarettes to retailers along with point of purchase displays and vending machines. The retailer would place the cigarettes in the point-of-purchase displays and vending machines for sale to customers. The Taxpayer is requesting information on how cigarette revenue stamps should be affixed to the cigarettes.
RULING
Code of Virginia § 58.1-1003 provides that cigarette revenue stamps shall be affixed to each individual package, bag, box or can in order to indicate that the cigarette tax has been paid. Code of Virginia § 58.1-1006 states that the method of affixing stamps shall permit enforcement by inspection. To clarify the department's policy on selling individually packaged single cigarettes, the stamps must be affixed in a conspicuous place on the box containing the individually packaged cigarettes in such a manner as to be readily visible by inspection of the vending machines or other point of purchase devices. Further, the number of stamps equaling the cigarette tax on the enclosed cigarettes must be affixed on the box. For example, the cigarette tax on 200 individually packaged single cigarettes contained in a box is $.25 (200 cigarettes X .00125 tax rate). Therefore, the wholesaler must affix to each box 10 stamps used for packs of cigarettes with a count of 20 cigarettes or 8 stamps used for packs of cigarettes with a count of 25 cigarettes. In these instances, there are no requirements to affix the stamps to the individually packaged single cigarette.
Changes in the filing procedures will result from this type of cigarette packaging. Code of Virginia § 58.1-1008 provides for the monthly filing of cigarette reports by wholesale dealers. When filing the monthly wholesaler report, a separate schedule must be attached showing calculations based on the number of single packaged cigarettes contained in a box. The same monthly wholesale report format must be used when calculating the correct tax value of stamped or unstamped cigarettes and the value of cigarette revenue stamps. The report must also indicate the type of cigarette revenue stamp affixed to the boxes of cigarettes.
We trust that this information will provide guidance in complying with Virginia Cigarette Tax. If you have any questions about whether a particular point of purchase display or vending machine adequately displays the cigarette revenue stamps, please call our Customer Service Section at********to arrange a conference.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/8228N
Rulings of the Tax Commissioner