2016 North Dakota Century Code Title 57 Taxation Chapter 57-36 Tobacco Products Tax Law
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CHAPTER 57-36
TOBACCO PRODUCTS TAX LAW
57-36-01. Definitions.
As used in this chapter, unless the context or subject matter otherwise requires:
1. "Chewing tobacco" means any leaf tobacco that is intended to be placed in the mouth.
2. "Cigar" means any roll of tobacco wrapped in tobacco.
3. "Cigarette" means any roll for smoking made wholly or in part of tobacco or processed
tobacco and encased in any material except tobacco. "Cigarette" also means any
product of a cigarette-making machine.
4. "Cigarette-making machine" means a machine used for commercial purposes to
process tobacco into a roll or tube, formed or made from any material other than
tobacco, at a production rate of more than five rolls or tubes per minute.
5. "Consumer" means any person who has title to or possession of cigarettes, cigars,
pipe tobacco, or other tobacco products in storage, for use or other consumption in
this state.
6. "Dealer" includes any person other than a distributor who is engaged in the business
of selling cigarettes, cigarette papers, cigars, pipe tobacco, or other tobacco products,
or any product of a cigarette-making machine.
7. "Distributor" includes any person engaged in the business of producing or
manufacturing cigarettes, cigarette papers, cigars, pipe tobacco, or other tobacco
products, or importing into this state cigarettes, cigarette papers, cigars, pipe tobacco,
or other tobacco products, for the purpose of distribution and sale thereof to dealers
and retailers.
8. "Licensed dealer" means a dealer licensed under the provisions of this chapter.
9. "Licensed distributor" means a distributor licensed under the provisions of this chapter.
10. "Other tobacco products" means snuff and chewing tobacco.
11. "Person" means any individual, firm, fiduciary, partnership, corporation, limited liability
company, trust, or association however formed.
12. "Pipe tobacco" means any processed tobacco that, because of its appearance, type,
packaging, or labeling, is suitable for use and likely to be offered to, or purchased by,
consumers as tobacco to be smoked in a pipe.
13. "Sale" or "sell" applies to gifts, exchanges, and barter.
14. "Snuff" means any finely cut, ground, or powdered tobacco that is intended to be
placed in the mouth.
15. "Storage" means any keeping or retention of cigarettes, cigars, pipe tobacco, or other
tobacco products for use or consumption in this state.
16. "Use" means the exercise of any right or power incidental to the ownership or
possession of cigarettes, cigars, pipe tobacco, or other tobacco products.
57-36-02. Distributors and dealers to be licensed.
Each person engaged in the business of selling cigarettes, cigarette papers, snuff, cigars, or
tobacco in this state, including any distributor or dealer, must secure a license from the attorney
general before engaging or continuing to engage in business. A separate application and license
is required for each distributor at each outlet or place of business within the state, and a
separate dealer's license is required for each retail outlet when a person owns or controls more
than one place of business dealing in cigarettes, cigarette papers, snuff, cigars, or tobacco. No
retailer will be granted a distributor's license except a retailer who, in the usual course of
business, performed a distributor's or wholesaler's function for at least one year prior to filing the
license application. The application prescribed by the attorney general must include the name
and address of the applicant, the address and place of business, the type of business, and other
information as required for the proper administration of this chapter. Each application for a
wholesale or distributor's outlet license must be accompanied by a fee of twenty-five dollars and
a surety bond approved by the attorney general. Each application for a dealer's outlet license
must be accompanied by a fee of fifteen dollars. A reinstatement fee of fifty dollars is required in
addition to the annual license fee for each license renewal applied for after June thirtieth. The
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total reinstatement fee may not exceed five hundred dollars for any one licensee in any fiscal
year. A distributor's license does not authorize the holder to make retail sales. Each license
issued must be prominently displayed on the premises covered by the license.
57-36-03. License.
Each license issued under the provisions of this chapter is valid until the first day of July
subsequent to the date of issuance unless sooner revoked by the attorney general or unless the
business with respect to which such license was issued is transferred, in either of which cases
the holder of the license shall return it immediately to the attorney general. The license issued is
annual and runs from July first of each year to June thirtieth of the following year.
57-36-04. Revocation of license - Penalty.
The attorney general may revoke the license of any dealer or distributor for failure to comply
with any of the provisions of this chapter, or any of the rules or regulations prescribed by the tax
commissioner or the attorney general. When a license has been legally revoked, no license may
be issued again to the licensee for a period of one year thereafter. A person may not sell any
cigarettes, cigarette papers, snuff, cigars, or tobacco after that person's license has been
revoked as provided in this chapter.
