Opinion ID: 1118569
Heading Depth: 1
Heading Rank: 7

Heading: The Tax Burden

Text: The statutory scheme contemplates the tax incidence to be on the consumer. 68 O.S. 1991 § 302. [37] If the levy is paid by anyone else, the remittance is considered an advance payment  which is added to the price of the cigarettes and recovered from the ultimate consumer or user. 68 O.S. 1991 § 302. [38] The cigarette tax  initially paid by the wholesaler when stamps are bought from the Commission  is an advance payment. The wholesaler adds the tax to the price of the cigarettes supplied to the retailer. The impact of this pass-through system ultimately falls upon the consumer of stamped cigarettes. In making retail sales of cigarettes the retailer is required to show the amount of [pass-through] tax [that has been] paid as evidenced by appropriate stamps on each package of cigarettes sold and to collect the tax from the user or consumer. 68 O.S. 1991 § 302. [39] In short, by shifting the incidence of the levy onto the ultimate consumer, the assessment regime contemplates tax reimbursement to the wholesaler and retailer. The only instance where the tax burden cannot be passed on is when unstamped cigarettes in the licensed wholesaler's possession are lost, stolen or unaccounted for, in transit, storage or otherwise. 68 O.S. 1991 § 305(f). [40] Section 305(f), which raises a presumption of use or consumption within the state, makes the wholesaler liable for taxes due on these cigarettes.