Chapter 5703-15 Cigarette Tax

5703-15-02 Notice relative to license revocation proceeding.

Whenever the Tax Commissioner finds that a wholesale or retail dealer is advertising, offering to sell, or selling cigarettes at a price in violation of the provisions of the Unfair Cigarette Sales Act, Revised Code 1333.11 , et seq., a written notice will be sent to such dealer by certified mail charging him with such violation and advising him that thirty days from the date of receipt of such notice an order will be issued by the Commissioner suspending or revoking his wholesale or retail cigarette dealer's license unless, within said thirty day period, a hearing is requested in accordance with the provisions of Revised Code 119.07 .

If a hearing is requested, the Commissioner will set a date, time and place for same in accordance with the provisions of Revised Code 119.07 , at which time the dealer may appear in person or be represented by his attorney or such other person as he may designate, to present his position, arguments, or contentions relative to said charge.

(former TX-21-02); Eff 7-16-64
Rule promulgated under: RC 5703.14

5703-15-03 Use of imprinting meter devices or stamp applying machines or other devices.

Any imprinting meter device, any machine designed to affix heat applied decalcomania stamps, or any other device, as approved by tax commissioner may be used in lieu of and application of heat applied decalcomania stamps to evidence payment of the taxes levied in sections 5743.02 , 5743.023 , and 5743.024 of the Revised Code.

The commissioner may prescribe which one of the above stated types of equipment may be used by any wholesale cigarette dealer.

Authority to use such equipment in lieu of hand application of heat applied decalcomania stamps to evidence payment of tax may be obtained by any wholesale cigarette dealer upon application therefor in writing.

In the event any dealer authorized to use an approved imprinting meter device, machine designed to affix heat applied decalcomania stamps, or other device fails to maintain same in such workable condition as to produce completely legible evidence of tax payment on all packages of cigarettes, the authority to use such device will be immediately suspended or revoked upon the basis of any evidence of such failure.

Eff. 5-13-65; 1-20-91; 9-17-04
Rule promulgated under: RC 5703.14
Rule authorized by: RC 5703.05
Rule amplifies: RC 5743.04
R.C. 119.032 review dates: Exempt

5703-15-04 Sales of stamps and meter impressions on credit.

(A) Cigarette tax stamps, meter impressions, or other means of identification, as authorized by the tax commissioner, may be sold to a licensed wholesale cigarette dealer on thirty-day credit periods upon written application, together with a bond in the amount of the aggregate net tax value of purchases to be made during such credit periods.

(1) The surety on any bond may cancel such bond by filing a sixty-day written notice thereof with both the tax commissioner and the treasurer of state, in which event the liability of the surety shall terminate upon the expiration of said sixty-day period, except as to such liability of the principal as may have accrued prior to the expiration of said period.

(2) All bonds shall remain in full force and effect until cancelled in the manner provided herein.

(B) The net tax value of stamps or meter impressions sold on credit shall be paid to the treasurer of state within thirty days from the date of the invoice therefor and in no event shall the aggregate net tax value of all such sales during any thirty-day credit period exceed the penal amount of the bond furnished for this purpose.

(C) The failure of any person to remit to the treasurer of state payment of the net tax value of stamps, meter impressions, or other means of identification, purchased on credit, within thirty days from the date of the invoice therefor will constitute a sufficient basis for suspension or revocation of the authority issued to that person to make such purchases.

Eff 8-1-94; 9-17-04
Rule promulgated under: RC 5703.14
Rule authorized by: RC 5703.05
Rule amplifies: RC 5743.03
R.C. 119.032 review dates: Exempt

5703-15-05 Discount on sales of tax stamps and meter impressions.

The discount on sales of cigarette tax stamps and meter impressions to licensed wholesale dealers shall be one and eight-tenths per cent of the tax value thereof, irrespective of the amount of such sales.

Eff 1-1-72; 10-18-82; 10-25-87; 5-1-92; 12-14-01 (Emer.); 3-13-02; 3-21-02
Rule promulgated under: RC 5703.14
Rule authorized by: RC 5703.05
Rule amplifies: RC 5743.05
R.C. 119.032 review dates:

5703-15-06 Denial of discount in stamp purchases.

