W. Va. Code R. § 110-17-4

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-17-4 - Cigarette Tax-Paid Stamps and Taxing Other Tobacco Products

4.1. General - W. Va. Code § 11-17-1 et seq. authorizes the use of stamps to evidence payment of the excise tax on cigarettes. All stamps shall conform to the contract entered into between the State of West Virginia and the manufacturer of the stamps.

4.2. Form and Description of Hand Applied Cigarette Tax Stamps - The stamps shall measure approximately one-half inch by five-eighths inch in size. The design of the stamps shall be as follows: Across the top part of the stamp shall be the words "State of West Virginia"; in the center part of the stamp shall be an outline of the State of West Virginia; inside the outline of the map of West Virginia shall appear the numerals twenty (20) which will indicate that the tax has been paid on twenty (20) cigarettes or twenty-five (25) which will indicate that the tax has been paid on twenty-five (25) cigarettes; and on the lower part of the stamp shall appear the words "Cigarette Tax Stamp". The Commissioner may designate any other marks to be included in the design and layout of the stamps, and in the case of packaging not containing 20 or 25 cigarettes, the Tax Commissioner may prescribe any alternative designs that may be appropriate.

4.3. Form and Description of Cigarette Tax-paid Meter Impressions - The size of the meter impressions shall be approximately five-eighths inch by one and one-quarter inch, and rectangular in shape or design. The form of the meter impressions, made by a metering device, to be placed on the package of cigarettes, shall contain the words "West Virginia Tax-paid Cigarettes". In the center of the meter impression shall be the outline of the map of the State of West Virginia and on both sides of the outline of the map of West Virginia, shall appear numerals which will designate the meter which was used to make the impression. The Commissioner may designate any other marks to be included in the design and layout of the stamps and may prescribe any alternative designs that may be appropriate.

4.4. Form and Description of Cigarette Tax-paid Stamps Heat Applied by Machine - The stamps shall measure approximately one-half inch by one-half inch in size. The design of the heat applied stamps shall be as follows: Across the top part of the stamp shall be the words "State of West Virginia"; in the center part of the stamp shall be an outline of the map of the State of West Virginia; inside the outline of the map of West Virginia shall appear the numerals (20) twenty which shall indicate that the tax has been paid on twenty (20) cigarettes or (25) twenty-five, which shall indicate that the tax has been paid on twenty-five; and on the lower part of the stamp shall appear the words "Cigarette Tax Stamp". The Commissioner may designate any other marks to be included in the design and layout of the stamps, and in the case of packaging not containing 20 or 25 cigarettes, the Tax Commissioner may prescribe any alternative designs that may be appropriate.

4.5. Purchase of Cigarette Tax-paid Stamps - Stamps may be purchased only from the Tax Commissioner. The Tax commissioner shall sell stamps only upon receipt of the prescribed requisition form and, unless the purchaser has secured a Cigarette Tax Credit Purchase Bond, the proper remittance.

4.5.1. A wholesaler may obtain a continuous Cigarette Tax Credit Purchase Bond to allow the purchase of cigarette stamps on credit. The terms of credit shall be payment on the third purchase or within thirty days (whichever comes first) with no more than two requisitions on credit simultaneously. The total amount of tax due on the two requisitions shall be no more than one-half (1/2) the amount of the total bond. After approval of the bond by the Attorney General, an annual notice of renewal is the only requirement. Any surety issuing a bond shall be released and discharged from all liability on the bond after the expiration of sixty days from the date the surety filed, by certified mail, with the Tax Commissioner a written request to cancel the bond. This cancellation does not relieve, release or discharge the surety from liability already accrued, or which accrues before the expiration of the sixty day period. The bond shall be conditioned upon compliance with the provisions of W. Va. Code § 11-17-1 et seq., including the filing of the returns and payment of all applicable taxes.

4.5.2. The Tax Commissioner shall not ship any stamps prior to receipt of proper remittance if terms of credit are not followed.

4.5.3. W. Va. Code § 11-17-3 sets a tax at a specified rate for each twenty cigarettes or in like ratio on any part thereof. (For example, 17 cents for each 20 cigarettes.) The Tax commissioner shall allow a discount of four per cent for the purchase of stamps or meter impression as an allowance for affixing stamps and /or meter impression and prepaying the excise tax imposed on cigarettes.

