11101300D
SENATE BILL NO. 1085
Offered January 12, 2011
Prefiled January 11, 2011
A BILL to amend and reenact § 58.1-3832 of the Code of
Virginia, relating to uniform enforcement of local cigarette tax requirements.
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Patron-- Hanger
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Referred to Committee on Finance
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Be it enacted by the General Assembly of Virginia:
1. That § 58.1-3832 of the Code of Virginia is
amended and reenacted as follows:
§ 58.1-3832. Local ordinances to administer and enforce local
taxes on sale or use of cigarettes.
A. Any
county, city or town having a tax upon the sale or use of cigarettes may by
ordinance, provide for the
administration and enforcement of any such cigarette tax,
which ordinance shall require that such county, city, or town adhere to
guidelines and rules established by the Department of Taxation related to
cigarette tax enforcement. Such If such local ordinance provides for the use of a tax stamp or meter
impression as evidence of payment of the tax, it may also:
1. Provide for the registration of any distributor,
wholesaler, vendor, retailer or other person selling, storing or possessing
cigarettes within or transporting cigarettes within or into such taxing
jurisdiction for sale or use. Such registration may be conditioned upon the
filing of a bond with a surety company authorized to do business in Virginia as
surety, which bond shall not exceed one and one-half times the average monthly
liability of such taxpayer. The county, city or town may revoke registration if
such bond is impaired, but for no other reason. Any such distributor,
wholesaler, retailer or other person whose business and residence is outside
the taxing jurisdiction, who shall sell, store or possess in the taxing
jurisdiction therein any cigarettes shall, by virtue of such sale, storage or
possession submit himself to its legal jurisdiction and appoint as his attorney
for any service of lawful process such officer or person as may be designated
in the local ordinance for that purpose. A copy of any such process served on
the said officer or person shall be sent forthwith by registered mail to the
distributor, wholesaler or retailer.
2. Provide
for the use of a tax stamp or meter impression as evidence of payment of the
tax or other method or system of reporting payment and collection of such tax.
3. Provide that tobacco
products found in quantities of more than six cartons within the taxing
jurisdiction shall be conclusively presumed for sale or use within the
jurisdiction and may be seized and confiscated if:
a. They are in transit,
and are not accompanied by a bill of lading or other document indicating the
true name and address of the consignor or seller and of the consignee or
purchaser, and the brands and quantity of cigarettes so transported, or are in
transit and accompanied by a bill of lading or other document which is false or
fraudulent, in whole or in part; or
b. They are in transit
and are accompanied by a bill of lading or other document indicating:
(1) A consignee or
purchaser in another state or the District of Columbia who is not authorized by
the law of such other jurisdiction to receive or possess such tobacco products
on which the taxes imposed by such other jurisdiction have not been paid,
unless the tax of the state or District of destination has been paid and the
said products bear the tax stamps of that state or District; or
(2) A consignee or
purchaser in the Commonwealth of Virginia but outside the taxing jurisdiction
who does not possess a Virginia sales and use tax certificate, a Virginia
retail cigarette license and, where applicable, both a business license and
retail cigarette license issued by the local jurisdiction of destination; or
c. They are not in
transit and the tax has not been paid, nor have approved arrangements for
payment been made, provided that this subparagraph shall not apply to
cigarettes in the possession of distributors or public warehouses which have
filed notice and appropriate proof with the taxing jurisdiction that those
cigarettes are temporarily within the taxing jurisdiction and will be sent to
consignees or purchasers outside the jurisdiction in the normal course of
business.
4.
Provide that cigarettes and other property, other than motor vehicles, used in
the furtherance of any illegal evasion of the local
tax so may
be seized and confiscated and
may be disposed of by sale or other method deemed appropriate by the local
taxing authority. No credit from any sale or other disposition shall be allowed
toward any tax or penalties owed.
