Notice Number:02-04
Tax Type:Cigarette and Tobacco Products
Brief Description:Legislated (2002 Session) tax increase notification (inventory requirements) under Senate Bill 39.
Approval Date:06/24/2002

NOTICE 02-04

Notice of Cigarette Tax Increase and Inventory Requirements

To comply with recent legislative changes, your company is required to take inventory of the cigarette stamps not attached to cigarette packs (Wholesalers Only) and stamped cigarette packs (Wholesalers, Retailers, and Vending Machine Operators) on hand at 12:01 a.m., July 1, 2002. On and after July 1, 2002, the tax rate will be $.70 on each pack of 20 cigarettes or fractional part thereof or $.875 on each pack of 25 cigarettes. Senate Bill 39.

Your company is required to pay a tax of $.46 on each 20-cigarette pack or $.575 on each 25-cigarette pack in stock as of 12:01 a.m., July 1, 2002. Payment of the additional tax on your inventory can be submitted in full or in three equal installments on July 30, September 30 and December 30, 2002. Penalty and interest will be assessed if the payment is not received in a timely manner.

Enclosed are the Tax Rate Change Inventory Report (Form CG-117) and three cigarette tax payment vouchers (CGVs). Complete Form CG-117 and return it and the corresponding voucher with your initial payment. Please keep a copy of each voucher you submit as well as a copy of the Tax Rate Change Inventory Report for your records. You do not need to send a copy of the inventory report with each equal installment payment.

In January, 2003, the tax rate increases to $.79 on each pack of 20 cigarettes or fractional part thereof or $.99 on each pack of 25 cigarettes. Prior to that time, you will receive another Form CG-117 and payment vouchers that will need to be completed and returned.

Wholesalers: You may need to update your Tax Credit Bond. With the tax increase, the amount of the bond should be at least $25,000.00. You may order against 85% of the bond, ($21,250.00).

Please be advised that violations of these statutory provisions may result in license suspension or revocation and/or fines. Thank you for your cooperation in this matter.


Date Composed: 06/24/2002 Date Modified: 06/24/2002