In addition to the power to revoke any cigarette dealer's license the Department of Taxation may, by journal entry certified to the Treasurer of State, after ten days' notice to any licensed wholesale cigarette dealer, deny such dealer the right to any discount in the further purchase of cigarette tax stamps or impressions for such period of time as the Department of Taxation may determine in each case, under the following circumstances:

(A) Upon finding that any licensed wholesale cigarette dealer has violated any provision of the Cigarette Tax law of Ohio or any rule of the Department of Taxation with respect thereto.

(B) Upon finding by the Department of Taxation that any wholesale cigarette dealer is delinquent in payment of the Cigarette Excise Tax and failure to pay such delinquency upon the expiration of ten days after final date fixed by the Department of Taxation for such payment or any extension of such payment date granted by the Department.

(C) Upon failure to submit the wholesale cigarette dealer's monthly report within ten days from notice of such failure.

(former TX-21-06); Eff 5-13-65; 7-26-39
Rule promulgated under: RC 5703.14
Rule amplifies: RC 5743.04

5703-15-07 Limiting sale of stamps to licensed dealers.

The treasurer of state and the treasurer's agents may sell cigarette tax stamps only to licensed wholesale or retail cigarette dealers except pursuant to specific authority of the tax commissioner.

Eff 11-17-55; 9-17-04
Rule promulgated under: RC 5703.14
Rule authorized by: RC 5703.05
Rule amplifies: None
R.C. 119.032 review dates: Exempt

5703-15-08 Sales of packages of cigarettes for which tax indicia are not available.

With respect to packages containing any number of cigarettes for which tax indicia are not available, the taxes levied by sections 5743.02 , 5743.023 and 5743.024 of the Revised Code shall be paid to the treasurer of state on or before the tenth day of each month on all such packages of cigarettes sold in this state during the preceding calendar month.

In lieu of the manner otherwise provided by law to evidence payment of said taxes, each person liable for payment of the taxes levied by sections 5743.02 and 5743.023 of the Revised Code shall, prior to the sale of any such packages of cigarettes in this state, print or otherwise stamp on the bottom of each package the words "ohio tax paid"; each person liable for payment of the taxes levied by section 5743.024 of the Revised Code shall, prior to the sale of any packages of cigarettes into any county in which the tax is in effect, print or otherwise stamp on the bottom of each package the words "OHIO & COUNTY TAX PAID."

The provisions herein shall not be construed to alter in any respect those provisions of law pertaining to sales of said packages of cigarettes in this state other than the manner of payment of said taxes and the manner of evidencing such payment.

Eff 1-20-91
Rule promulgated under: RC 5703.14
Rule authorized by: RC 5703.05
Rule amplifies: RC 5743.04

5703-15-09 Tax rate on long cigarettes capable of being cut into parts.

In case cigarettes or the packages containing them are perforated so that each cigarette may be conveniently cut into two or more parts so as to make two or more cigarettes, the number of cigarettes in such packages for the purpose of taxation shall be the number as though they were cut.

(former TX-21-10); Eff 7-26-39
Rule promulgated under: RC 5703.14

5703-15-10 Vending machines.

It shall be the duty of all cigarette vending machine owners or operators, upon request, to report under oath to the Department of Taxation the number of cigarette vending machines owned, operated or controlled by said owners, operators or controllers, in use or in stock or subject to use, and their location.

(former TX-33-11); Eff 7-26-39
Rule promulgated under: RC 5703.14

5703-15-11 Sales by railroad dining and club cars.

Railroad companies operating dining and club car service within this state shall be permitted to traffic in cigarettes at retail sale by securing a retail cigarette license in the county where the headquarters of such dining and club car service is established in the State, as provided by Revised Code 5743.15 .

(former TX-21-12); Eff 7-26-39
Rule promulgated under: RC 5703.14

5703-15-12 Delivery of cigarettes for manufacturers' agents.

Prior to the time of each and every shipment or delivery of cigarettes to any person in Ohio for the use of any manufacturer's agent or representative, a copy of the invoice covering such shipment or delivery must be mailed directly to the department of taxation by the manufacturer of such cigarettes.

Cigarette manufacturers shall notify the department in writing in advance of the shipment or delivery, giving information as to the approximate date or dates, location or locations, brand and method of distribution.