53. Provide that persons
violating any provision thereof shall be deemed guilty of a Class 1
misdemeanor, and require the payment of penalties for late payment not to
exceed ten percent per month, penalties for fraud or evasion of the tax not to
exceed fifty percent, and interest not to exceed three quarters of one percent
per month, upon any tax found to be overdue and unpaid. The
mere possession of untaxed cigarettes in quantities of not more than six
cartons shall not be a violation of any such ordinance.
64. Provide for the forfeiture
and sale of any property seized; provided, however, that proper notice of such
seizure shall be given to the known holders of property interests in such
property and shall include procedures for administrative appeal as well as
affirmative defenses which may be asserted by such holders which procedures
must be set forth in reasonable detail.
75. Provide that any
coin-operated vending machine, in which any cigarettes are found, stored or
possessed bearing a counterfeit or bogus cigarette tax stamp or impression or
any unstamped tobacco products, or any cigarettes upon which the tax has not
been paid, may be declared contraband property and shall be subject to
confiscation and sale as provided in subsection 6 subdivision 4. When any such
vending machine is found containing such cigarettes it shall be presumed that
such cigarettes were intended for distribution, sale or use therefrom. In lieu
of immediate seizure and confiscation of any vending machines used in an
illegal evasion of the tax it may be sealed by appropriate enforcement authorities
to prevent continued illegal sale or removal of any cigarettes, and may be left
unmoved until other civil and criminal penalties are imposed or waived. Notice
requirements shall be the same as if the machine had been seized. Such seal may
be removed and the machine declared eligible for operation only by authorized
enforcement authorities. Nothing in this section shall prevent seizure and
confiscation of a vending machine at any time after it is sealed.
86. Provide that any counterfeit
stamps or counterfeit impression devices may also be seized and confiscated.
97. Any
county, city or town may enact an ordinance which would delegate
its Delegate the locality's
administrative and enforcement authority under its cigarette tax ordinance to
one agency or authority pursuant to the provisions of § 15.2-1300. Such agency
or authority may promulgate rules and regulations governing the
display of cigarette stamps in vending machines, tax liens against property of
taxpayers hereunder, extend varying discount rates and establish different
classes of taxpayers or those required to collect and remit the tax,
requirements concerning keeping and production of records, administrative and
jeopardy assessment of tax where reasonably justified, required notice to
authorities of sale of taxpayer's business, audit requirements and authority,
and criteria for authority of distributors and others to possess untaxed
cigarettes and any other provisions consistent with the powers granted by this
section or necessarily implied therefrom shall be governed by and subject to guidelines and
rules established by the Department of Taxation related to cigarette tax
enforcement. Such ordinance may further provide that such
agency or authority created may issue a common revenue stamp, employ legal
counsel, bring appropriate court action, in its own name where necessary to
enforce payment of the local cigarette taxes or penalties owed any member
jurisdiction and provide cigarette tax agents, and the necessary enforcement
supplies and equipment needed to effectively enforce the cigarette tax
ordinance promulgated by each such county, city or town. Any cigarette tax
agents shall meet such requirements of training or experience as may be
promulgated from time to time by the enforcement authority when performing
their duties and shall be required to carry proper identification and may be
armed for their own protection and for the enforcement of such ordinance. Any
such agent shall have the power of arrest upon reasonable and probable cause
that a violation of any tobacco tax ordinance has been committed.
B. The
Department of Taxation shall develop, maintain,
and publish guidelines and rules referenced
in this section relating to cigarette tax
enforcement. Such guidelines and rules shall include, but not be
limited to, (i) uniform penalties for the violation of stamping requirements, and
(ii) a uniform system of appeals whereby a distributor, wholesaler, vendor,
retailer, or other person
selling, storing, or possessing
cigarettes within or transporting cigarettes within or into a taxing
jurisdiction for sale or use may seek review of any adverse action taken
against him by such taxing jurisdiction. The guidelines shall be
exempt from the Administrative Process Act (§ 2.2-4000 et seq.).
2. That on and after July 1, 2011, any local ordinance
enacted prior to the effective date of this act under the authority of §
58.1-3832 of the Code of Virginia shall be void and of no effect to the extent
that such ordinance is inconsistent with the requirements of this act.
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