Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 255 - Cigarette Tax and Regulation of Delivery Sales of Alternative Nicotine Products or Vapor Products › Rule 701-255.1 - Permits Required

Current through Register Vol. 47, No. 3, July 24, 2024
Every person selling or distributing cigarettes or using or
				  consuming untaxed cigarettes within the state of Iowa must first obtain the
				  appropriate permit.
(1)
Distributor's permit.
Every person acting as a distributor as
				defined in Iowa Code section
				453A.1 must obtain a
				permit from the department. A distributor is any person who obtains unstamped
				cigarettes within or without this state by manufacture, production, import or
				by any means for the purpose of making the first intrastate sale or
				distribution or the first use or consumption in Iowa. Every distributor holding
				a distributor's permit will cause to be affixed, within or without Iowa, all
				cigarette tax stamps or meter impressions as set forth in rule
				701-82.8 (453A) and Iowa Code
				section
				453A.10.
				The distributor permit expires annually on June 30, and costs $100. A
				distributor must obtain a duplicate permit for each place of business owned or
				operated by the distributor from which distributor activities are carried on.
				Duplicate distributor permits may be obtained from the department at an annual
				cost of $5 for each duplicate permit. A distributor may act as a wholesaler
				without obtaining a wholesaler's permit, but a wholesaler's permit may be
				obtained upon meeting all of the requirements for the issuance of a
				wholesaler's permit. If a distributor performs any other function which
				requires a permit, a separate permit must be obtained. If a person is not
				performing the functions of a distributor, a permit will not be
				issued.
(2)
Wholesaler's
				permit.
Every person acting as a wholesaler as defined in Iowa Code
				section
				453A.1 must obtain a
				wholesaler's permit. A wholesaler is any person, other than a distributor or a
				distributing agent, who sells or distributes cigarettes within Iowa for resale.
				A "sale or distribution" of cigarettes connotes a transfer of cigarettes from
				one person or entity to another person or entity.
Union Oil Co. of
				California v. State,
2 Wash. 2d 436, 98 P, 2d 660 (1940);
State v. Nash Johnson and Sons' Farms Inc.,
263 N.C. 66, 138
				S.E. 2d 773 (1964). Therefore, an intraentity transfer is not a transaction
				which qualifies as a function of a wholesaler. The wholesaler permit expires
				annually on June 30, and costs $100 annually. A wholesaler must obtain a
				duplicate permit for each place of business owned or operated by the wholesaler
				from which wholesale activities are carried on. Duplicate wholesaler permits
				may be obtained from the department at an annual cost of $5 for each duplicate
				permit. If a person is not performing the functions of a wholesaler, a permit
				will not be issued.
The following example will illustrate the application of this
				  subrule:
The XYZ Grocery Chain has a warehouse in Des Moines where
				  stamped cigarettes are stored. The stamped cigarettes are purchased from a
				  permitted distributor. XYZ transfers the cigarettes to its retail outlets
				  across the state for the purpose of making retail sales, and makes no other
				  sales. The storage of stamped cigarettes and the retail sale of cigarettes are
				  not functions of a wholesaler, and XYZ would not be eligible for a wholesaler's
				  permit.
(3)
Cigarette vendor's permit.
Every person acting as a cigarette
				vendor as defined in Iowa Code section
				453A.1 must obtain a
				permit from the department. A cigarette vendor is any person who takes
				responsibility for furnishing, installing, servicing, operating or maintaining
				one or more vending machines for the purpose of selling cigarettes at retail,
				and does so by reason of ownership, agreement or contract.
A retailer who holds a retail permit is not required to get a
				  cigarette vendor's permit if the retail permittee is, in fact, the owner of the
				  cigarette vending machine(s) which is operated in the location described in the
				  retail permit. The cigarette vendor's permit expires annually on June 30, and
				  costs $100 annually. A cigarette vendor must have a duplicate permit for each
				  place of business from which cigarette vending machines are furnished,
				  installed or serviced. A duplicate permit can be obtained from the department
				  for an annual cost of $5. The duplicate permit applies to additional places of
				  business from which the cigarette vendor conducts operations and not to those
				  places of business where the cigarette vending machines are installed for
				  retail sales.