57-36-05. Unlawful to sell without license.
A dealer or distributor may not sell cigarettes, cigarette papers, snuff, cigars, or tobacco in
this state at wholesale or at retail unless a license has been issued to that dealer or distributor
as prescribed by this chapter, and a person may not sell, offer for sale, or possess with the
intent to sell, any cigarettes, cigarette papers, snuff, cigars, or tobacco without such license.
57-36-05.1. Sale of imported cigarettes - When prohibited.
A dealer, distributor, or other person may not sell or distribute in this state any tobacco
product previously exported from the United States.
57-36-05.2. Sale of noncompliant tobacco products.
A dealer, distributor, or other person may not knowingly sell or distribute in this state any
tobacco product manufactured by a tobacco product manufacturer not in compliance with
subsection 2 of section 51-25-02.
57-36-05.3. Use of cigarette-making machines - When allowed.
A person may not maintain or operate in this state a cigarette-making machine unless that
person:
1. Has a valid federal permit as a tobacco product manufacturer issued under 26 U.S.C.
5713; or
2. Uses the machine exclusively for personal purposes. A cigarette-making machine may
be considered used exclusively for personal purposes only if the product resulting from
the operation of the machine is consumed by the individual who owns the machine or
by other persons whose consumption of the product is incidental to the owner's
personal use of the machine.
57-36-05.4. Certain cigarette-making machines - Registration requirements.
The following requirements apply to any cigarette-making machine:
1. A person may not maintain or operate a cigarette-making machine in this state unless
the machine has been registered with the attorney general in the form and manner as
prescribed by the attorney general. The person registering a machine under this
section shall certify under penalties of perjury that all statements in the registration and
in any attachments to the registration are true, accurate, and complete.
2. The registration expires three years from the date the machine is registered with the
attorney general and must be renewed as provided under subsection 1.
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The person registering the machine shall attach to the registration a copy of a valid
federal permit issued to the person under 26 U.S.C. 5713 or an affidavit indicating that
the machine will be used exclusively for personal purposes as described in section
57-36-05.3.
The registration required under this section immediately terminates if the federal
permit is declared invalid, surrendered, or revoked, or any statement in the affidavit
ceases to be true, correct, or complete.
57-36-06. Cigarettes - Amount of tax.
There are levied and assessed, and there must be collected and paid to the state tax
commissioner, upon all cigarettes sold in this state, the following excise taxes, payment thereof
to be made prior to the time of the sale and delivery thereof:
1. Class A. On cigarettes weighing not more than three pounds [1360.78 grams] per
thousand, five mills on each such cigarette.
2. Class B. On cigarettes weighing more than three pounds [1360.78 grams] per
thousand, five and one-half mills on each such cigarette.
57-36-06.1. Cigarette-making machines - Requirements.
A person operating or maintaining a cigarette-making machine who is a tobacco product
manufacturer under Public Law 112-141 [126 Stat. 914; 26 U.S.C. 5702 et seq.] shall:
1. Maintain on the machine, in good working order, a tamper-proof counting device that
records the number of all rolls or tubes processed on the machine.
2. Provide the tax commissioner access to the machine and its counting device at all
reasonable times for verification and other tax administration purposes.
3. Pay any taxes required under chapter 57-36.
4. Comply with the provisions of chapter 51-25 pertaining to all cigarettes produced by
the machine.
5. Comply with the ignition propensity requirements under chapter 18-13 with respect to
all cigarettes produced by the machine.
6. Use only federal tax-paid roll-your-own tobacco or tobacco exempt from federal tax
under 26 U.S.C. 5704(b).
57-36-07. Packaging - Presumption from possession.
Cigarettes must be packaged as follows:
1. All cigarettes sold or distributed in this state must be in packages containing twenty or
more cigarettes each.
2. Each package of cigarettes displayed, exhibited, stored, or possessed in original
cartons or containers upon the premises where consumer sales are made is
conclusively presumed to be for sale to consumers.
3. All packages of roll-your-own tobacco sold or distributed in this state must be in
packages containing at least 0.60 ounces [17 grams] of tobacco.
57-36-08. Stamps prepared by commissioner.
Repealed by S.L. 1991, ch. 665, § 10.
57-36-09. Records to be kept by distributors and reports made - Penalty.
