Title of Regulation: 23VAC10-370. Cigarette Tax Regulations (amending 23VAC10-370-20, 23VAC10-370-40, 23VAC10-370-70, 23VAC10-370-90, 23VAC10-370-100, 23VAC10-370-110; repealing 23VAC10-370-80, 23VAC10-370-120, 23VAC10-370-180).

Statutory Authority: § 58.1-203 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: February 25, 2019.

Effective Date: March 12, 2019.

Agency Contact: Joe Mayer, Lead Policy Analyst, Department of Taxation, P.O. Box 27185, Richmond, VA 23261-7185, telephone (804) 371-2299, FAX (804) 371-2355, or email joseph.mayer@tax.virginia.gov.

Basis: Section 58.1-203 of the Code of Virginia authorizes the Tax Commissioner to issue regulations relating to the interpretation and enforcement of the laws governing taxes administered by the Department of Taxation. Section 58.1-1016 of the Code of Virginia authorizes the Department of Taxation to administer the cigarette tax.

Purpose: As a result of a periodic review of the Cigarette Tax Regulations initiated by the Department of Taxation on August 3, 2016, and completed September 26, 2016, the department has determined that the regulation should be amended because the majority of the regulation sections are outdated and provide no guidance beyond the plain meaning of the statutes to which they apply. This action removes language that provides no guidance beyond the plain meaning of the statutes.

The amendment of the regulation does not reflect any change in current tax policy and has no impact on the administration of the cigarette tax. The regulation is amended to reflect statutory changes and to remove provisions that paraphrase statutes that are clear and unambiguous. This action amends the regulation to (i) remove language authorizing the use of meter impressions to evidence payment of the tax, (ii) reflect the department's policy that Virginia revenue stamps are heat applied stamps that may be applied by machine or by hand, and (iii) clarify that only duly qualified stamping agents may purchase stamps and apply them to cigarettes.

This action repeals 23VAC10-370-80, 23VAC10-370-120, and 23VAC10-370-180 as they are outdated and provide no guidance beyond the plain meaning of the statutes to which they apply. The repealed sections are not necessary to protect the public health, safety, or welfare. A regulation that is not necessary to interpret the law or to protect the public health, safety, or welfare violates the general principles set forth in Governor Ralph S. Northam's Executive Order 14 (2018 amended) signed July 16, 2018.

Rationale for Using Fast-Track Rulemaking Process: The department is using the fast-track rulemaking process because the amendment of the regulation to remove language that is outdated and provides no guidance beyond the plain meaning of the statutes is expected to be noncontroversial. No comments were received during the periodic review of the regulation.

Substance: The Commonwealth imposes a state cigarette tax at the rate of 1.5 cents per cigarette (30 cents per pack of 20 cigarettes), which is paid by stamping agents through the purchase of stamps. The revenues from the cigarette tax are dedicated to the Health Care Fund and used solely for the provision of health care services, including Medicaid payments; disease diagnosis, prevention, and control; and community health services. The regulatory action does not reflect any change in current tax policy and will have no impact on the administration of the cigarette tax.

This action repeals 23VAC10-370-80, 23VAC10-370-120, and 23VAC10-370-180 as they are outdated and provide no guidance beyond the plain meaning of the statutes to which they apply.

This action amends 23VAC10-370-40 to remove language authorizing the use of meter impressions to evidence payment of the tax. The department has not allowed meter impressions for at least 17 years. This action will also remove stamping requirements reflecting statutory law that has been amended.

This action amends 23VAC10-370-70 to remove language that is outdated and provides no guidance beyond the plain meaning of the statute to which it applies. This section also will be amended to remove language authorizing the use of meter impressions to evidence payment of the tax. The statute does not authorize the use of meter impressions, and the department has never implemented the use of meter impressions. This section also is amended to reflect the mandate of § 58.1-1010 of the Code of Virginia that only wholesale dealers who have qualified as stamping agents under § 58.1-1011 of the Code of Virginia may apply revenue stamps to cigarettes. This section is amended to reflect the department's policy that Virginia revenue stamps are heat applied stamps that may be applied by machine or by hand.

