Virginia Administrative Code › Title 23 - TAXATION › Agency 10 - DEPARTMENT OF TAXATION › Chapter 370 - CIGARETTE TAX REGULATIONS › Section 23VAC10-370-110 - Sale of unstamped cigarettes by stamping agents

Current through Register Vol. 40, No. 24, July 15, 2024
A. Generally. A stamping agent may sell
				cigarettes in interstate commerce without affixing Virginia revenue stamps if
				such cigarettes are sold and shipped or delivered to persons outside this
				state. However, cigarettes without Virginia revenue stamps affixed may be sold
				in interstate commerce only if (i) such cigarettes are sold to persons engaged
				in business as dealers in cigarettes in other states, (ii) such cigarettes are
				purchased from the stamping agent exclusively for resale in other states, and
				(iii) such cigarettes are at the time of sale properly stamped with revenue
				stamps of other states.
B. Other
				sales of unstamped cigarettes by stamping agents. A stamping agent may also
				sell cigarettes without Virginia revenue stamps affixed thereto when (i) such
				cigarettes are sold to the United States or any of its instrumentalities for
				resale to or use or consumption by members of the armed services or to the
				Veterans Canteen Service of the Veterans Administration for resale to veterans
				of the United States armed services who are hospitalized or domiciled in
				hospitals or homes of the Veterans Administration or (ii) such cigarettes are
				sold and delivered to ships regularly engaged in foreign commerce or interstate
				coastwise shipping for consumption on the ships.
C. Records needed for cigarettes sold and
				shipped or delivered in interstate commerce to a person outside Virginia. A
				stamping agent who sells unstamped cigarettes that are delivered in interstate
				commerce must keep (i) adequate records that record the sale, (ii) a copy of
				the invoice for such purchase or other substantiating evidence, and (iii) the
				receipt from the common carrier, contract carrier, or post office showing
				shipment for delivery in another state. If delivered by the stamping agent to
				the purchaser at a point outside of Virginia, the stamping agent must maintain
				in addition to other records required by this chapter, a receipt that shows
				such delivery. A stamping agent who sells cigarettes stamped with revenue
				stamps of another state must keep records of each sale, the original purchase
				order, a copy of the invoice for such purchase, and a receipt from the
				purchaser showing that the purchase was made exclusively for resale in another
				state. In addition, records must be maintained that show the purchase and use
				of the other state's revenue stamps that the wholesale dealer used.
Exception. The stamping agent who stamps cigarettes with
				  out-of-state revenue stamps and has a place of business located partly within a
				  city in Virginia and partly without Virginia, or in a county which adjoins such
				  city, shall not be required to obtain a receipt from a purchaser from the other
				  state if the cigarette tax in the other state is higher than the tax imposed in
				  Virginia.
D. Cigarettes sold
				to the United States or instrumentality of the United States for resale to or
				use or consumption. Stamping agents may sell unstamped cigarettes to the United
				States or to any U.S. instrumentalities for resale to or for the use or
				consumption by members of the armed services of the United States. The stamping
				agent may also sell unstamped cigarettes to the Veterans Canteen Service of the
				Veterans Administration for resale to veterans of the armed services of the
				United States who are hospitalized or domiciled in hospitals or homes of the
				Veterans Administration.
Stamping agents must keep books and records regarding such
				  sales to the United States, U.S. instrumentalities, or Veterans Canteen Service
				  and maintain files of the original purchase orders or copies of invoices
				  showing such sales.
Example 1: Stamping agent A sells cigarettes to commissaries
				  or officers' clubs operated by the U.S. Army as instrumentalities of the United
				  States. Unstamped cigarettes may be sold to the commissaries or officers' clubs
				  operated as instrumentalities of the United States.
Example 2: Stamping agent B sells cigarettes to federal
				  reformatories for resale. The cigarettes must be stamped by the stamping agent
				  prior to sale. Cigarettes may be sold to the United States or its
				  instrumentalities without tax stamps affixed only if such cigarettes are sold
				  for use or consumption to members of the armed forces or veterans of the armed
				  forces hospitalized or domiciled in hospitals or homes of the Veterans
				  Administration.
Example 3: Stamping agent C sells cigarettes to the Post
				  Enlisted Men's Club, which is not organized or operated as an instrumentality
				  of the United States. The cigarettes must be stamped by the stamping agent
				  prior to sale since the Enlisted Men's Club is not considered an
				  instrumentality of the United States, and such sale of cigarettes is not
				  considered a sale made to the United States.
E. Cigarettes sold and delivered to ships
				regularly engaged in foreign commerce or interstate coastwise shipping for
				consumption on the ships. A stamping agent may sell unstamped cigarettes for
				delivery to ships regularly engaged in foreign commerce or coastwise shipping
				between points in Virginia and points outside Virginia. The unstamped
				cigarettes must be delivered by the stamping agent to the ship. The unstamped
				cigarettes must be for resale, use, or consumption upon such ship or in foreign
				commerce.
F. Conditions surrounding
				sale of unstamped cigarettes subjecting stamping agent to tax. If any wholesale
				dealer fails to comply with any of these provisions with respect to any sale of
				unstamped cigarettes, such stamping agent shall pay the tax imposed upon such
				cigarettes.
Statutory Authority: §
											58.1-203
					 of the Code of Virginia.