Distributors shall keep records and make reports relating to purchases and sales of
cigarettes, cigarette papers, cigars, pipe tobacco, or other tobacco products made by them, and
must be punished for failure so to do, as follows:
1. Each distributor who shall dispose of cigarettes, cigarette papers, cigars, pipe tobacco,
or other tobacco products shall keep and preserve for one year all invoices of
cigarettes, cigarette papers, cigars, pipe tobacco, or other tobacco products purchased
by the distributor and shall permit the state tax commissioner, and assistants,
authorized agents, or representatives of the state tax commissioner, to inspect and
examine all taxable merchandise, invoices, receipts, books, papers, and memoranda
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as may be deemed necessary by the state tax commissioner, and assistants,
authorized agents, or representatives of the state tax commissioner in determining the
amount of the tax as may be yet due. Each person selling or otherwise disposing of
cigarettes, cigarette papers, cigars, pipe tobacco, or other tobacco products as a
distributor shall keep a record of all sales made within the state showing the name and
address of the purchaser and the date of sale. For sales of other tobacco products, the
records must also include the net weight in ounces, as listed by the manufacturer.
On or before the fifteenth day of each month, each licensed distributor, on such form
as the state tax commissioner shall prescribe, shall report to the tax commissioner all
purchases and sales of cigarettes, cigarette papers, cigars, pipe tobacco, or other
tobacco products made from or to any persons either within or without this state during
the preceding month. For sales of other tobacco products, each licensed distributor
shall also report to the tax commissioner the net weight in ounces, as listed by the
manufacturer. The tax levied by this chapter is payable monthly and must be remitted
to the tax commissioner by each licensed distributor on or before the fifteenth day of
the month following the monthly period.
Any person failing to file any prescribed form or return or to pay any tax within the time
required or permitted by this section is subject to a penalty of five percent of the
amount of tax due or five dollars, whichever is greater, plus interest of one percent of
the tax per month or fraction of a month of delay except the first month after the return
or the tax became due. The tax commissioner, if satisfied that the delay was
excusable, may waive all or any part of the penalty. The penalty must be paid to the
tax commissioner and disposed of in the same manner as are other receipts under this
chapter.
57-36-09.1. Warehouse - Record of deliveries and shipments.
Records of all deliveries of shipments of cigarettes and snuff from a licensed public
warehouse to persons within this state must be kept by the warehouse and be available to the
tax commissioner for inspection. They must show the name and address of the consignee, the
date, the quantity of cigarettes, snuff, cigars, or other tobacco products delivered, and such
other information as the tax commissioner may require. These records must be preserved for
one year from the date of delivery of the cigarettes, snuff, cigars, or other tobacco products.
57-36-09.2. Examination and correction of returns - Collection of taxes.
1. As soon as practicable after any return required by this chapter is filed, the tax
commissioner shall examine the return and correct it, if necessary, according to the tax
commissioner's best judgment and information. The return, with the tax
commissioner's corrections, if any, is prima facie correct and is prima facie evidence of
the correctness of the amount of tax due, as shown therein. Proof of any such
correction by the tax commissioner may be made at any hearing before the tax
commissioner or in any legal proceeding by a copy of the pertinent record of the tax
commissioner under the certificate of the custodian of the original official record. Such
a certified copy must, without further proof, be admitted into evidence before the tax
commissioner or in any legal proceeding and is prima facie proof of the correctness of
the amount of tax due, as shown therein. If the tax commissioner finds that any
amount of tax is due under this chapter from any person and is unpaid, the tax
commissioner shall notify such person of the deficiency, stating that the tax
commissioner proposes to assess the amount due with interest and penalties as
hereinafter provided. If a deficiency disclosed by the tax commissioner's examination
cannot be allocated by the tax commissioner to a particular month or months, the tax
commissioner shall notify such person of the deficiency, stating the tax commissioner's
intention to assess the amount due for a given period without allocating it to any
particular month or months, with the penalty provided in the case of other corrected
returns. If any person making any return dies or becomes incompetent at any time
before the tax commissioner issues notice that the tax commissioner proposes to
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assess an amount due, that notice must be issued to the administrator, executor, or
other legal representative, as such, of that person.
If, within fifteen days after mailing of notice of the proposed assessment, the person to
whom such notice is sent or that person's legal representative shall file a written
protest to said proposed assessment and request a hearing thereon, the tax
commissioner shall give notice to such person or legal representative of the time and
place fixed for the hearing. Such notice of hearing and the hearing, with any appeal
therefrom, must be governed by the provisions of chapter 28-32.
