ARIZONA STATE SENATE
Phoenix, Arizona
luxury tax; revenue stamps;
cigarettes
Purpose
Allows third party
enforcement in the improper use of tax
stamps on “gray market cigarette” packages.
Adds filing requirements for cigarette distributors who affix tax
stamps.
Background
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. This bill strengthens the enforcement ability of the Department
of Revenue (DOR) and third parties to keep improperly stamped cigarettes out of
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
1. 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.
2. Allows the court to award actual damages, taxable costs and reasonable attorney fees to the prevailing party in the event of a civil suit.
3. Excludes duty free cigarettes and cigarettes brought into and resold within the customs territory from provisions requiring the lawful use of tax stamps.
4. 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.
5. Makes technical and conforming changes.
6. Provides for a general effective date.
Prepared by Senate Staff
January 18, 2001