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138.146 Evidence of tax payments.
(1)
(2)
(3)
(4)
The tax imposed by KRS 138.130 to 138.205 shall be due when any licensed
wholesaler or unclassified acquirer takes possession within this state of
untax-paid cigarettes.
The tax shall be paid by the purchase of stamps by a resident wholesaler
within forty-eight (48) hours after the wholesaler receives the cigarettes. A
stamp shall be affixed to each package of an aggregate denomination not less
than the amount of the tax on the package. The affixed stamp shall be prima
facie evidence of payment of tax. Unless stamps have been previously affixed,
they shall be affixed by each resident wholesaler prior to the delivery of any
cigarettes to a retail location or any person in this state. The evidence of tax
payment shall be affixed to each individual package of cigarettes by a
nonresident wholesaler prior to the introduction or importation of the cigarettes
into the territorial limits of this state. The evidence of tax payment shall be
affixed by an unclassified acquirer within twenty-four (24) hours after the
cigarettes are received by the unclassified acquirer.
The department shall by regulation prescribe the form of cigarette tax
evidence, the method and manner of the sale and distribution of cigarette tax
evidence, and the method and manner that tax evidence shall be affixed to the
cigarettes. All cigarette tax evidence prescribed by the department shall be
designed and furnished in a fashion to permit identification of the person that
affixed the cigarette tax evidence to the particular package of cigarettes, by
means of numerical rolls or other mark on the cigarette tax evidence. The
department shall maintain for at least three (3) years information identifying the
person that affixed the cigarette tax evidence to each package of cigarettes.
This information shall not be kept confidential or exempt from disclosure to the
public through open records.
(a) Units of cigarette tax evidence shall be sold at their face value, but the
department shall allow as compensation to any licensed wholesaler an
amount of tax evidence equal to thirty cents ($0.30) face value for each
three dollars ($3) of tax evidence purchased at face value and attributable
to the tax assessed in KRS 138.140(1). No compensation shall be
allowed for tax evidence purchased at face value attributable to the tax
assessed in KRS 138.140(2) or (3).
(b) 1.
Notwithstanding the provisions of paragraph (a) of this subsection,
for purposes of offsetting the costs associated with paying the tax
imposed under KRS 138.140(2), the department shall allow a limited
amount of compensation in addition to the compensation provided in
paragraph (a) of this subsection for a restricted time to any licensed
wholesaler. The additional compensation shall be an amount of tax
evidence, attributable to the tax assessed in KRS 138.140(1), equal
to twelve cents ($0.12) face value for each three dollars ($3) of tax
evidence purchased at face value on or after June 1, 2005, and
before December 1, 2005. The additional compensation provided
shall sunset 12 midnight November 30, 2005.
2.
During the six (6) month period beginning on June 1, 2005, and
ending before December 1, 2005, no licensed wholesaler or
(5)
(6)
(7)
stamping agent shall receive the additional compensation provided
under subparagraph 1. of this subsection on the purchase of an
amount of stamps over one hundred fifty percent (150%) of the total
number of stamps purchased by the same licensed wholesaler or
stamping agent for the period beginning on December 1, 2004, and
ending before May 31, 2005.
(c) The department shall have the power to withhold compensation as
provided in paragraphs (a) and (b) of this subsection from any licensed
wholesaler for failure to abide by any provisions of KRS 138.130 to
138.205 or any regulations promulgated thereunder. Any refund or credit
for unused cigarette tax evidence shall be reduced by the amount allowed
as compensation at the time of purchase.
No tax evidence may be affixed, or used in any way, by any person other than
the person purchasing the evidence from the department. Tax evidence may
not be transferred or negotiated, and may not, by any scheme or device, be
given, bartered, sold, traded, or loaned to any other person. Unaffixed tax
evidence may be returned to the department for credit or refund for any reason
satisfactory to the department.
In the event any retailer shall receive into his possession cigarettes to which
evidence of Kentucky tax payment is not properly affixed, he shall within
twenty-four (24) hours notify the department of such fact. Such notice shall be
in writing, and shall give the name of the person from whom such cigarettes
were received, and the quantity of such cigarettes, and such written notice may
be given to any field agent of the department. The written notice may also be
directed to the commissioner of the Department of Revenue, Frankfort,
Kentucky. If such notice is given by means of the United States mail, it shall be
sent by certified mail. Any such cigarettes shall be retained by such retailer,
and not sold, for a period of fifteen (15) days after giving the notice provided in
this subsection. The retailer may, at his option, pay the tax due on any such
cigarettes according to rules and regulations to be prescribed by the
department, and proceed to sell the same after such payment.
Cigarettes stamped with the cigarette tax evidence of another state shall at no
time be commingled with cigarettes on which the Kentucky cigarette tax
evidence has been affixed, but any licensed wholesaler, licensed sub-jobber,
or licensed vending machine operator may hold cigarettes stamped with the tax
evidence of another state for any period of time, subsection (2) of this section
notwithstanding.
Effective:June 20, 2005
History: Amended 2005 Ky. Acts ch. 85, sec. 347, effective June 20, 2005;
ch. 168, sec. 83, effective June 1, 2005; and ch. 173, Part XXV, sec. 3, effective
March 20, 2005. -- Amended 2001 Ky. Acts ch. 150, sec. 11, effective January
1, 2002. -- Amended 1990 Ky. Acts ch. 216, sec. 1, effective July 13, 1990. -Amended 1982 Ky. Acts ch. 386, sec. 3, effective July 15, 1982. -- Created 1962
Ky. Acts ch. 92, sec. 5.
Legislative Research Commission Note (3/20/2005). This section was amended
by 2005 Ky. Acts chs. 85, 168, and 173, which do not appear to be in conflict
and have been codified together.
Legislative Research Commission Note (6/1/2005). 2005 Ky. Acts chs. 11, 85,
95, 97, 98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory
references to agencies and officers whose names have been changed in 2005
legislation confirming the reorganization of the executive branch. Such a
correction has been made in this section.
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