RD342 - Study on Local Cigarette Tax Enforcement Policies


Executive Summary:
As directed by House Bill 2038 and Senate Bill 1085 (2011 Acts of Assembly, Chapters 366 and 293), the Department formed a working group to review the current policies on i) appeals of penalties related to the cigarette tax assessed on wholesalers and retailers; ii) the desirability of having a single stamp for state and local taxes; iii) methods of determining the validity of partially visible cigarette tax stamps; and iv) other related issues. The working group was asked to submit its report to the chairmen of the Senate and House Committees on Finance by December 1, 2011. This report sets forth the recommendations of the working group concerning current local cigarette tax enforcement policies.

The working group recommends that local governments ensure that notices of seizures include procedures for administrative appeals as well as the affirmative defenses that may be asserted. Additionally, the working group recommends that local governments that administratively establish their procedures for seizing cigarettes and appeals publish such procedures in a manner that will inform stamping agents, retailers, and other possessors of cigarettes. The working group also recommends that the General Assembly direct representatives of stamping agents, retailers, and local government to continue to work towards drafting best management practices that set forth recommendations regarding 1) types of stamps required, 2) monetary penalty structures, 3) procedures for seizing cigarettes, and 4) more uniform local appeals processes.