Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 256 - Tobacco Tax › Rule 701-256.1 - Licenses

Current through Register Vol. 47, No. 3, July 24, 2024
Before any person engages in the business of a distributor or
				  subjobber of tobacco products, that person must obtain a tobacco distributor's
				  or tobacco subjobber's license. If the person holds a valid cigarette permit of
				  any kind, the license will be issued without cost if all other requirements for
				  the license are met, but the license must still be obtained. A tobacco retailer
				  is required to obtain a retail cigarette/tobacco permit.
(1)
Distributor license.
Every person operating as a tobacco distributor, as defined in Iowa Code
				section
				453A.42, must obtain
				a tobacco distributor's license. A tobacco distributor is any person:
a. Engaging in selling tobacco products in
				this state who brings tobacco products or causes tobacco products to be brought
				into this state for the purpose of selling them in this state; or
b. Making, manufacturing, or fabricating
				tobacco products in this state for sale in this state; or
c. Selling tobacco products without this
				state who ships or transports tobacco products directly to retailers in this
				state to be sold by those retailers. In any distribution scheme whereby tobacco
				products are imported into this state for sale, there must be at least one
				distributor. The following examples shall illustrate the application of this
				rule:
EXAMPLE 1: Manufacturer, Inc. is in the business of
				  processing tobacco products in the state of North Carolina. Retailer, Inc. is
				  in the business of selling tobacco products at retail in the state of Iowa. If
				  Manufacturer, Inc. ships tobacco products directly to Retailer, Inc., f.o.b.
				  manufacturer's plant, both are performing the functions of a distributor;
				  Manufacturer, Inc. is selling tobacco products without this state and shipping
				  them directly to a retailer in this state, and Retailer, Inc. is causing
				  tobacco products to be brought into this state from without the state for the
				  purpose of sale. If either the out-of-state manufacturer or the in-state
				  retailer has a distributor's license, the other need not, but may, have a
				  distributor's license.
EXAMPLE 2: Manufacturer, Inc. is in the business of
				  processing tobacco products in the state of North Carolina. Retailer, Inc. is
				  in the business of selling tobacco products at retail in the state of Iowa. If
				  Manufacturer, Inc. ships tobacco products directly to Retailer, Inc., f.o.b.
				  Retailer's place of business, Manufacturer, Inc. is acting as a distributor and
				  Retailer, Inc. is not. Manufacturer, Inc. is selling tobacco products without
				  this state and shipping them directly to a retailer in this state. Retailer,
				  Inc. is not causing tobacco products to be brought into this state from without
				  the state.
The license is issued by the department at an annual cost of
				  $100 unless the distributor possesses any valid cigarette permit in which case
				  the license shall be issued without cost. A separate application and fee
				  payment, if applicable, must be submitted for each place of business from which
				  distributor activities are carried on. The license expires on June 30 of each
				  year, and there are no provisions for partial year license fee refunds if the
				  license is voluntarily surrendered. If a license is issued between January 1
				  and June 30 of any year, the license fee is one-half of the normal
				  fee.