(former TX-33-13); Eff 7-26-39; 9-17-04
Rule promulgated under: RC 5703.14
Rule authorized by: 5703.05
Rule amplifies: None
R.C. 119.032 review dates: Exempt

5703-15-13 Monthly reports of cigarettes shipped by wholesale cigarette dealers.

(A)

(1) As used in this rule:

(a) "Unstamped cigarettes" means packages of cigarettes that do not bear an Ohio cigarette tax stamp or meter impression.

(b) "Sale" has the same meaning as in division (D) of section 5743.01 of the Revised Code and includes delivery or other distribution.

(2) Each licensed wholesale cigarette dealer shall submit to the tax commissioner cigarette sales reports on or before the last day of each month. Such reports shall cover the sale of both stamped and unstamped cigarettes during the preceding month to points outside of Ohio to other cigarette wholesale dealers, and sales made to an agency of the federal government. The reports shall be filed on a form and in a manner prescribed by the commissioner. The reports shall be filed with the monthly report that is required by rule 5703-15-14 of the Administrative Code.

(B) Whenever a licensed wholesale cigarette dealer is required to file an inventory return pursuant to rule 5703-15-16 of the Administrative Code, the dealer shall also file cigarette sales reports, in substance the same as those required by paragraph (A) of this rule, reporting the sale of cigarettes during the period from the first day of the month through the day upon which the inventory was conducted. The reports shall be filed on or before the thirtieth day after the date of the inventory and shall be submitted with the reports required by paragraph (B) of rule 5703-15-14 of the Administrative Code.

(C) When reports have been filed pursuant to paragraph (B) of this rule, the next cigarette sales reports due pursuant to paragraph (A) of this rule shall include the sale of cigarettes during the period from the day after the inventory to the end of the month.

Replaces: 5703-15-13

Effective: 10/11/2007
R.C. 119.032 review dates: Exempt
Promulgated Under: 5703.14
Statutory Authority: 5703.05
Rule Amplifies: 5703.14 , 5743.01 , 5743.03
Prior Effective Dates: 5/22/47, 11/25/83, 9/17/04

5703-15-14 Monthly reports by cigarette dealers receiving cigarettes in Ohio.

(A) Each licensed wholesale cigarette dealer that receives or causes to be received in this state cigarettes shall, on or before the last day of each month, file reports on a form and in a manner prescribed by the tax commissioner. The reports shall indicate the quantities of cigarettes received during the preceding month, the person from whom the cigarettes were purchased, and any other information requested by the commissioner. Reports shall be filed by each dealer each month whether or not cigarettes were actually received during the preceding month.

(B) Whenever a licensed wholesale cigarette dealer is required to file an inventory return pursuant to rule 5703-15-16 of the Administrative Code, the dealer shall also file reports, in substance the same as the monthly reports required by paragraph (A) of this rule, reporting the receipt of cigarettes during the period from the first day of the month through the day upon which the inventory was conducted. The reports shall be filed on or before the thirtieth day after the date of the inventory.

(C) When a report has been filed pursuant to paragraph (B) of this rule, the next monthly reports due pursuant to paragraph (A) of this rule shall report the receipt of cigarettes during the period from the day after the inventory to the end of the month.

Effective: 10/11/2007
R.C. 119.032 review dates: Exempt
Promulgated Under: 5703.14
Statutory Authority: 5703.05
Rule Amplifies: 5703.14 , 5743.01 , 5743.05
Prior Effective Dates: 5/1/69, 3/21/70, 1/25/83, 7/20/00,

5703-15-15 Applications for refund on unsaleable cigarettes.

(A) A wholesale dealer may make application for refund of cigarette tax previously paid by the dealer on unsaleable cigarettes returned to the manufacturer. Such application shall be made on a form prescribed by the tax commissioner. The application must be supported by the following original documents:

(1) The manufacturer's returned goods authorization;

(2) The bill of lading;

(3) The manufacturer's affidavit of receipt that includes taxing jurisdiction, number of packs, number of stamps, and stamp type; and

(4) The manufacturer's credit memorandum.

The application must be filed with the department of taxation within the manufacturer's period prescribed by section 5743.05 of the Revised Code.