The tax commissioner may recover the amount of any tax due and unpaid, interest,
and any penalty in a civil action.
57-36-09.3. Corporate officer liability.
1. If a corporation holding a license issued under this chapter fails for any reason to file
the required returns or to pay the tax due, the president, vice president, secretary, or
treasurer, jointly or severally, having control or supervision of, or charged with the
responsibility for making such returns and payments, is personally liable for the failure.
The dissolution of a corporation does not discharge an officer's liability for a prior
failure of the corporation to make a return or remit the tax due. The sum due for such a
liability may be assessed and collected under the provisions of this chapter for the
assessment and collection of other liabilities.
2. If the corporate officers elect not to be personally liable for the failure to file the
required returns or to pay the tax due, the corporation must be required to make a
cash deposit or post with the tax commissioner a bond or undertaking executed by a
surety company authorized to do business in this state. The cash deposit, bond, or
undertaking provided for in this section must be in an amount equal to the estimated
annual tobacco products tax liability of the corporation.
57-36-09.4. Governor and manager liability.
1. If a limited liability company holding a license issued under this chapter fails for any
reason to file the required returns or to pay the taxes due under this chapter, the
governors, managers, or members of a member-controlled limited liability company,
jointly or severally, charged with the responsibility of supervising the preparation of the
returns and payments, are personally liable for the failure. The dissolution of a limited
liability company does not discharge a governor's, manager's, or member's liability for
a prior failure of the limited liability company to file a return or remit the tax due. The
taxes, penalty, and interest may be assessed and collected under the provisions of this
chapter.
2. If the governors, managers, or members elect not to be personally liable for the failure
to file the required returns or to pay the tax due, the limited liability company must be
required to make a cash deposit or post with the tax commissioner a bond or
undertaking executed by a surety company authorized to do business in this state. The
cash deposit, bond, or undertaking provided for in this section must be in an amount
equal to the estimated annual tobacco products tax liability of the limited liability
company.
57-36-09.5. Lien of tax - Collection - Action authorized.
1. When a taxpayer liable to pay a tax or penalty imposed refuses or neglects to pay the
tax, the amount, including any interest, penalty, or addition to the tax, together with the
costs that may accrue in addition to the tax, is a lien in favor of the state of North
Dakota upon all property and rights to property, whether real or personal, belonging to
the taxpayer, and in the case of property in which a deceased taxpayer held an
interest as joint tenant or otherwise with right of survivorship at the time of death, the
lien continues as a lien against the property in the hands of the survivors to the extent
of the deceased taxpayer's interest therein, which interest is determined by dividing
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the value of the entire property at the time of the taxpayer's death by the number of
joint tenants or persons interested therein.
The lien attaches at the time the tax becomes due and payable and continues until the
liability for the amount is satisfied. For the purposes of this section, the words "due"
and "due and payable" mean the first instant at which the tax becomes due.
Any mortgagee, purchaser, judgment creditor, or lien claimant acquiring any interest in,
or lien on, any property situated in the state, prior to the commissioner filing in the
central indexing system maintained by the secretary of state, a notice of the lien
provided for in this section takes free of, or has priority over, the lien.
The commissioner shall index in the central indexing system the following data:
a. The name of the taxpayer.
b. The name "State of North Dakota" as claimant.
c. The date and time the notice of lien was indexed.
d. The amount of the lien.
e. The internal revenue service taxpayer identification number or social security
number of the taxpayer.
The notice of lien is effective as of eight a.m. next day following the indexing of the
notice. Any notice of lien filed by the commissioner may be indexed in the central
indexing system without changing its original priority as to property in the county where
the lien was filed.
The commissioner is exempt from the payment of the filing fees as otherwise provided
by law for the indexing of the notice of lien or for its satisfaction.
Upon payment of a tax as to which the commissioner has indexed notice in the central
indexing system, the commissioner shall index a satisfaction of the lien in the central
indexing system.
Upon the request of the commissioner, the attorney general shall bring an action at law
or in equity, as the facts may justify, without bond to enforce payment of any taxes and
any penalties, or to foreclose the lien in the manner provided for mortgages on real or
personal property, and in the action the attorney general shall have the assistance of
the state's attorney of the county in which the action is pending.
The foregoing remedies of the state are cumulative and no action taken by the
commissioner or attorney general may be construed to be an election on the part of
the state or any of its officers to pursue any remedy hereunder to the exclusion of any
other remedy provided by law.
57-36-09.6. General partner in a limited liability limited partnership liability.
