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TO AMEND SECTION 12-21-735, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE STAMP TAX ON CIGARETTES AND TOBACCO PRODUCTS, SO AS TO REQUIRE AND PROVIDE FOR THE PROPER AFFIXING OF STAMPS OR METERED IMPRESSIONS TO CIGARETTES, INCLUDING PROVISIONS FOR EXEMPT PACKAGES, UNIQUE SERIAL NUMBERING OF STAMPS, REVOCATION OF THE LICENSE OF A PERSON VIOLATING THESE PROVISIONS, LIMITATIONS ON THE RECEIPT AND SALE OF UNTAXED CIGARETTES AND ON THE NUMBER OF SALES BY A RETAILER, AND ALLOWING OTHER THAN MONTHLY RETURN AND PAYMENT OF THE TAX.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-21-735 of the 1976 Code is amended to read:
"Section 12-21-735. Each person or distributor of cigarettes taxable under this article, first receiving untaxed cigarettes for sale or distribution in this State, is subject to the tax imposed in Section 12-21-620. Each distributor required to pay the tax shall make a report to the department, in the form the department prescribes, of all cigarettes sold or disposed of in this State, and pay taxes due thereon not later than the twentieth day of the month next succeeding the month of the sale or disposition. However, any person or distributor making shipments of cigarettes to retail locations in and out of this State shall apply to the department for a license which enables them to purchase cigarettes free of tax, and report and pay tax as provided in this section on sales of cigarettes sold to locations in this State.
The department shall require bonds or statements of financial stability satisfactory to the department to cover possible losses resulting from failure to remit taxes due. When the return required by this section is timely filed and the taxes shown to be due are paid by the date specified in this section, the person or distributor may deduct three and one-half percent of the tax due. (A) The taxes imposed on cigarettes pursuant to this chapter must be paid by affixing stamps in the manner and at the time provided in this section. A wholesaler that receives cigarettes intended for sale or distribution within this State which are exempt from the taxes imposed pursuant to this chapter shall affix stamps that indicate the package of cigarettes is exempt from tax.
(B) The department shall cause to be prepared and distributed exclusively to manufacturers and wholesalers licensed pursuant to Section 12-21-660, tax stamps of such denominations and quantities as the department considers necessary for the payment of cigarette taxes imposed pursuant to this chapter. The department also shall cause to be prepared and distributed to licensed manufacturers and wholesalers stamps that indicate that a package of cigarettes is exempt from the taxes imposed pursuant to this chapter. A stamp on a package of cigarettes must note whether the taxes prescribed in this chapter were paid or whether the package of cigarettes was exempt from the taxes.
(C) Each roll or sheet of cigarette stamps must have a separate and unique serial number that is clearly visible at the point of sale. The department shall keep records of which licensed manufacturers or wholesalers purchased each roll or sheet of cigarette stamps identified by serial number. If the department permits licensed manufacturers or wholesalers to purchase partial rolls or sheets of cigarette stamps, cigarette stamps bearing the same serial number must not be sold to more than one person.
(D) Each licensed manufacturer or wholesaler authorized by the department in accordance with Section 12-21-50 to make a meter impression on a package of cigarettes instead of using a tax stamp must be assigned a unique meter impression number that may not be used by any other manufacturer or wholesaler and must be visible and easily identifiable at the point of sale. The department shall keep records of which licensed manufacturer and wholesaler is assigned each meter impression number.
(E)(1) Stamps must be affixed to each individual package of cigarettes by wholesalers before being sold, distributed, or shipped to another person. A wholesaler may apply stamps only to packages of cigarettes manufactured, imported, purchased, or obtained directly from a licensed manufacturer. Only licensed wholesalers may receive unstamped packages of cigarettes. Only licensed wholesalers may affix stamps to packages of cigarettes. If cigarettes are manufactured within the State and sold directly to consumers, they must be stamped by the manufacturer when and as sold.
(2) Stamps must be affixed by licensed manufacturers or wholesalers:
(a) in a denomination that equals at least the tax due on cigarettes in the package, if the cigarettes are subject to tax pursuant to this chapter;
(b) on the smallest package of cigarettes to be handled, sold, used, consumed, or distributed in this State; and
(c) to the bottom of each individual package of cigarettes in a manner prohibiting the removal of the stamp from the package without it being mutilated or destroyed.
(F) A jobber or retailer may obtain cigarettes only from a licensed wholesaler. A jobber or retailer may sell cigarettes only if they are stamped in accordance with the provisions in this chapter and obtained from a licensed wholesaler.
(G) Only a licensed manufacturer or wholesaler may ship or otherwise cause to be delivered unstamped packages of cigarettes in, into, or from this State. A person that ships or otherwise causes to be delivered unstamped packages of cigarettes into, within, or from this State shall ensure that the invoice of equivalent documentation and the bill of lading or freight bill for the shipment identifies the true name and address of the cosigner or seller, the true name and address of the cosignee or purchaser, and the quantity by brand style of the cigarettes so transported. This section does not impose requirements or liability upon a common or contract carrier.
(H) In addition to another penalty provided by law, upon determination that a cigarette manufacturer, wholesaler, jobber, or retailer has unlawfully sold or possessed unstamped or untaxed packages of cigarettes, the department shall revoke the license of the cigarette manufacturer, wholesaler, or jobber in the manner provided by Section 12-60-1310 through Section 12-60-1350 and impose fines on the retailers as appropriate.
(I) A retailer may not knowingly sell or distribute more than ten cartons of cigarettes to a person in a single transaction or in a series of transactions within a twenty-four hour period; except that a retailer that is also licensed as a wholesaler may make sales permitted to be made by a wholesaler pursuant to this chapter when acting in that capacity.
(J) Notwithstanding the provisions of Section 12-21-780, the department may require returns and payments of this tax for other than monthly periods."
SECTION 2. This act takes effect upon approval by the Governor.
This web page was last updated on Monday, June 22, 2009 at 3:07 P.M.