2013 New Jersey Revised Statutes
Title 54 - TAXATION
Section 54:40A-11 - Director to provide revenue stamps.

54:40A-11 Director to provide revenue stamps.

401. a. Director to provide revenue stamps. The taxes imposed and levied by this act shall be paid through the use of stamps, except as provided in section 205 of P.L.1948, c.65 (C.54:40A-7) in the case of a licensed consumer.

b.The director shall secure stamps of such designs and denominations as the director shall prescribe, suitable to be affixed to packages, and provide for the sale thereof to licensed distributors.

c. (1) The director may implement a program requiring the affixation of counterfeit resistant tax stamps pursuant to this subsection beginning not later than the first day of the twelfth month next following the director's notice of the implementation of the program to all licensed distributors and other licensees under section 202 of P.L.1948, c.65 (C.54:40A-4). On and after the date of implementation of the program, no metering of evidence of tax payment in lieu of stamps, as otherwise allowed pursuant to section 407 of P.L.1948, c.65 (C.54:40A-17), shall be authorized; provided, however, that in the event that full implementation of the provisions of this act, including but not limited to the procurement of equipment or machinery, if any, necessary to ensure the integrity of the encrypted tax stamp program and the continuity of cigarette tax collections by the State, is not achieved on or before the first day of the twelfth month next following the director's notice of implementation, the director shall notify the Legislature and provide a full and complete report explaining the reason or reasons for the delay, and metering of evidence of tax payment in lieu of stamps, as otherwise permitted pursuant to section 407 of P.L.1948, c.65 (C.54:40A-17) shall continue to be authorized for an additional period not to exceed six months, as determined by the director.

(2)Stamps shall be counterfeit-resistant and encrypted to identify, at a minimum (a) the name and address of the distributor affixing the stamp; (b) the date the stamp was affixed to the cigarette package; and (c) the denominated value of the stamp. The stamp shall be readable and traceable from the point of stamp production to the point of sale and shall be readable by a scanner or similar device that may be utilized by the director or licensed cigarette distributor, wholesalers and retailers.

(3)The stamp shall be produced in a secure manner and shall incorporate such encryption, security, and counterfeit-resistant features as the director may prescribe.

(4)Distributors or other parties approved by the director shall acquire either by lease, lease-to-own or purchase, equipment or machinery, including equipment to affix stamps and equipment to read or scan information from stamps, that is approved by the director and necessary to carry out the requirements set forth in this section.

(5)The encrypted data collected from stamps shall be provided by distributors and retained by the State in a secure data collection, management and decision support system.

d.Only licensed distributors shall affix and cancel stamps and no distributor shall affix or cancel any stamp except at the tax rate in effect on the date of such affixing or cancellation; except that on the effective date of a tax rate increase imposed under this act, licensed distributors and wholesale dealers shall take a physical inventory of cigarettes on hand at the close of business prior to the date of the tax increase imposed under this act and must pay any additional tax for all cigarettes bearing stamps at the rate in effect prior to the tax increase. The director shall prescribe the method of collecting the additional tax. The director shall not authorize any person to sell revenue stamps except the director's duly constituted agents and assistants.

e.On sales of revenue stamps the director shall allow, as compensation for the services and expenses of the distributor in affixing and handling of such stamps, a discount of 1.80% of the face amount of any sale of 1,000 stamps or more; provided, that the distributor has complied with all the provisions of this act; and, provided, further, however, that the director shall be empowered to adjust such discount to provide equivalent compensation with respect to the face value of each 1,000 stamps or more. No discount shall be allowed on any sale of less than 1,000 stamps and stamps shall not be sold in blocks of less than 100 stamps.

L.1948, c.65, s.401; amended 1956, c.10, s.2; 1960, c.158, s.2; 1961, c.28, s.2; 1962, c.75, s.2; 1963, c.45, s.2; 1966, c.105, s.2; 1968, c.51, s.2; 1972, c.24, s.2; 1982, c.40, s.2; 1985, c.261, s.3; 1985, c.341, s.3; 1987, c.37, s.2; 1990, c.39, s.16; (2003, c.115, s.2; 2006, c.37, s.2 Notes); 2008, c.98, s.1.