11103483D
HOUSE BILL NO. 2038
Offered January 12, 2011
Prefiled January 11, 2011
A BILL to amend and reenact §58.1-3832 of the Code of
Virginia, relating to enforcement of the local cigarette tax.
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Patron-- Peace
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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 the guidelines and rules established by the Department 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 10 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 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 the guidelines
and rules established by the Department 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 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 shall
develop, maintain and publicize
the guidelines and rules related to cigarette
tax enforcement pursuant to this section. 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.
2. That on and after July 1, 2011, any local ordinance enacted
under the authority of §58.1-3832 of the Code of Virginia prior to July 1,
2011, shall be void and ineffective to the extent that such ordinance is
inconsistent with the provisions of this act .
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