1. If a limited liability limited partnership taxable under this chapter fails for any reason to
file the required returns or to pay the tax due, the general partners, jointly or severally,
charged with the responsibility for the preparation of the returns and payment of the
tax are personally liable for the partnership's failure. The dissolution of a limited liability
limited partnership does not discharge a general partner's liability for a prior failure of
the partnership to file a return or remit the tax due. The taxes, penalty, and interest
may be assessed and collected pursuant to the provisions of this chapter.
2. If the general partners elect not to be personally liable for the failure to file the required
returns or to pay the tax due, the limited liability limited partnership must make a cash
deposit or post with the commissioner a bond or undertaking executed by a surety
company authorized to do business in this state. The cash deposit, bond, or
undertaking must be in an amount equal to the estimated annual tax liability of the
limited liability limited partnership.
57-36-10. Stamps may be purchased at discount.
Repealed by S.L. 1991, ch. 665, § 10.
57-36-11. Tax meter machines.
Repealed by S.L. 1991, ch. 665, § 10.
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57-36-11.1. Sales of untaxed cigarettes.
When a distributor makes an untaxed cigarette sale to an enrolled tribal member, the
distributor must obtain from the tribal member, on forms prescribed by the tax commissioner, the
following information:
1. Name of the tribal member.
2. Social security number of the tribal member.
3. Name of the tribe of the tribal member.
4. Tribal enrollment number of the tribal member.
5. Residential address of the tribal member.
6. Business address and business location of the retail sales of the tribal member.
7. Certification that the tribal member has been granted authority from the tribe to
conduct cigarette sales activity within the external boundaries of the reservation.
57-36-12. Distributors may not sell stamps.
Repealed by S.L. 1991, ch. 665, § 10.
57-36-13. Unlawful to transport unstamped cigarettes.
Repealed by S.L. 1991, ch. 665, § 10.
57-36-14. Procedure in case of seizure - Determination - Judgment.
The procedure in case of seizure of cigarettes, equipment, or any other product taxed
pursuant to this chapter must be as follows:
1. Upon the seizure of any cigarettes and within two days thereafter, the officer making
such seizure shall deliver an inventory of the property seized to the person from whom
such seizure was made, if known, and shall file a copy thereof with the tax
commissioner.
2. Within ten days after the date of the service of such inventory, the person from whom
the seizure was made, or any other person claiming an interest in the property seized,
may file a demand for a judicial determination of the question as to whether such
property was, or lawfully is, subject to seizure and forfeiture. Thereupon the tax
commissioner, within thirty days, shall institute an action in the district court of the
county where such seizure was made to determine the issue of forfeiture. Such action
must be brought in the name of the state of North Dakota and must be prosecuted by
the state's attorney, the tax commissioner, or the attorney general. The district court
shall hear such action as a court case and shall try and determine the issues of law
and fact involved.
3. In case a judgment of forfeiture is entered, the tax commissioner, unless the judgment
is stayed pending an appeal to the supreme court, as soon as convenient, shall
destroy the forfeited property.
4. In case a demand for a judicial determination is made and no action is commenced as
provided in this section, such property must be released by the tax commissioner and
redelivered to the person entitled thereto.
5. In the event that no demand for judicial determination is made, the seized property
must be deemed forfeited to the state by operation of law, and the tax commissioner
shall destroy the same.
6. In case of the seizure of an automobile, truck, boat, airplane, conveyance, vehicle, or
other means of transportation pursuant to the provisions of this chapter, the officer
making the seizure shall file an inventory, and upon a demand for a judicial
determination as provided in this section, the tax commissioner, within thirty days
thereafter, shall commence an action in the district court of the county where such
seizure was made to declare a forfeiture of such vehicle or other means of
transportation, and such action must be heard and determined as other forfeiture
actions instituted under this chapter.
7. Whenever the tax commissioner is satisfied that any person from whom property is
seized was acting in good faith and without intent to evade the revenue provisions of
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this chapter, the tax commissioner shall release the property seized without further
legal proceedings.
57-36-15. Hearings by tax commissioner.
Repealed by S.L. 1965, ch. 403, § 23.
57-36-16. Petition to tax commissioner for hearing or rehearing.
Repealed by S.L. 1965, ch. 403, § 23.
57-36-17. Hearing - Appeals from decision of the tax commissioner.
Except as provided in section 57-36-14, any person aggrieved because of any action or
decision of the tax commissioner under the provisions of this chapter has the right to a hearing
by the tax commissioner and has the right to appeal from the decision of the tax commissioner
on such hearing, all in accordance with the provisions of chapter 28-32.