(B) A wholesale dealer may make application for refund of cigarette tax previously paid by the dealer on stamped cigarettes rendered unsaleable due to theft. Such application shall be made on a form prescribed by the tax commissioner. The burden of proof is on the claimant to show that the cigarettes were, in fact, stolen. Tax on unaccounted loss or inventory shrinkage is not subject to refund. The application must be supported by the following documentation or copies thereof:

(1) The police or sheriff's report;

(2) The claim or report to the insurance company and the results of the insurance company investigation; and

(3) Any other information required by the department of taxation.

The application must be filed with the department of taxation within the period prescribed by section 5743.05 of the Revised Code.

(C) A wholesale dealer who has lost cigarettes to a theft must notify the department of taxation within twenty-four hours of the discovery of the theft. Failure to so notify the department may result in the denial of any claim for refund filed on account of such stolen stamped cigarettes.

(D) The documentation required by paragraphs (A) and (B) of this rule must be submitted with the application or within a reasonable time thereafter. If approved by the tax commissioner, a copy in lieu of the original may be submitted for documentation required by paragraph (A) of this rule.

Eff 10-18-82; 9-17-04
Rule promulgated under: RC 5703.14
Rule amplifies: RC 5703.14 , 5743.05
Rule authorized by: 5703.05
R.C. 119.032 review dates: Exempt

5703-15-16 Cigarette wholesaler inventories and inventory returns.

(A) The department of taxation may conduct an inventory of a licensed cigarette wholesale dealer's stock of cigarettes, cigarette tax stamps, meter impressions, and other means of identification, at any time during regular business hours. A copy of the inventory findings shall be left with the wholesale dealer or the dealer's authorized agent or employee.

(B) In addition to the return required by section 5743.03 of the Revised Code, each licensed cigarette wholesale dealer, whose stock has been the subject of an inventory conducted by the department of taxation, shall file with the department of taxation a return showing the dealer's entire purchases and sales of cigarettes, tax stamps, meter impressions, and other means of identification, together with any other information requested by the tax commissioner, for the period from the last day covered by the dealer's preceding tax return through the day on which the inventory was conducted. The return shall be made on a form prescribed by the commissioner which shall be delivered to the dealer at the same time as the inventory report. The return shall be filed on or before the thirty-first day after the inventory is conducted. When an inventory return has been filed pursuant to this paragraph, the dealer's next return required by section 5743.03 of the Revised Code, shall report the purchases and sales for the period from the day after the inventory to the end of the semiannual period.

(C) Remittance of any tax deficiency shall be made with the inventory return required by paragraph (B) of this rule. Failure to file the return shall subject the wholesale dealer to the same penalties mandated by section 5743.03 of the Revised Code for failure to file the return required by that section.

Eff 10-28-83; 12-7-04
Rule promulgated under: RC 5703.14
Rule amplifies: RC 5703.14 , 5743.03 , 5743.14
Rule authorized by: 5703.05
R.C. 119.032 review dates: Exempt

5703-15-17 Storage of unstamped cigaretes by dealer.

(A) As used in this rule:

(1) "Dealer" means the holder of a current valid wholesale cigarette dealer's license issued pursuant to section 5743.15 of the Revised Code and who is authorized to purchase cigarette tax indicia from the treasurer of state.

(2) "Unstamped cigarettes" means packages of cigarettes, to which Ohio cigarette tax indicia have not been applied and upon which the Ohio cigarette tax has not been paid.

(3) "Place of business" means the location where the dealer applies tax indicia to cigarettes, as referenced on his license.

(4) "Public warehouse" means a place operated by a person in the business of storing goods for others for consideration.

(5) "Warehouseman" means the individual, partnership, corporation, or other person that controls and operates a public warehouse.

(B) Except as provided in this rule, no dealer shall store unstamped cigarettes at any place other than his place of business.

(C) A dealer may store unopened cases of unstamped cigarettes at the same public warehouse where the manufacturer of the cigarettes, from whom the dealer purchased them, stored the cigarettes immediately prior to such purchase. The dealer may store unopened cases of unstamped cigarettes at any other public warehouse only after approval of the department of taxation.

(D) Within forty-eight hours of the purchase from the manufacturer, the dealer shall, in writing, notify the department of taxation that he is storing unstamped cigarettes at a public warehouse. The dealer shall disclose the name and location of the warehouse and the quantity of cigarettes purchased.

