South Carolina Code of Regulations › Chapter 117 - DEPARTMENT OF REVENUE › Article 24 - MISCELLANEOUS TAXES › Section 117-1600.5 - Stamping and Storage of Cigarettes in South Carolina by a Distributor

Current through Register Vol. 48, No. 6, June 28, 2024
(A) Stamping
			 Methods
Distributors generally stamp and store cigarettes in one of two
				methods - a "Stamp-to-Order" method and an "Advanced Stamping" method. These
				methods can be briefly described as follows:
Stamp-to-Order Method: Under this method, cigarettes are
				stamped only as orders are received. Once the cigarettes are stamped,
				distributors typically load the order onto a truck or place the order in a
				staging area for loading onto a truck either later that day or the next day.
				The stamp-to-order method is only permissible in South Carolina if the law does
				not require that cigarettes be stamped within a specified time period in order
				not to be considered contraband.
Advanced Stamping Method: Under this method, cigarettes are
				stamped before orders are received. If the law requires that cigarettes be
				stamped within a specified time period in order not to be considered
				contraband, then distributors must stamp all cigarettes within the time period
				established by law so as not to be considered contraband.
(B) Storage Requirements
The storage requirements established in this section only apply
				to warehouses located in South Carolina. Each warehouse in South Carolina
				which, in addition to selling South Carolina tax paid cigarettes, sells
				cigarettes in another state or cigarettes which are tax exempt in South
				Carolina, must obtain approval of its storage method from the Department in
				advance of implementation. South Carolina warehouses which only sell South
				Carolina tax paid cigarettes are not required to obtain approval of their
				storage methods.
Stamp-to-Order
If a distributor is permitted under this regulation and
				approved by the Department to use the stamp-to-order method, then the
				distributor is not required to maintain separate compartments or areas for
				South Carolina tax paid cigarettes, cigarettes to be sold in another state, and
				cigarettes to be sold tax exempt in South Carolina. However, the distributor's
				staging areas must be clearly marked and separated to avoid commingling of
				South Carolina tax paid cigarettes with cigarettes to be sold in another state
				or cigarettes to be sold tax exempt in South Carolina. The Department must
				approve the distributor's staging areas in advance of implementation. The
				Department will provide a copy of the written approval to the distributor to
				maintain for the distributor's records. If the distributor at a later date
				redesigns its warehouse or system whereby the Department-approved staging areas
				are changed, such change must be approved by the Department in advance of
				implementation.
Advanced Stamping
If a distributor is approved by the Department to use the
				advanced stamping method, then the distributor is required to maintain separate
				compartments or areas for cigarettes. Distributors who follow the advanced
				stamping method must, at a minimum, maintain one separate area for South
				Carolina tax paid cigarettes and one separate area for cigarettes to be sold in
				another state and/or cigarettes to be sold tax exempt in South Carolina.
				Alternatively, distributors may choose to maintain a separate area for each
				respective state and a separate area for cigarettes to be sold tax exempt in
				South Carolina.
These areas may be separated by creating a separate room(s),
				compartment(s), by using a bin(s), or other manner of storage clearly
				separating South Carolina tax paid cigarettes from cigarettes to be sold in
				another state and/or cigarettes to be sold tax exempt in South Carolina.
				Distributors must clearly mark the separate areas with signs warning employees
				regarding which cigarettes are South Carolina tax paid cigarettes, which
				cigarettes are to be sold in another state, and which cigarettes are to be sold
				tax exempt in South Carolina.
Any distributor operating a warehouse where cigarettes are
				stamped in advance must obtain approval from the Department for its separate
				room(s), compartment(s), bin(s), or other manner of storage in advance of
				implementation. The Department will provide a copy of the written approval to
				the distributor to maintain for the distributor's records. If the distributor
				at a later date redesigns its warehouse or system whereby the
				Department-approved separate room(s), compartment(s), bin(s), or other manner
				of storage is changed, such change must be approved by the Department in
				advance of implementation.
(C) Other Stamping and Storage Methods
There may be other stamping and storage methods than
				stamp-to-order and advanced stamping. All other stamping and storage methods
				must be approved by the Department on a case-by-case basis. Written approval
				for another stamping and storage method must be obtained from the Department in
				advance of implementation. The Department will provide forms for distributors
				to submit requests for approval of stamping and storage methods, and approval
				will be determined on a warehouse-by-warehouse basis. The Department will
				provide a copy of the written approval to the distributor to maintain for the
				distributor's records. If the distributor at a later date redesigns its
				warehouse or system whereby the Department-approved stamping and storage method
				is changed, such change must be approved by the Department in advance of
				implementation.
The provisions of this subsection do not apply to distributors
				who only sell South Carolina tax paid cigarettes and who do not sell cigarettes
				in another state or cigarettes which are tax exempt in South
				Carolina.