103 KAR 41:160. Unstamped cigarettes

damaged in transit.

 

      RELATES TO: KRS 138.130, 138.140,

138.146, 138.155, 138.165, 138.195,138.990

      STATUTORY AUTHORITY: KRS 131.130(1),

138.140(7), 138.146(3)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

131.130(1) authorizes the Department of Revenue to promulgate regulations necessary

for the administration and enforcement of all tax laws in Kentucky. This administrative

regulation establishes requirements for the proper disposal of unstamped and

untax-paid cigarettes damaged in transit from manufacturers to Kentucky

licensed resident wholesalers and Kentucky licensed unclassified acquirers.

 

      Section 1. Definitions. (1) "Resident

wholesaler" is defined by KRS 138.130(9).

      (2) "Unclassified acquirer" is

defined by KRS 138.130(14).

 

      Section 2. (1) All damaged cigarettes not

accepted by the resident wholesaler or unclassified acquirer at time of

delivery shall be reported by the transporter to the Department of Revenue

within twenty-four (24) hours after the transporter returns to his or her place

of business.

      (2) Notification may be mailed or

hand-delivered in the form of:

      (a) A letter to the Excise Tax Section, 501

High Street, Frankfort, Kentucky 40620;

      (b) A facsimile transmission (fax)

addressed to the cigarette tax administrator at 502-564-3393; or

      (c) An electronic mail message addressed to

DOR.WebResponseExciseTax@ky.gov.

      (3) As part of its notification to the

department of damaged cigarettes, the transporter shall also confirm its

decision to either:

      (a) Return the cigarettes to the

manufacturer; or

      (b) Destroy the cigarettes in the

presence of a department representative.

 

      Section 3. (1) Damaged cigarettes

delivered to and accepted by the resident wholesaler or unclassified acquirer from

the transporter shall be included as receipts on the resident wholesaler’s or

unclassified acquirer’s monthly report.

      (2) The resident wholesaler or

unclassified acquirer shall select one (1) of the following methods for

disposal:

      (a) Stamp and sell the cigarettes;

      (b) Return the cigarettes to the

manufacturer; or

      (c) Destroy the cigarettes in the

presence of a department representative.

 

      Section 4. The resident wholesaler or

unclassified acquirer shall provide a copy of the credit documentation issued

by the manufacturer to the department to verify the quantity of damaged

cigarettes returned for each consignment or delivery returned to the

manufacturer.

 

      Section 5. (1) This administrative

regulation shall replace Revenue Circular 73C459.

      (2) Revenue Circular 73C459 is hereby rescinded

and shall be null, void, and unenforceable. (33 Ky.R. 2820; 3160; eff. 5-4-2007;

Tam eff. 5-20-09.)