(E) Any cigarettes owned by the dealer and stored at a place other than his place of business shall be considered part of the dealer's inventory for purposes of Chapter 5743. of the Revised Code and Chapter 5703-15 of the Administrative Code.

(F) No unstamped cigarettes shall be transported between warehouses, or between a warehouse and a dealer's place of business, by any means other than by a regulated common carrier.

(G) A dealer shall not transfer title of unstamped cigarettes to any person in this state except the cigarette manufacturer from whom they were purchased. A dealer shall not transfer possession of such unstamped cigarettes to any person other than a warehouseman or regulated common carrier.

(H) A warehouseman or other person who acquires an interest in unstamped cigarettes through lien or judgment may only sell such cigarettes to a dealer or cigarette manufacturer, and then, only after prior approval of the department of taxation.

(I) Any violation of this rule constitutes cause for revocation of the dealer's wholesale license by the tax commissioner.

Eff 11-25-85
Rule promulgated under: RC 5703.14
Rule authorized by: RC 5703.05
Rule amplifies: RC 5743.01 , 5743.03 , 5743.112 , 5743.15 , 5743.18 , 5743.20

5703-15-18 Suspension of discount for selling cigarettes below cost.

(A) In addition to the power to revoke or suspend a wholesale cigarette dealer's license, the tax commissioner may suspend a dealer's right to any discount in the further purchase of cigarette tax stamps or impressions upon finding by the commissioner that the dealer has violated section 1333.12 of the Revised Code by advertising, offering to sell, or selling cigarettes below cost.

(B) Notice of the suspension shall be delivered to the wholesale dealer personally or by certified mail. Such notice shall describe the reason for suspending the discount and the length of the time for which the suspension will be effective.

(C) After the expiration of ten days after the dealer received the notice of suspension, the tax commissioner shall prepare a journal entry ordering the suspension of discount as specified in the notice. Certified copies of the journal entry shall be delivered to the dealer and the treasurer of state personally or by certified mail. From the date of his receipt of the journal entry the treasurer shall refuse to allow a discount on the dealer's purchases of cigarette tax stamps and meter impressions until the period of suspension has expired.

(D)(1) A dealer notified of discount suspension under this rule may, within ten days after receipt of the notice of suspension, protest the suspension to the tax commissioner. The protest must be filed personally or by certified mail and must specify the basis of the protest.

(2) In the protest, the dealer may request a personal appearance hearing. If such a hearing is requested, it shall be held in Columbus within thirty days of the filing of the protest. The hearing may be postponed by the commissioner for up to fifteen days if necessary. The commissioner shall give the dealer reasonable notice of the date and time for the hearing by mailing the notice of hearing by certified mail to the last known business address of the dealer. At the hearing, the dealer may present any evidence to show he was not in violation of section 1333.12 of the Revised Code or any other information relevant to the proposed suspension. No transcript or stenographic record of the hearing will be made.

(3) If no hearing is requested, the commissioner shall consider any information presented with the protest filed by the dealer.

(4) The commissioner shall issue a journal entry setting forth the final determination on the protest and suspension and shall deliver the journal entry to the dealer personally or by certified mail. The final determination of the commissioner may be appealed to the board of tax appeals pursuant to section 5717.02 of the Revised Code. After all time limits for appeal have expired, the commissioner shall deliver a certified copy of the journal entry to the treasurer of state who shall implement the suspension according to its terms.

(E) The first suspension of any dealer's discount shall be for a period not to exceed sixty days. Any subsequent suspension shall be for a period not to exceed one year.

(F) For purposes of this rule, selling below the presumptive cost to the wholesaler as published by the department of taxation constitutes sufficient cause to issue a notice of suspension of the discount.

(G) For any violation of section 1333.12 of the Revised Code, the commissioner may elect to pursue either the suspension of discount as provided by this rule or the suspension or revocation of the dealer's license as provided in section 1333.21 of the Revised Code.

Eff 11-15-87
Rule promulgated under: RC 5703.14
Rule authorized by: RC 5703.05
Rule amplifies: RC 1333.12 , 1333.21 , 5743.05

5703-15-19 Cigarette master settlement agreement reporting. [Rescinded].