57-36-18. Tax commissioner to administer chapter.
In administering this chapter, the tax commissioner and agents of the tax commissioner
shall exercise the following powers:
1. The tax commissioner and authorized agents of the tax commissioner shall enforce
the provisions of this chapter and have the powers of peace officers. They may arrest
violators of the provisions of this chapter and enter complaint before any court of
competent jurisdiction, and may seize without formal warrant, and use as evidence,
any forged, counterfeit, spurious, or altered license found in the possession of any
person in violation of this chapter.
2. The tax commissioner may prescribe rules and regulations not inconsistent with the
provisions of the chapter for its detailed and efficient administration.
57-36-19. State's attorney and other officers may be called.
In the enforcement of this chapter, the state tax commissioner may call to the tax
commissioner's assistance any state's attorney, or any peace officer, and may appoint such
additional assistants as may be required to carry out the provisions of this chapter.
57-36-20. Penalties for violation of chapter.
Repealed by S.L. 1975, ch. 106, § 673.
57-36-21. Unlawful to counterfeit stamps or insignia.
Repealed by S.L. 1975, ch. 106, § 673.
57-36-22. Separate additional tax on cigarettes - Collection - Penalty.
Repealed by S.L. 1965, ch. 403, § 23.
57-36-23. Separate and additional tax on the sale of cigarettes - Collection - Allocation
of revenue - Tax avoidance prohibited - Penalty.
Repealed by S.L. 1965, ch. 403, § 23.
57-36-24. Exemptions.
All gift cigarettes, snuff, cigars, and other tobacco products, not for resale, which are given
to the North Dakota veterans' home or the North Dakota state hospital for distribution to the
occupants thereof, are exempt from the excise taxes levied under this chapter.
57-36-25. Cigars and pipe tobacco - Excise tax on wholesale purchase price - Other
tobacco products - Excise tax on weight - Penalty - Reports - Collection - Allocation of
revenue.
1. There is hereby levied and assessed upon all cigars and pipe tobacco sold in this state
an excise tax at the rate of twenty-eight percent of the wholesale purchase price at
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which such cigars and pipe tobacco are purchased by distributors. For the purposes of
this section, the term "wholesale purchase price" shall mean the established price for
which a manufacturer sells cigars or pipe tobacco to a distributor exclusive of any
discount or other reduction.
There is levied and assessed upon all other tobacco products sold in this state an
excise tax at the following rates:
a. Upon each can or package of snuff, sixty cents per ounce and a proportionate tax
at the like rate on all fractional parts of an ounce.
b. On chewing tobacco, sixteen cents per ounce and a proportionate tax at the like
rate on all fractional parts of an ounce.
For purposes of this subsection, the tax on other tobacco products is computed based
on the net weight as listed by the manufacturer.
The proceeds of the taxes imposed under this section, together with such forms of
return and in accordance with such rules and regulations as the tax commissioner may
prescribe, shall be remitted to the tax commissioner by the distributor on a calendar
quarterly basis on or before the fifteenth day of the month following the quarterly
period for which paid. The tax commissioner shall, however, have authority to
prescribe monthly returns upon the request of the licensee distributor and such returns
accompanied with remittance shall be filed before the fifteenth day of the month
following the month for which the returns are filed.
Any person failing to file any prescribed form or return or to pay any tax within the time
required or permitted by this section is subject to a penalty of five percent of the
amount of tax due or five dollars, whichever is greater, plus interest of one percent of
the tax per month or fraction of a month of delay except the first month after the return
or the tax became due. The tax commissioner, if satisfied that the delay was
excusable, may waive all or any part of the penalty. The penalty must be paid to the
tax commissioner and disposed of in the same manner as are other receipts under this
chapter.
All moneys received by the tax commissioner under the provisions of this section shall
be transmitted to the state treasurer at the end of each month and deposited in the
state treasury to the credit of the general fund.
57-36-25.1. Deduction to reimburse licensed distributor for administrative expenses.
1. A licensed distributor who pays the tax due under this chapter within the time
limitations prescribed may deduct and retain one and one-half percent of the tax due
to reimburse the distributor for expenses incurred in keeping records, preparing and
filing returns, remitting the tax, and supplying information requested by the
commissioner.
2. The total deduction allowed by this section may not exceed one hundred dollars per
month for each licensed distributor.
57-36-26. Cigars, pipe tobacco, and other tobacco products - Excise tax payable by
dealers - Reports - Penalties - Collection - Allocation of revenue.
