luxury tax; revenue stamps;
cigarettes
Allows enforcement by a third party for the improper use of tax stamps on “gray market cigarette” packages by others. Creates filing requirements for cigarette distributors who affix tax stamps.
History:
Laws 1999, Chapter 290, prohibits tax stamping of “gray market cigarettes” i.e., cigarettes that do not conform to other labeling requirements of the federal government because they are not intended for sale in the United States. Currently DOR is the only entity that can enforce these labeling requirements in Arizona. This bill will strengthen the enforcement ability of DOR because it allows third parties to also go after distributors that improperly stamped cigarettes in Arizona. Improperly stamped cigarettes, or “gray market cigarettes,” do not carry the one-dollar embedded tobacco settlement assessment, which properly stamped tobacco products do. This language is based on a national legislative model, and 40 states have passed similar legislation.
According to DOR, there is no significant cost attached to the filing requirements.
Provisions
· Allows any person to bring a civil suit against a cigarette distributor that improperly affixes a tax stamp to cigarettes not intended for sale in the United States.
· Allows the court to award actual damages, taxable costs and reasonable attorney fees to the prevailing party in the event of a civil suit.
· Excludes duty free cigarettes and cigarettes brought into and resold within the customs territory from provisions requiring the lawful use of tax stamps.
· Requires cigarette distributors who affix tax stamps to file a form containing specific information on or before the 20th day of each month with DOR for all cigarettes imported during the prior month upon which a tax stamp has been affixed.
· Makes technical and conforming changes.
· Provides for a general effective date.