Rescinded eff 9-17-04

5703-15-20 Licensing cigarette manufacturers and importers and registration of other tobacco products manufacturers, importers, and brokers.

(A)

(1) Cigarette manufacturers and cigarette importers will be required to make and deliver an application to the tax commissioner, which states the name of the applicant, the nature of the applicant's business, and any other information required by the commissioner. Any license issued under such application will be valid for a period of one year commencing on the fourth Monday of May.

(2) All cigarette manufacturers and importers that apply for a license under paragraph (A) of this rule may be required to provide documentation satisfactory to the commissioner that their products are legal for sale. Manufacturers whose cigarette brands are listed on the attorney general's web site under section 1346.05 of the Revised Code will be presumed to have met this requirement. Any cigarette manufacturer or importer shipping cigarette brands not listed on the attorney general"s web site may be required to provide documentation showing that the cigarettes are legal for sale into another state and that such cigarettes will only be shipped to cigarette wholesalers licensed to do business in such other state.

(B)

(1) Unless the commissioner grants an alternative filing frequency, all cigarette manufacturers and cigarette importers are required to file reports with the commissioner by the end of each month. This report shall set forth the brands and quantity of all cigarettes shipped into this state, including the quantity of all brands of cigarettes not manufactured by signatories to the "Master Settlement Agreement," that were shipped into this state during the preceding month. Additionally, the report shall detail the recipient's name and address, the invoice numbers, invoice dates, and any other information the commissioner prescribes.

(2) Failure to file the report required under section 5743.072 of the Revised Code and described in paragraph (B)(1) of this rule shall be grounds for revocation of the license authorizing such manufacturer or importer to send cigarettes into this state. The commissioner shall send, by certified mail or personal delivery, a notice of the intent to revoke such manufacturer's or importer's license. In the event such manufacturer or importer contests the commissioner's determination, such person must, within ten days of the receipt of this notice, petition the commissioner on such finding. The commissioner shall timely provide such person with a hearing on the matter in accordance with Chapter 119. of the Revised Code and will issue a final determination on the revocation of such license. Upon any such revocation, the commissioner shall immediately notify the attorney general to take necessary actions, including those prescribed under section 1346.05 of the Revised Code.

(C)

(1) Section 5743.66 of the Revised Code requires all manufacturers, importers, andor brokers of other tobacco products to register with the commissioner prior to selling or distributing other tobacco products in this state. All manufacturers, importers, or brokers of other tobacco products will be required to make and deliver an application to the commissioner, that states the name of the applicant, the nature of the applicant's business, and any other information required by the commissioner. Such manufacturer, importer, or broker must register by the first day of February of each year. Any registration issued under such application will be valid for a period of one year commencing on the first day of February.

(2) Unless the commissioner grants an alternative filing frequency, all registered manufacturers, importers, or brokers of other tobacco products shall file a report with the commissioner by the end of each month. This report shall be on a form and in a manner prescribed by the commissioner and shall detail all sales of roll-your-own tobacco by brand and quantity; all sales of other tobacco products to distributors located in this state for the prior month; a current list of prices; invoice numbers; invoice dates; invoice amounts; and any other information the commissioner prescribes.

(3) All manufacturers, importers, or brokers of roll-your-own tobacco that register under paragraph (C) of this rule may be required to provide documentation satisfactory to the commissioner that their products are legal for sale. Manufacturers whose roll-your-own brands are listed on the attorney general's web site under section 1346.05 of the Revised Code will be presumed to have met this requirement. Any manufacturer, importer or broker shipping roll-your-own tobacco brands not listed on the attorney general's web site may be required to provide documentation showing that the roll-your-own tobacco is legal for sale into another state and that such roll-your-own tobacco will only be shipped to distributors licensed to do business in such other state.

(4) Failure to file the report required under section 5743.66 of the Revised Code and described in paragraph (C)(3) of this rule shall be grounds for revocation of the registration authorizing such manufacturer, importer, or broker to send other tobacco products into this state. The commissioner shall send, by certified mail or personal delivery, a notice of the intent to revoke such manufacturer's, importer's, or broker's registration. In the event such manufacturer, importer, or broker contests the commissioner's determination, such person must, within ten days of the receipt of this notice, petition the commissioner on such finding. The commissioner shall timely provide such person with a hearing on the matter in accordance with Chapter 119. of the Revised Code and will issue a final determination on the revocation of such licenseregistration. Upon any such revocation, the commissioner shall immediately notify the attorney general to take necessary actions, including those prescribed under section 1346.05 of the Revised Code.