1. There is levied and assessed, upon all cigars and pipe tobacco purchased in another
state and brought into this state by a dealer for the purpose of sale at retail, an excise
tax at the rate of twenty-eight percent of the wholesale purchase price and, upon all
other tobacco products purchased in another state and brought into this state by a
dealer for the purpose of sale at retail, an excise tax at the rates indicated in section
57-36-25, at the time the products were brought into this state. For the purposes of this
section, the term "wholesale purchase price" means the established price for which a
manufacturer sells cigars or pipe tobacco to a distributor exclusive of any discount or
other reduction. However, the dealer may elect to report and remit the tax on the cost
price of the products to the dealer rather than on the wholesale purchase price. The
proceeds of the tax, together with the forms of return and in accordance with any rules
and regulations the tax commissioner may prescribe, must be remitted to the tax
commissioner by the dealer on a monthly basis on or before the fifteenth day of the
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month following the monthly period for which it is paid. The tax commissioner shall
have the authority to place any dealer on an annual remittance basis when in the
judgment of the tax commissioner the operations of the dealer merit that remittance
period. In addition, the tax commissioner shall have the authority to permit the
consolidation of the filing of a dealer's return when the dealer has more than one
location and thereby would be required to file more than one return.
If cigars, pipe tobacco, or other tobacco products have been subjected already to a tax
by any other state in respect to their sale in an amount less than the tax imposed by
this section, the provisions of this section apply, but at a rate measured by the
difference only between the rate fixed in this section and the rate by which the
previous tax upon the sale was computed. If the tax imposed in the other state is
twenty percent of the wholesale purchase price or more, then no tax is due on the
article. The provisions of this subsection apply only if the other state allows a tax credit
with respect to the excise tax on cigars, pipe tobacco, or other tobacco products
imposed by this state which is substantially similar in effect to the credit allowed by this
subsection.
Any person failing to file any prescribed forms of return or to pay any tax within the
time required by this section is subject to a penalty of five dollars or a sum equal to five
percent of the tax due, whichever is greater, plus one percent of the tax for each
month of delay or fraction thereof excepting the month within which the return was
required to be filed or the tax became due. The tax commissioner, if satisfied that the
delay was excusable, may waive all or any part of the penalty. The penalty must be
paid to the tax commissioner and disposed of in the same manner as are other
receipts under this chapter.
All moneys received by the tax commissioner under the provisions of this section must
be transmitted to the state treasurer at the end of each month and deposited in the
state treasury to the credit of the general fund.
57-36-27. Consumer's use tax - Cigarettes - Reports - Remittances.
1. A tax is hereby imposed upon the use or storage by consumers of cigarettes in this
state, and upon such consumers, at the following rates:
a. On cigarettes weighing not more than three pounds [1360.78 grams] per
thousand, five mills on each such cigarette.
b. On cigarettes weighing more than three pounds [1360.78 grams] per thousand,
five and one-half mills on each such cigarette.
2. This tax does not apply if the tax imposed by section 57-36-06 has been paid.
3. On or before the tenth day of each calendar quarter, every consumer who during the
preceding calendar quarter has acquired title or possession of cigarettes for use or
storage in this state, upon which cigarettes the tax imposed by section 57-36-06 has
not been paid, shall file a return with the tax commissioner showing the quantity of
cigarettes so acquired. The return must be made upon a form furnished and
prescribed by the tax commissioner and must contain such other information as the
tax commissioner may require. The return must be accompanied by a remittance for
the full unpaid tax liability shown by it.
4. As soon as practicable after any return is filed, the tax commissioner shall examine the
return and correct it, if necessary, according to the tax commissioner's best judgment
and information.
5. In case any consumer required to pay the tax levied by this section fails to file a return
or remit the tax as herein required, the tax commissioner has the authority to make an
assessment of tax against the consumer according to the commissioner's best
judgment and information.
6. All of the provisions of this chapter relating to corrections of returns, deficiency
assessments, protests thereto, hearings thereon, interest and penalties, and
collections of taxes are applicable to consumers under this section in like manner as
though set out in full herein.
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57-36-28. Consumer's use tax - Cigars, pipe tobacco, and other tobacco products Reports - Remittances.
1. A tax is imposed upon the use or storage by consumers of cigars, pipe tobacco, and
other tobacco products in this state, and upon those consumers, at the rates indicated
in section 57-36-25.