EXAMPLE: A cigarette vendor owns three warehouses from which
				  the vendor supplies cigarettes to 100 vending machines located at various
				  retail establishments. The total permit cost for the vendor would be $110 ($100
				  for a regular permit plus $10 for two duplicate permits at $5
				  each).
(4)
Railway
				retail permit.
A retail permit may be issued to a railway dining car
				company, railway sleeping car company, railroad or a railway company. A
				retailer's permit for railway cars is issued by the department for an annual
				cost of $25 and expires on June 30 of each year. A duplicate permit is required
				for each car in which cigarettes are stored for sale or sold and each duplicate
				permit is issued by the department at an annual cost of $2.
(5)
Manufacturer's permit.
Any manufacturer, as defined in Iowa Code section
				453A.1, may obtain a
				manufacturer's permit from the department. A manufacturer is any person who
				ships cigarettes into this state from outside the state. The permit is issued
				without cost and is valid until revoked or canceled. The permit allows the
				manufacturer to purchase tax stamps from the department and to affix such
				stamps to cigarettes outside of this state prior to their shipment into the
				state. A manufacturer is required to affix stamps to cigarettes prior to their
				shipment into this state unless the cigarettes are shipped to an Iowa permitted
				distributor or an Iowa permitted distributor's agent.
(6)
Distributing agent's
				permit.
Every person acting as a distributing agent as defined in Iowa
				Code section
				453A.1 must obtain a
				permit from the department. A distributing agent is any person in this state
				who acts as an agent of any manufacturer outside of the state by storing
				cigarettes received in interstate commerce from such manufacturer subject to
				distribution or delivery to distributors upon orders received from the
				manufacturer in interstate commerce and transmitted to such distributing agent
				for fulfillment from such storage place. The distributing agent's permit is
				issued by the department at an annual cost of $100 and expires on June 30 of
				each year. A separate permit at the $100 cost must be obtained for each place
				of business owned or operated within the state by the distributing agent. The
				permit authorizes the distributing agent to store unstamped cigarettes which
				are received in interstate commerce for distribution or delivery to
				distributors upon orders received from outside this state or to be sold outside
				this state. Stocks of cigarettes held for interstate and intrastate commerce
				must be kept separate.
(7)
Retailer's permit.
a.
In general.
Every person acting as a retailer, as defined in
				Iowa Code section
				453A.1, must obtain a
				permit. A retailer is any person who:
(1)
				Directly sells, distributes or offers for sale cigarettes for consumption,
				or
(2) Possesses cigarettes for
				direct sale for consumption.
Retail permits are issued by the following authorities at the
				  following prices:
1. Within
				unincorporated areas of a county, by the county board of supervisors at an
				annual cost of $50.
2. Within the
				city limits of a city of less than 15,000 population, by the city council, at
				an annual cost of $75.
3. Within
				the city limits of a city equal to or greater than 15,000 population, by the
				city council, at an annual cost of $100.
The retail permit expires on June 30 of each year. A renewal
				  sticker furnished by the department containing the appropriate year and number
				  may be issued in lieu of a new permit where the place of business of the retail
				  permit holder has remained the same. The retail permit is valid only for the
				  location described in the permit, and a retailer must obtain a separate permit
				  for each place of business owned or operated by the retailer. (See subrule
				  82.2(3))
The power to grant the retail permit is discretionary with
				  the city council or board of supervisors, and uniform, nondiscriminatory limits
				  may be placed on its issuance.
Bernstein v. City of
				  Marshalltown,
215 Iowa 1168, 248 N.W. 26 (1933);
Ford Hopkins
				  Co. v. City of Iowa City,
216 Iowa 1286, 248 N.W. 668 (1933); 1938
				  O.A.G. 708. The city or county must submit a copy of any retail permit issued
				  and the application for the permit to the department of public health within 30
				  days of issuance.