(D) Nothing in this rule shall hinder the attorney general from removing from the list issued under section 1346.05 of the Revised Code any manufacturer that is not in compliance with the reporting requirement or any other rule promulgated by the commissioner under these provisions.

(E)

(1) Except as provided in section 5743.20 of the Revised Code, no cigarette wholesaler may purchase cigarettes from anyone other than a licensed cigarette manufacturer or importer.

(2) The list of licensed cigarette manufacturers and importers is public information pursuant to section 5743.20 of the Revised Code.

(3) Except as provided in section 5743.20 of the Revised Code, no distributor of other tobacco products shall purchase other tobacco products from anyone other than a registered manufacturer, importer, or broker of other tobacco products.

(4) Any cigarettes held for sale or distribution in violation of this rule are subject to confiscation under section 5743.08 of the Revised Code, and any other tobacco products held for sale or distribution in violation of this rule are subject to confiscation under section 5743.55 of the Revised Code. Such confiscation is in addition to any penalties available under section 5743.99 of the Revised Code or any other applicable provision of law.

Effective: 10/11/2007
R.C. 119.032 review dates: Exempt
Promulgated Under: 5703.14
Statutory Authority: 1346.08 , 5703.05 , 5743.15
Rule Amplifies: 5743.15 , 5743.072 , 5743.18 , 5743.66
Prior Effective Dates: 5/19/2006 (Emer.), 8/11/06

5703-15-21 Sale of other tobacco products between licensed other tobacco product distributors.

(A)

(1) As used in this rule, "sale" has the same meaning as in division (D) of section 5743.01 of the Revised Code and includes delivery or other distribution.

(2) All persons dealing in sales of other tobacco products, including persons dealing in sales of previously taxed other tobacco products (secondary distributor), other than persons dealing exclusively in sales of previously taxed other tobacco products to ultimate consumers, must be licensed under section 5743.61 of the Revised Code.

(B)

(1) Retailer dealers must purchase other tobacco products only from licensed other tobacco products distributors and cannot purchase from unlicensed distributors or other retailers.

(2) Licensed other tobacco products distributors selling to retailers must use the account number assigned by the tax commissioner pursuant to section 5743.54 of the Revised Code on all transactions of other tobacco products and may not use another licensed distributor's license number, even though that other distributor paid the tax.

(C)

(1) Unless the out-of-state supplier of other tobacco products provides an invoice stating that the tax imposed by section 5743.51 of the Revised Code has been paid along with such supplier's assigned account number as required by section 5743.54 of the Revised Code, the first receiver of untaxed other tobacco products in this state is liable for the tax imposed under section 5743.51 of the Revised Code.

(2) Unless the out-of-state supplier of untaxed other tobacco products is a registered manufacturer, importer, or broker of other tobacco products under section 5743.66 of the Revised Code, such supplier may not ship untaxed other tobacco products into this state without an authorization from the commissioner. The commissioner may authorize repeated transactions of such shipments for a specified period of time.

(3) The request must be made on a form and in a manner prescribed by the commissioner for such purpose and must contain the brands, quantity, date of shipment, method of shipment, and supplier, as well as any other information required by the commissioner. If such shipment involves roll-your-own tobacco not contained on the directory provided for in section 1346.05 of the Revised Code, documentation may be required that such roll-your-own tobacco is legal for sale in another state.

(4) Approved requests will be sent to both the supplier and receiving distributor and must be carried in the vehicle actually transporting such other tobacco products. The receiving distributor must, within seventy-two hours excluding weekends and holidays, notify the commissioner if the quantities received do not correspond with the quantities contained on the commissioner's authorization form. Absent notification to the commissioner, the receiving wholesaler will be presumed to have received the quantity approved for shipment along with the resulting tax liability.

(5) Shipments of untaxed other tobacco products between distributors in this state are prohibited.