2. This tax does not apply if the tax imposed by section 57-36-25 or 57-36-26 has been
paid and it does not apply to cigars, pipe tobacco, or other tobacco products exempt
under section 57-36-24.
3. On or before the tenth day of each calendar quarter, every consumer who, during the
preceding calendar quarter, has acquired title to or possession of cigars, pipe tobacco,
or other tobacco products for use or storage in this state, upon which products the tax
imposed by either section 57-36-25 or 57-36-26 has not been paid, shall file a return
with the tax commissioner showing the quantity of such products so acquired. For
sales of other tobacco products, the return must also include the net weight in ounces,
as listed by the manufacturer. The return must be made upon a form furnished and
prescribed by the tax commissioner and must contain such other information as the
tax commissioner may require. The return must be accompanied by a remittance for
the full unpaid tax liability shown by it.
4. As soon as practicable after any return is filed, the tax commissioner shall examine the
return and correct it, if necessary, according to the tax commissioner's best judgment
and information.
5. If any consumer required to pay the tax levied by this section fails to file a return or
remit the tax as required, the tax commissioner shall make an assessment of tax
against the consumer according to the tax commissioner's best judgment and
information.
6. All of the provisions of this chapter relating to corrections of returns, deficiency
assessments, protests, hearings, interest and penalties, and collections of taxes apply
to consumers under this section.
57-36-29. Correction of errors.
1. If it appears that as a result of a mistake an amount of tax, penalty, or interest has
been paid which was not due under the provisions of this chapter, then such amount
becomes due under this chapter, and the amount must be credited or refunded to such
person or firm by the tax commissioner.
2. Whenever a distributor destroys cigarettes, cigars, pipe tobacco, or other tobacco
products accidentally, or intentionally, because of staleness or other unfitness for sale,
a credit or refund must be given to the wholesaler under the terms and conditions
prescribed by the tax commissioner.
57-36-30. Issuance of credit or refund.
Whenever by any provisions of this chapter a credit or refund is authorized, the tax
commissioner shall issue a credit applicable to future obligations under this chapter or certify the
amount of the refund, the reason therefor, and the name of the payee to the director of the office
of management and budget, who shall thereupon draw a warrant on the fund to which the
payment had been credited in the amount specified payable to the named payee.
57-36-31. Transfer and allocation of revenues - Appropriation.
1. All moneys received by the tax commissioner under the provisions of this chapter must
be transmitted to the state treasurer at the end of each month and deposited in the
state treasury to the credit of the general fund, except as hereinafter provided.
2. All moneys received from the levy and assessment of one and one-half mills on each
of the classes of cigarettes provided in this chapter are appropriated and must be
distributed on or before the thirtieth day of June and the thirty-first day of December of
each year on a per capita basis to the incorporated cities for such purposes as are
now or may be hereafter authorized by law, the allocation to be based upon the
Page No. 11
population of each incorporated city according to the last official federal census, or the
census taken in accordance with the provisions of chapter 40-02 in the case of a city
incorporated subsequent to the last federal census, and warrants must be drawn
payable to the treasurers of such cities.
57-36-32. Separate and additional tax on the sale of cigarettes - Collection - Allocation
of revenue - Tax avoidance prohibited.
There is hereby levied and assessed and there shall be collected by the state tax
commissioner and paid to the state treasurer, upon all cigarettes sold in this state, an additional
tax, separate and apart from all other taxes, of seventeen mills on each cigarette, to be
collected as existing taxes on cigarettes sold are, or hereafter may be, collected, by use of
appropriate stamps and under similar accounting procedures. No person, firm, corporation, or
limited liability company shall transport or bring or cause to be shipped into the state of North
Dakota any cigarettes as provided herein, other than for delivery to wholesalers in this state,
without first paying the tax thereon to the state tax commissioner. All of the moneys collected by
the state treasurer under this section shall be credited to the state general fund.
57-36-33. Penalties for violation of chapter.
Except as otherwise provided in this chapter:
1. Any person who violates any provision of this chapter is guilty of a class A
misdemeanor.
2. All cigarettes, cigarette papers, cigars, pipe tobacco, or other tobacco products in the
possession of the person who violates any provision of this chapter, or in the place of
business of the person, may be confiscated by the tax commissioner as provided
under section 57-36-14 and forfeited to the state. Any cigarette-making machine that is
maintained or operated in violation of sections 57-36-05.3, 57-36-05.4, or 57-36-06.1
must be confiscated by the tax commissioner and forfeited to the state in accordance
with chapter 29-31.1.
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