South Carolina Code of Regulations › Chapter 117 - DEPARTMENT OF REVENUE › Article 24 - MISCELLANEOUS TAXES › Section 117-1600.2 - Stamps Required on Cigarettes

Current through Register Vol. 48, No. 6, June 28, 2024
Tax Stamps
(a) Each
			 distributor of cigarettes taxable under Article 5 of Chapter 21 of Title 12 who
			 first receives untaxed cigarettes for sale or distribution in South Carolina is
			 subject to the tax imposed in S.C. Code Section
			 12-21-620.
			 A licensed South Carolina distributor may not sell, distribute or ship
			 unstamped cigarettes to other South Carolina distributors located in South
			 Carolina. Payment of the tax is evidenced by a cigarette tax stamp affixed to
			 each individual package of cigarettes by distributors before being sold,
			 distributed, or shipped to another person; however, each individual package of
			 cigarettes must be stamped in accordance with Code Section
			 12-21-735
			 and within any time period that may be required under the law so as to not be
			 considered contraband.
A distributor may affix stamps only to packages of cigarettes
				obtained directly from a manufacturer or importer with a valid permit issued
				pursuant to
				26 U.S.C.
				Section 5713. If cigarettes are manufactured
				in this State and sold directly to consumers in this State by a manufacturer or
				importer, the cigarette packages must be stamped by a licensed distributor
				before being sold.
Every distributor who first receives within this State
				manufactured cigarettes on which the required South Carolina cigarette tax
				stamp has not been affixed shall purchase all necessary stamps directly from
				the Department of Revenue, or the person designated to receive payment on
				behalf of the Department, and all such distributors are prohibited from selling
				or otherwise disposing of South Carolina cigarette tax stamps to any other
				person, firm, corporation, club or association.
Orders for stamps shall be sent directly to the Department of
				Revenue, or the person distributing cigarette stamps on behalf of the
				Department, on order forms prescribed for such use and provided by the
				Department. The Department of Revenue may, at its discretion, allow or require
				orders for cigarette stamps to be submitted by paper form or
				electronically.
The Department also has the discretion to authorize the sale of
				cigarette tax stamps on thirty-day credit periods. If authorized by the
				Department, distributors may purchase cigarette tax stamps on thirty-day credit
				periods, provided a bond has been executed with a solvent surety company
				qualified to do business in South Carolina in an amount equal to 110% of the
				distributor's estimated tax liability for thirty days, but not less than
				$2,000. For credit purchases, payment for each calendar month's liability is
				due on or before the 20th day of the following
				month, including Sundays and holidays. For example, if a credit purchase is
				made during May, full payment for that credit purchase is due on or before the
				20th day of June.
In the event of default in the bonding or payment provisions,
				the Department has discretion to revoke a distributor's privilege to purchase
				stamps. Failure to timely pay will also subject a distributor to all applicable
				penalties, interest, and possible revocation of the distributor's
				license.
(b) Stamps may
			 only be affixed to packages of cigarettes that are listed on the South Carolina
			 Tobacco Directory published by the Office of the Attorney General pursuant to
			 Section
			 11-48-30.
(c) No distributor, whose place of business
			 is located without the State of South Carolina and who is engaged in the sale
			 of cigarettes, shall be permitted to purchase South Carolina cigarette tax
			 stamps unless and until such distributor agrees in writing to furnish the South
			 Carolina Department of Revenue any information it may deem necessary concerning
			 the amount of such sales and to whom such sales have been made, and to open for
			 inspection by the Department, its agents or employees any books, records,
			 papers, or memoranda, bearing upon the amount of tax payable to the Department
			 on account of such sales to South Carolina residents or merchants.
(d) No distributor who is engaged in the sale
			 of cigarettes shall be permitted to purchase South Carolina cigarette tax
			 stamps unless and until such distributor is current in filing any and all
			 reports and other documentation required by this regulation.
Exempt Stamps
A distributor that receives or possesses cigarettes intended
				for sale or distribution into or within South Carolina which are exempt from
				the tobacco stamp tax under Code Section
				12-21-100
				shall affix stamps to each individual package of cigarettes that indicate the
				package of cigarettes is exempt from tax. Orders for exempt stamps shall be
				sent directly to the Department of Revenue, or the person distributing
				cigarette stamps on behalf of the Department, on order forms prescribed for
				such use and provided by the Department.
Stamp Requirements
The cigarette tax stamps must:
(1) Be of a type that when affixed on each
			 individual package the stamps cannot be removed without being mutilated or
			 destroyed;
(2) Contain
			 tamper-evident features as determined by the Department of Revenue to make it
			 difficult to remove or tamper with the stamp as well as anti-counterfeit
			 features as determined by the Department of Revenue;
(3) Contain a unique serial number or other
			 mark which permits identification of the distributor that affixed the stamp to
			 the particular package of cigarettes; and
(4) Note whether the taxes prescribed by
			 Chapter 21 of Title 12 were paid or whether the package of cigarettes was
			 exempt from the taxes.