2023 Connecticut General Statutes › Title 12 - Taxation › Chapter 214 - Cigarette Taxes › Section 12-309. - Taxpayers to keep records; commissioner may examine. Assessment of tax deficiency. Penalty and interest for failure to pay tax when due. Lien against real estate for state tax. Foreclosure procedure.

(a) Each distributor and each dealer shall keep complete and accurate records of all cigarettes manufactured, produced, purchased and sold. Such records shall be of such kind and in such form as the Commissioner of Revenue Services may prescribe and shall be safely preserved for three years in such manner as to insure permanency and accessibility for inspection by the commissioner and his authorized agents. The commissioner and his authorized agents may examine the books, papers and records of any distributor or dealer in this state for the purpose of determining whether the tax imposed by this chapter has been fully paid, and may investigate and examine the stock of cigarettes in or upon any premises where such cigarettes are possessed, stored or sold for the purpose of determining whether the provisions of this chapter are being obeyed. If, after an examination of the invoices, books and records of a licensed distributor or dealer, or if, from any other information obtained by him or his authorized agents, the commissioner determines that the report of any licensed distributor or licensed dealer is incorrect, and that the licensed distributor or licensed dealer has not purchased sufficient stamps to cover his receipts and sales or other disposition of unstamped cigarettes, he shall thereupon assess the deficiency in tax. Such amount shall bear interest at the rate of one per cent per month or fraction thereof from the date when the original tax was due and payable. In any case where a licensed distributor or licensed dealer cannot produce evidence of sufficient stamp purchases to cover the receipt of unstamped cigarettes, it shall be presumed that such cigarettes were sold without having the proper stamps affixed. When it appears that any part of the deficiency for which a deficiency assessment is made is due to negligence or intentional disregard of the provisions of this chapter or regulations promulgated thereunder, there shall be imposed a penalty equal to ten per cent of the amount of such deficiency assessment, or fifty dollars, whichever is greater. When it appears that any part of the deficiency for which a deficiency assessment is made is due to fraud or intent to evade the provisions of this chapter or regulations promulgated thereunder, there shall be imposed a penalty equal to twenty-five per cent of the amount of such deficiency assessment. No taxpayer shall be subject to more than one penalty under this subsection in relation to the same tax period. The amount of any tax, penalty or interest due and unpaid under the provisions of this chapter may be collected under the provisions of section 12-35. The warrant therein provided for shall be signed by the commissioner or his authorized agent. The amount of any such tax, penalty and interest shall be a lien, from the last day of the month next preceding the due date of such tax until discharged by payment, against all real estate of the taxpayer within the state, and a certificate of such lien signed by the commissioner may be filed for record in the office of the clerk of any town in which such real estate is situated, provided no such lien shall be effective as against any bona fide purchaser or qualified encumbrancer of any interest in any such property. When any tax with respect to which a lien has been recorded under the provisions of this section has been satisfied, the commissioner, upon request of any interested party, shall issue a certificate discharging such lien, which certificate shall be recorded in the same office in which the lien is recorded. Any action for the foreclosure of such lien shall be brought by the Attorney General in the name of the state in the superior court for the judicial district in which the property subject to such lien is situated, or, if such property is located in two or more judicial districts, in the superior court for any one such judicial district, and the court may limit the time for redemption or order the sale of such property or make such other or further decree as it judges equitable.
(b) Except in the case of a wilfully false or fraudulent return with intent to evade the tax, no assessment of additional tax with respect to any return shall be made after the expiration of more than three years from the date of the filing of such return or from the original due date of such return, whichever is later. If no return has been filed as provided in this chapter, the commissioner may make such return at any time thereafter, according to the best information obtainable and according to the form prescribed. To the tax imposed upon the basis of such return, there shall be added an amount equal to ten per cent of such tax, or fifty dollars, whichever is greater. The tax shall bear interest at the rate of one per cent per month or fraction thereof from the due date of such tax to the date of payment. If prior to the expiration of the period prescribed in this section for the assessment of additional tax, a taxpayer has consented in writing that such period may be extended, the amount of such additional tax due may be determined at any time within such extended period. Any such extended period may be further extended by consent in writing before the expiration of such extended period.
(1949 Rev., S. 1990; 1967, P.A. 788, S. 13; P.A. 76-322, S. 8, 27; P.A. 77-614, S. 139, 610; P.A. 78-245, S. 1, 2; 78-303, S. 85, 136; P.A. 79-631, S. 43, 111; P.A. 80-307, S. 12, 31; P.A. 81-411, S. 20, 42; P.A. 82-172, S. 6, 14; P.A. 88-314, S. 20, 54; May Sp. Sess. P.A. 94-4, S. 55, 85; P.A. 95-26, S. 10, 52; P.A. 95-160, S. 64, 69.)
History: 1967 act added provisions for actions taken by commissioner when stamps bought are discovered to be insufficient to cover actual sales; P.A. 76-322 increased interest rate from 0.5% to 1% except if there was fraudulent intent where additional penalty interest remained at 0.5%; P.A. 77-614 and P.A. 78-303 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 78-245 increased penalty interest for fraudulent intent to 1% and added Subsec. (b) re three-year limit for assessment of additional tax; P.A. 79-631 made technical changes; P.A. 80-307 temporarily increased interest rates to 1.25% for taxes due on or after July 1, 1980, but not later than June 30, 1981; P.A. 81-411 continued interest on delinquent taxes under Subsec. (a) at 1.25% per month, effective July 1, 1981, and applicable to taxes becoming due on or after that date; P.A. 82-172 added provisions in Subsec. (a) re penalty of $50 if greater than 10% of the deficiency, with the 10% penalty continuing to be applicable if greater than $50, re waiver of penalties by the commissioner for failure to file report on time under certain conditions, re collection of tax, penalty or interest under Sec. 12-35, re creation of lien against real estate of taxpayer and discharge thereof and re foreclosure procedure related to such lien; P.A. 88-314 amended Subsec. (a) in respect to the penalty applicable to a determined insufficiency of stamps purchased by a distributor or dealer in the form of a restatement of the penalty when the deficiency is due to negligence and additionally, when the deficiency is due to fraud or intent to evade the tax and amended Subsec. (b) to clarify the applicable procedure when a return has not been filed and the commissioner must make a return according to the best information available, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; May Sp. Sess. P.A. 94-4 in Subsec. (b) reduced interest rate from 1.25% to 1% and provided that such interest may only be applied on the tax rather than on the tax and any penalty, effective July 1, 1995, and applicable to taxes due and owing on or after said date; P.A. 95-26 amended Subsec. (a) to lower interest rate from 1.25% to 1%, effective July 1, 1995, and applicable to taxes due and owing on or after July 1, 1995, whether or not those taxes first became due before said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section.