This action amends 23VAC10-370-90 to remove language that is outdated and provides no guidance beyond the plain meaning of the statute to which it applies. This section also is amended to reflect the mandate of § 58.1-1010 that only wholesale dealers who have qualified as stamping agents under § 58.1-1011 may apply revenue stamps to cigarettes.

This action amends 23VAC10-370-100 to remove language that is outdated and provides no guidance beyond the plain meaning of the statute to which it applies. This section is amended to reflect the mandate of § 58.1-1010 that only wholesale dealers who have qualified as stamping agents under § 58.1-1011 may apply revenue stamps to cigarettes.

This action amends 23VAC10-370-110 to reflect the mandate of § 58.1-1010 that only wholesale dealers who have qualified as stamping agents under § 58.1-1011 may apply revenue stamps to cigarettes.

Issues: As this regulatory action updates the Cigarette Tax Regulations to reflect current law and remove language that is outdated and provides no additional guidance to statutes that are clear and unambiguous, there are no issues or disadvantages to the Commonwealth, the agency, and the public associated with this regulatory action. The primary advantage to the Commonwealth, the agency, and the public is the repeal of regulatory text that is unnecessary and in some cases contrary to the statutory law because of changes in the statutory law that have been made since the regulation was promulgated. The remaining regulation will be up to date.

Small Business Impact Review Report of Findings: This fast-track regulatory action serves as the report of the findings of the regulatory review pursuant to § 2.2-4007.1 of the Code of Virginia.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. As a result of a periodic review,¹ the Department of Taxation proposes to repeal provisions that are no longer accurate due to statutory changes or duplicative of the statutory language.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. This regulation contains general provisions applicable to the cigarette tax. Numerous statutory changes in the 2004, 2005, 2010, and 2015 Virginia General Assembly sessions amended the cigarette tax and rendered the current regulatory language inaccurate.² In addition, some of the current regulatory provisions are unnecessary because they are duplicative of information provided in the statute. The proposed changes will update the regulation so that it is consistent with the statute. Since this regulatory action does not reflect any change in current tax policy or on the administration of the cigarette tax, no economic effect is expected other than eliminating conflicting information between the Code of Virginia and the regulation.

Businesses and Entities Affected. This regulation applies to approximately 95 cigarette tax stamping permit holders.

Localities Particularly Affected. The proposed changes do not disproportionately affect particular localities.

Projected Impact on Employment. No impact on employment is expected.

Effects on the Use and Value of Private Property. No impact on the use and value of private property is expected.

Real Estate Development Costs. No impact on real estate development costs is expected.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. No costs or other effects are expected on small businesses.

Alternative Method that Minimizes Adverse Impact. No adverse impact on small businesses is expected.

Adverse Impacts:

Businesses. No adverse effects are expected on small businesses.

Localities. The proposed amendments will not adversely affect localities.

Other Entities. The proposed amendments will not adversely affect other entities.

______________________________

¹See http://townhall.virginia.gov/l/ViewPReview.cfm?PRid=1515.

²See http://lis.virginia.gov/cgi-bin/legp604.exe?042+ful+CHAP0003,

http://lis.virginia.gov/cgi-bin/legp604.exe?041+ful+CHAP1029,

http://lis.virginia.gov/cgi-bin/legp604.exe?051+ful+CHAP0028,

http://lis.virginia.gov/cgi-bin/legp604.exe?101+ful+CHAP0701,

http://lis.virginia.gov/cgi-bin/legp604.exe?151+ful+CHAP0738.

Agency's Response to Economic Impact Analysis: The Department of Taxation agrees with the Department of Planning and Budget's economic impact analysis.

Summary:

The amendments reflect statutory changes and remove provisions that paraphrase clear and unambiguous statutes, including (i) removing language authorizing the use of meter impressions to evidence payment of the tax; (ii) reflecting the department's policy that Virginia revenue stamps are heat applied stamps that may be applied by machine or by hand; (iii) clarifying that only duly qualified stamping agents may purchase stamps and apply them to cigarettes; and (iv) repealing 23VAC10-370-80, 23VAC10-370-120, and 23VAC10-370-180, which are outdated and provide no guidance beyond the plain meaning of the statutes to which they apply.