(6) Shipments of other tobacco products on which the tax is paid are permitted between licensed other tobacco products distributors, provided that the distributor selling such products purchases the products from a registered manufacturer, importer, or broker.

(7) The commissioner reserves the right to verify, upon request, that the supplying wholesaler is the first purchaser from an other tobacco products manufacturer, importer, or broker.

(8) Sales invoices made by licensed distributors of other tobacco products received from another licensed distributor must contain the license number issued to the distributor receiving the products from such other distributor.

(D) All licensed distributors of other tobacco products are required to file monthly reports on a form and in a manner prescribed by the commissioner detailing the invoice number, the invoice date, the price, and any other information prescribed by the commissioner. Alternative filing frequencies may be established if the commissioner determines that monthly filing is not warranted.

(E)

(1) Both the supplying distributor and receiving distributor are required to file reports of shipments made and received. These reports are in addition to any tax returns required to be filed under section 5743.52 of the Revised Code.

(2) Records of all licensed distributors must be made available to the commissioner, upon request, including purchases of both taxed and untaxed products, and any other information the commissioner deems necessary to verify the transaction.

(F) Whoever violates any provision of this rule is subject to having its products confiscated under section 5743.55 of the Revised Code. Such confiscation is in addition to the penalties available under sections 1346.09 , 1346.10 , and 5743.99 of 5703-15-21 2 the Revised Code or any other applicable provision of law.

Replaces: 5703-15-21

Effective: 10/11/2007
R.C. 119.032 review dates: Exempt
Promulgated Under: 5703.14
Statutory Authority: 5703.05 , 5743.51
Rule Amplifies: 5743.61
Prior Effective Dates: 03/05/2006

5703-15-22 Sale of unstamped cigarettes between licensed cigarette wholesalers.

(A)

(1) Shipments of unstamped cigarettes between licensed cigarette wholesalers located in this state require the authorization of the tax commissioner. Such authorization shall be on a form prescribed by the commissioner for such purpose. Absent special circumstances, such authorization will only be given for shipments between two licensed cigarette wholesalers.

(2) Absent special circumstances, the licensed wholesaler selling the cigarettes must have purchased the cigarettes from either a licensed cigarette manufacturer or a licensed cigarette importer.

(3) The request to ship unstamped cigarettes must be made on a form and in a manner prescribed by the commissioner for such purpose and must contain the brands, quantity, date of shipment, method of shipment, and supplier of the cigarettes, as well as any other information required by the commissioner. If such shipment involves cigarettes not contained on the directory provided for in section 1346.05 of the Revised Code, documentation may be required that such cigarettes are legal for sale in another state.

(4) Approved requests will be sent to both the supplying and receiving cigarette wholesalers and must be carried in the vehicle actually transporting such cigarettes. The receiving wholesaler must, within seventy-two hours excluding weekends and holidays, notify the commissioner if the quantities received do not correspond with the quantities contained on the commissioner's authorization form. Absent notification to the commissioner, the receiving wholesaler will be presumed to have received the quantity approved for shipment along with the resulting tax liability.

(5) Both the supplying wholesaler and receiving wholesaler are required to file monthly reports of shipments made and received.

(6) The commissioner reserves the right to request documentation verifying that any shipment across state lines of unstamped cigarettes between wholesalers has received approval from any other state involved.

(B) The commissioner reserves the right to verify, upon request, that the supplying wholesaler is the first purchaser from a cigarette manufacturer or importer.

(C) Shipments through this state (i.e., not originating and/or terminating in this state) are allowed without an authorization from the commissioner, provided the shipment is made using a common carrier accompanied by a proper bill of lading or invoice that states the quantity, source, and destination of the cigarettes.

(D) Nothing in this rule permits a non-stamping cigarette wholesaler or retailer from purchasing cigarettes from a manufacturer or importer.

(E) Whoever violates any provision of this rule is subject to having its cigarettes confiscated under section 5743.08 of the Revised Code. Such confiscation is in addition to any penalties under sections 1346.09 , 1346.10 , and 5743.99 of the Revised Code, or any other applicable provision of law.

Effective: 10/11/2007
R.C. 119.032 review dates: Exempt
Promulgated Under: 5703.14
Statutory Authority: 5703.05 , 5743.20
Rule Amplifies: 5743.031
Prior Effective Dates: 03/05/2006