Opinion ID: 201580
Heading Depth: 3
Heading Rank: 1

Heading: The Rhode Island Cigarette Tax Scheme

Text: The sale of cigarettes in Rhode Island is governed by a number of statutory requirements, including taxation provisions. See R.I. Gen. Laws §§ 44-20-1 to 44-20-55. The State's cigarette tax scheme imposes the following requirements: Every person engaged in the sale of cigarettes in Rhode Island must first obtain a license from the State Tax Administrator. R.I. Gen. Laws § 44-20-2. In addition to this licensing requirement, Rhode Island imposes an excise tax on cigarettes sold, distributed, held, or consumed within its borders. R.I. Gen. Laws § 44-20-12. The tax is collected through the sale of cigarette stamps, which must be affixed to all packages of cigarettes possessed within the State (with limited exceptions). R.I. Gen. Laws § 44-20-13, 44- 20-18, 44-20-30. State law also requires a retailer to add a sales tax to the sale price of the cigarettes. R.I. Gen. Laws § 44-18-19. Narragansett Indian Tribe v. Rhode Island, 296 F. Supp. 2d 153, 163 (D. R.I. 2003). The excise tax requires that distributors affix tax stamps in the proper denominations at the location where their license is issued. The stamps may be affixed to a distributor's cigarettes at any time before transferring the possession of the cigarettes. R.I. Gen. Laws § 44-20-28. When a dealer receives unstamped cigarettes, he or she must affix stamps within twenty-four hours after coming into possession of the cigarettes. R.I. Gen. Laws § 44-20-29. . . . State law makes it unlawful to sell or possess unstamped cigarettes, see R.I. Gen. Laws §§ 44-20-35, 44-20-36, and cigarettes not bearing stamps that are not exempt are contraband and subject to seizure by the State. R.I. Gen. Laws §§ 44-20-37, 44-20-38. Narragansett Indian Tribe, 296 F. Supp. 2d at 163. -5- Moreover, Rhode Island, with the assistance of the Federal government, has a system by which it collects sales taxes on cigarettes from consumers who reside in the State and purchase cigarettes from out-of-state dealers. See The Jenkins Act, 15 U.S.C. § 375-378 (requiring persons shipping or delivering cigarettes to a state that taxes the sale or use of cigarettes to comply with various reporting requirements identifying to the state the monthly cigarette shipments and the consumers who purchased them).