Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart B - General Fund Revenues › Article III - Cigarette and Beverage Taxes › Chapter 71 - GENERAL PROVISIONS › GENERAL › Section 71.4 - Definitions

Current through Register Vol. 54, No. 28, July 13, 2024
The following words and terms, when used in this
						  article, have the following meanings, unless the context clearly indicates
						  otherwise:
Act
-The Cigarette Tax Act, Article XII
						  of the TRC (72 P. S. §§
													8201-8297).
Basic cost of cigarettes
-The gross
						  price of cigarettes from the manufacturer to a dealer in the quantities stated
						  including freight and handling charges and the full face value of any tax which
						  may be required by law.
Cigarette stamping agent
-A person who
						  is licensed as such by the Department for the purpose of affixing cigarette tax
						  stamps to packages of cigarettes and transmitting the proper tax to the
						  Commonwealth.
Cigarettes
-Any roll for smoking made
						  wholly or in part of tobacco, irrespective of size or shape, and whether or not
						  the tobacco is flavored, adulterated or mixed with any other ingredient, the
						  wrapper or cover of which is made of paper or any other substance or material,
						  excepting tobacco. The term does not include cigars.
Cigarette vending machine
-A mechanical
						  or electrical device from which cigarettes are dispensed for a
						  consideration.
Code
-The Cigarette Sales and Licensing
						  Act, Article II-A of the FC (72 P. S. §§
													201-A-230-A).
Cost of doing business
-The dealer's
						  aggregate costs for its previous 12-month reporting period, as determined by
						  accounting principles regularly employed in the determination of costs for the
						  purpose of Federal income tax reporting, including direct and indirect costs,
						  such as product costs, freight charges, labor costs, costs of equipment, rental
						  and maintenance expenses,cigarette licenses, preopening expenses, management
						  fees, rents, depreciation, selling costs, maintenance expenses, interest
						  expenses, delivery costs, all types of license fees, all types of taxes,
						  insurance, advertising costs and any central and regional administrative
						  expenses.
Cost of the retailer
-The basic cost of
						  cigarettes to a retailer, which includes the cost of the wholesaler and
						  cigarette stamping agent, plus a markup to cover the retailer's cost of doing
						  business, which cost of doing business, in the absence of satisfactory proof of
						  a lesser cost, is presumed to be 6% of the basic cost of cigarettes to the
						  retailer.
Cost of the stamping agent
-The basic
						  cost of cigarettes to a cigarette stamping agent.
Cost of the wholesaler
-The basic cost
						  of cigarettes to a wholesaler, which includes the cost of the stamping agent,
						  plus a markup to cover the wholesaler's cost of doing business, which cost of
						  doing business, in the absence of satisfactory proof of a lesser cost, is
						  presumed to be 4% of the basic cost of cigarettes to the wholesaler.
Dealer
-A Pennsylvania-licensed
						  cigarette stamping agent, wholesaler or retailer.
Operating expenses
-A dealer's cost of
						  doing business decreased by the dealer's cost of goods sold.
Promotional sales plan
-The placement
						  upon the premises of a dealer of literature, premiums, displays, goods, wares,
						  merchandise or other material designed to stimulate, encourage or induce the
						  purchase of cigarettes by the consumer, or a marketing plan that involves a
						  price reduction or gift offered in conjunction with the sale of cigarettes that
						  causes a dealer to be in violation of the code or act.
Retailer
-
(i) A person who, in the usual course of
						business, purchases or receives cigarettes from any source whatsoever for the
						purpose of sale to the ultimate consumer.
(ii) A person who, in the usual course of
						business, owns, leases or otherwise operates one or more vending machines for
						the purpose of sale of cigarettes to the ultimate consumer.
(iii) A person who buys, sells, transfers or
						deals in cigarettes for profit and is not licensed as a cigarette stamping
						agent or wholesaler.
Sale
-A transfer for a consideration,
						  in exchange, as barter, as a gift, as an offer for sale or in distribution, in
						  any manner or by any means whatsoever.
Wholesaler
-
(i) A person who, in the usual course of
						business, purchases cigarettes from a cigarette stamping agent or other
						wholesaler and receives, stores, sells and distributes within this Commonwealth
						at least 75% of all the cigarettes purchased by him to retail dealers or
						wholesale dealers or any combination who shall buy the cigarettes from him for
						the purpose of resale to the ultimate consumer, if the person maintains an
						established place of business for the receiving, storage and distribution of
						cigarettes.
(ii) A person who is
						engaged in the business of distributing cigarettes through vending machines to
						the ultimate consumer by means of placing the cigarette vending machines, owned
						or leased by him, in various outlets within this Commonwealth and who pays to
						the owner or lessee of the premises a commission or rental for the use of the
						premises, if the vending machine operator operates at least ten vending
						machines. In addition, the vending machine operator shall meet the other
						requirements for licensing of wholesalers under this article, including
						maintaining an established place of business for the receiving, storage and
						distribution of cigarettes.
(iii) A
						person, including a franchisee, who owns and operates at least five retail
						outlets in this Commonwealth, having 100% common ownership, who purchases
						cigarettes from a cigarette stamping agency or another wholesaler for resale to
						the ultimate consumer. In addition, the person shall maintain complete and
						accurate records of all purchases and sales in his main office and also in the
						retail outlet.
The provisions of this §
														71.4 issued under section 6 of the
							 Fiscal Code (72 P. S. §
															6); section
							 1291 of the Tax Reform Code of 1971 (72 P. S. §
															8291); and sections 209-A, 214-A, 215-A and
							 227-A of the act of April 9, 1929 (P. L. 343, No. 176) (72 P. S.
							 §§
															209-A, 214-A, 215-A and
							 227-A).