4.5.4. Cigarette tax stamps are intended for the use of the authorized purchaser and are not transferable. If the wholesaler ceases business or stops stamping, the wholesaler shall return any unused stamps shall be returned to the Tax Commissioner for refund.

4.5.5. The Tax Commissioner shall redeem any unused or mutilated, but identifiable, stamps that any registered wholesaler may present for redemption. The Tax Commissioner may either issue a credit or a refund for stamps destroyed by fire or flood, on written verified requests made by the purchaser or his or her representative. The credit or refund shall be ninety-five per cent of the face value of the stamps, less any discounts allowed on the purchase of the stamps. Each request for redeeming or refunding shall be verified to the satisfaction of the Tax Commissioner.

4.5.6. In the event a retail dealer suffers loss of stamped cigarettes as a result of fire or flood, the retail dealer shall file a verified request for refund with the Tax Commissioner in order to obtain a refund. The verified request for refund shall contain the pertinent facts relating to the cause of the loss and the quantity of cigarette packages lost or packages damaged so as to be unsalable. A statement from an agent authorized by the Tax Commissioner may also be attached to the request for refund when the agent has declared certain packages of cigarettes to be unfit for use or sale. The amount of the refund shall be ninety-five per cent of the face value of the stamps, less any discounts allowed on the purchase of the stamps.

4.5.7. Stamps on cigarettes returned to the manufacturers shall be subject to either a credit or a refund upon the wholesaler filing an application and affidavit completed by the manufacturer that evidences the destruction of stamps or meter impressions. The amount of the refund shall be ninety-five per cent of the face value of the stamps, less any discounts allowed on the purchase of the stamps.

4.5.8. The Tax Commissioner shall not allow refunds to users of metering machines for loss of impressions.

4.6. Purchase of other tobacco products. - The excise tax is imposed on the sale or use of other tobacco products at the statutory rate as a specified percentage of the wholesale price of each article or item of the other tobacco product sold or used by a wholesaler or subjobber dealer. (For example, 7% of the wholesale price of each article or item of the other tobacco product.)

4.6.1. The excise tax imposed on other tobacco products shall be paid by the invoice method. This means the correct amount of tax shall be separately stated on the invoice when the products are sold by the wholesaler. The wholesaler shall pay the correct amount of excise tax on any other tobacco product that is sold in West Virginia, or removed from inventory for any purpose other than to return the other tobacco product to the manufacturer or be exported to another state.

4.6.2. Payment of the excise tax to the Tax Department shall be by cash, money order, bank draft, certified check, non-certified check or electronic funds transfer. If a non-certified check is returned unpaid by the bank, the payment is considered to not have been made; as a result, the Excise Tax remains due and owing.

4.6.3. Failure by a retail dealer or subjobber to provide evidence of the payment of excise tax on other tobacco products found in his or her place of business is considered to demonstrate that the other tobacco products are retained at that place of business in violation of W. Va. Code § 11-17-1 et seq. Other tobacco products retained in violation of W. Va. Code § 11-17-1 et seq. are contraband goods and may be seized by the Tax Commissioner, or by any peace officer of the State at the direction of the Tax Commissioner, without a warrant.

4.6.4. Upon the return of tobacco products other than cigarettes upon which the excise tax was paid, a wholesaler may file an application with an attached affidavit claiming either a credit or a refund of ninety-five percent of the tax that was paid on those other tobacco products, less any discount allowed on the original remittance of the Excise Tax.

4.6.5. Every taxpayer that pays the excise tax on tobacco products shall be allowed a discount of 4 percent on all tax due.

4.7. Effect of change of Excise Tax rate.

4.7.1. The effective date for imposition of the excise tax on other tobacco products is January 1, 2002.

4.7.2. All tobacco products on hand or in inventory on the effective date of a change in the applicable tax rate are considered to have been purchased or received on that effective date.

4.7.3. Every wholesaler, subjobber, subjobber dealer, retail dealer and vending machine operator that, on the effective date of any excise tax rate change has, on hand or in inventory, any tobacco products upon which any portion of the excise tax has been paid shall take a physical inventory on that date and file the required report with payment of any additional tax due under the increased tax rate. The required report and payment shall be filed within 30 days after the inventory was made. Imposition of the excise tax on tobacco products other than cigarettes is considered to be a change in the rate of tax for purposes of this provision.

4.7.4. Every taxpayer that pays excise tax on tobacco products shall be allowed a discount of 4 per cent on all tax due.

W. Va. Code R. § 110-17-4