2006 Code of Virginia § 58.1-1010 - Sale of unstamped cigarettes by wholesale dealers; penalty

58.1-1010. Sale of unstamped cigarettes by wholesale dealers; penalty.

A. A wholesale dealer who is duly qualified as a wholesale dealer stampingagent under 58.1-1011 may sell cigarettes without the Virginia revenuestamps affixed thereto, provided such cigarettes are sold and shipped ordelivered in interstate commerce to a person outside this Commonwealth. Suchwholesale dealer shall have on file a record of such sale, the originalpurchase order, a copy of the invoice therefor, and a receipt from a commoncarrier, contract carrier, or post office showing shipment for delivery insuch other state, or, if delivered by such wholesale dealer to the purchaserat a point outside of this Commonwealth, a receipt showing such delivery inaddition to the record, original purchase order and copy of the invoicerelating to such sale.

B. Such duly qualified wholesale dealer may sell cigarettes without theVirginia revenue stamps affixed thereto, provided:

1. Such cigarettes are sold to a person who is engaged in business as adealer in cigarettes in another state;

2. Such cigarettes are purchased exclusively for resale in the other state;and

3. Such cigarettes are at the time of sale properly stamped by the Virginiawholesale dealer with revenue stamps authorized and issued by the other statefor use upon such cigarettes. A wholesale dealer shall have on file a recordof each such sale, the original purchase order, a copy of the invoicetherefor, a receipt from the purchaser showing that such purchase was madeexclusively for resale in the other state, and a record showing the purchaseand use of such revenue stamps of the other state, and shall set forth in hisor its monthly report to the Department the quantity of cigarettes, measuredin packs, so set aside for sale outside of the Commonwealth. If uponexamination of invoices of any wholesale dealer, such dealer is unable tofurnish evidence to the Department of sufficient stamp purchases from suchother state to cover unstamped cigarettes set aside for sale in such otherstate, the prima facie presumption shall arise that such cigarettes were soldwithout the proper stamps affixed thereto in violation of 58.1-1003.

C. Cigarettes may be sold by duly qualified wholesale dealers, withoutrevenue stamps affixed thereto, when sold to the United States or to anyinstrumentality thereof for resale to or for the use or consumption bymembers of the armed services of the United States, or when sold to theVeterans Canteen Service of the Veterans Administration for resale toveterans of the armed services of the United States who are hospitalized ordomiciled in hospitals and homes of the Veterans Administration, provided thebooks and records, including original purchase orders and copies of invoicesshowing such sales, are kept on file and shall set forth in his or itsmonthly report to the Department the quantity of cigarettes, measured inpacks, so sold.

D. Cigarettes may be sold by duly qualified wholesale dealers, withoutrevenue stamps affixed thereto, when sold and delivered to ships regularlyengaged in foreign commerce or coastwise shipping between points in thisCommonwealth and points outside of this Commonwealth for resale to or for useor consumption upon such ship or in foreign commerce.

E. The Department is authorized to adopt rules and regulations with respectto the enforcement of the provisions of this section to prevent any evasionof the tax herein imposed.

A failure to comply with any provision of this section with respect to anysale of unstamped cigarettes shall subject the wholesale dealer to thepayment of the tax thereon imposed by this chapter. The Department may imposea penalty, to be assessed and collected by the Department as other taxes arecollected, of up to $500 per pack of cigarettes on any stamping agent itfinds not in compliance with any provision of this section with respect tothe sale of unstamped cigarettes. The Department may also suspend thestamping permit of such stamping agent until the tax and penalties have beenpaid to the Department. Any person who violates any of the provisions of thissection shall be guilty of a Class 2 misdemeanor.

(Code 1950, 58-757.9; 1960, c. 392, 9; 1962, c. 473; 1984, c. 675; 2004,c. 1029; 2005, c. 28.)