CHAPTER 471
An Act to amend and reenact §§ 58.1-1013 and 58.1-1017 of
the Code of Virginia, relating to penalties for unstamped cigarettes.
[S 476]
Approved April 11, 2010
Be it enacted by the General Assembly of Virginia:
1. That §§ 58.1-1013 and 58.1-1017 of the Code of
Virginia are amended and reenacted as follows:
§58.1-1013. Penalty for failing to affix stamps; subsequent
violations of article.
Any person who has been issued a permit to affix revenue
stamps by the Department and fails to properly affix the required stamps to any
cigarettes pursuant to the provisions of this chapter shall be required to pay
as part of the tax imposed hereunder, a civil penalty of $250, if the
amount of unstamped cigarettes does not exceed 100 packs, or a penalty of $500,
if the amount of unstamped cigarettes exceeds 100 packs, to be assessed and
collected by the Department as other taxes are collected, of (i) $2.50 per
pack, up to $500, for the first violation by a legal entity within a 36-month
period; (ii) $5.00 per pack, up to $1,000, for the second violation by the
legal entity within a 36-month period; and (iii) $10 per pack, up to $50,000,
for the third and any subsequent violation by the legal entity within a
36-month period. Where willful intent exists to defraud the Commonwealth of
the tax levied under this chapter, such person shall be required to pay a civil
penalty of $2,500 $25 per pack, up to $250,000. It shall be
prima facie evidence of intent to defraud when the number of such unstamped
cigarettes exceeds either 30 packs or 5% five percent of the
cigarettes in the place of business of such person, whichever is greater.
Notwithstanding the immediately preceding threshold limits, if the number of
unstamped packs exceeds 500 packs, it shall be prima facie evidence of intent
to defraud.
Each pack of cigarettes not having proper stamps affixed
thereto as herein required shall be deemed a separate offense for purposes of
the monetary penalties imposed by this section. Any cigarettes in the place
of business of any person required by the provisions of this chapter to stamp
the same shall be prima facie evidence that they are intended for sale.
Any person who has been found guilty of violating any of
the provisions of this article and who, after being punished by fine, penalty,
assessment or imprisonment, is guilty of a second or subsequent violation of
this chapter shall, upon being found guilty of such second offense, have his or
its permit revoked by the Department, and no further permit shall be issued or
granted to such person for a period of one year from the date the permit has
been revoked. No civil penalty shall be imposed under this section for
any unstamped cigarettes if a civil penalty under §58.1-1017 has been paid for
such unstamped cigarettes.
§58.1-1017. Sale, purchase, possession, etc., of cigarettes
for purpose of evading tax; penalties.
A. Any person, except as otherwise provided by law, who
sells, purchases, transports, receives, or possesses unstamped cigarettes shall
be required to pay any tax owed pursuant to this chapter. In addition, such
person shall be required to pay a civil penalty of (i) $2.50 per pack, up to
$500, for the first violation by a legal entity within a 36-month period; (ii)
$5 per pack, up to $1,000, for the second violation by the legal entity within
a 36-month period; and (iii) $10 per pack, up to $50,000, for the third and any
subsequent violation by the legal entity within a 36-month period, to be
assessed and collected by the Department as other taxes are collected. In
addition, where willful intent exists to defraud the Commonwealth of the tax
levied under this chapter, such person shall be required to pay a civil penalty
of $25 per pack, up to $250,000.
B. It shall be unlawful for any person, except as
otherwise provided by law, to sell, purchase, transport, receive or possess
less than 3,000 packages of cigarettes unless the same have been stamped in the
manner required by law, for the purpose of evading the payment of the taxes on
such products. Any person violating the provisions of this subsection shall be
guilty of a Class 2 misdemeanor. In addition, the Department may impose a
penalty, to be assessed and collected by the Department as other taxes are
collected, not to exceed $500 per pack on any person for violation of this
subsection. Each pack of cigarettes sold, purchased, transported or possessed
shall be considered a separate offense.
B C. It shall be unlawful for any person, except
as otherwise provided by law, to sell, purchase, transport, receive or possess
3,000 or more packages of cigarettes unless the same have been stamped in the
manner required by law, for the purpose of evading the payment of the taxes on
such products. Any person violating the provisions of this subsection shall be
guilty of a Class 6 felony. In addition, the Department may impose a
penalty, to be assessed and collected by the Department as other taxes are
collected, not to exceed $2,500 per pack on any person for violation of this
subsection. Each pack of cigarettes sold, purchased, transported, or possessed
shall be considered a separate offense.
C D. If a person who (i) has not been issued a
permit to affix revenue stamps by the Department, as provided in §58.1-1011,
or (ii) is not a retail dealer who has lawfully purchased cigarettes from such
permit holder has in his possession within the Commonwealth more than 30
packages of unstamped cigarettes, such possession shall be presumed to be for
the purpose of evading the payment of the taxes due thereon. No civil
penalty shall be imposed under this section for any unstamped cigarettes if a
civil penalty under §58.1-1013 has been paid for such unstamped cigarettes.
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