23VAC10-370-20. Tax levied; rate.

The Virginia cigarette excise tax is imposed at the rate of one and one-quarter mills on each cigarette and is required to be paid by every person within the Commonwealth who sells, stores, or receives cigarettes made of tobacco or any substitute thereof, for the purpose of distribution within this State state except a retail dealer or other person who sells, stores, or receives cigarettes with Virginia tax stamps affixed thereto.

Every person meeting the requirements of a permitted wholesaler under 23VAC10-370-120 shall be required to remit the tax on cigarettes for sale, storage or distribution in this state and be required to comply with all other provisions of this chapter.

23VAC10-370-40. How paid; affixing of stamps; records of dealers; penalty.

A. Generally. The Virginia cigarette excise tax shall be paid by the wholesale dealer who has qualified as such under the provisions of 23VAC10-370-120 or retail dealer who purchases unstamped cigarettes. Such payment of Payment of the tax shall be represented by a stamp, or stamps, or meter impression (hereinafter stamp) affixed to each package of cigarettes. The stamp value shall evidence the amount of tax imposed upon the individual package to which it is affixed.

B. Affixing of stamps. Every wholesale or retail dealer who receives unstamped cigarettes shall, within one hour after receipt of such cigarettes, begin affixing the proper stamp to each individual cigarette container.

1. The stamps shall be affixed to each individual container in such a manner that the removal will require continued application of water or steam.

2. The wholesale or retail dealer shall continue stamping the unstamped containers of cigarettes until all of the products subject to tax have been stamped.

3. B. Cigarettes destined for sale outside Virginia and in the inventory of a wholesale dealer engaged in interstate business, may be set aside and remain unstamped. Such tax exempt interstate stock shall be kept entirely separate from taxable stock in a manner to prevent the commingling of the interstate stock with the taxable stock.

C. Records of dealers. Every wholesale and retail dealer subject to imposition of the tax shall keep a record of purchases of all cigarettes, and retain all books and records, pertaining to the purchase and sale of such cigarettes.

Every wholesale dealer shall at the time of shipping or delivering any cigarettes make and retain a duplicate invoice which shows full and complete details of the sale or delivery of the taxable cigarettes.

D. Penalty for failure to comply. Any wholesaler or retailer who refuses or fails to comply with any of the provisions within this section shall be, upon conviction, guilty of a Class 1 misdemeanor.

 

23VAC10-370-70. Forms and kinds of containers, methods of breaking packages, and methods of affixing stamps; penalty for interfering with enforcement of article.

A. Generally. The Department of Taxation requires each package of cigarettes to have a stamp or meter impression conspicuously affixed, showing that the proper Virginia cigarette tax has been paid.

B. Methods of affixing stamps. Each wholesale or retail dealer stamping agent may affix such stamp or meter impression by using (1) hand applied stamps, (2) heat stamps attached to the cellophane wrappers and applied by a fusion stamping machine, or (3) Virginia tax paid impressions on the cellophane wrappers applied by cigarette tax stamping meter by hand.

C. Penalty for interfering with enforcement of article. Any person who is subject to the Virginia cigarette excise tax who refuses to allow the Department of Taxation's agents to fully inspect his premises, or in any way interferes with any agent of the Department in the performance of his duties in enforcing the statutes or regulations relating to the cigarette tax shall be, upon conviction, guilty of a Class 2 misdemeanor.

23VAC10-370-80. Documents touching purchase, sale, etc., of cigarettes to be kept for three years, subject to inspection. (Repealed.)

A. Generally. Every person who receives, stores, sells, handles or transports cigarettes in any manner whatsoever, is required to preserve all invoices, books, cancelled checks, or other documents relating to the purchase, sale, exchange, receipt or transportation of all cigarettes for a period of three years.

B. Examination of records. All invoices, books, cancelled checks and records dealing with cigarettes shall be subject to audit and inspection by any duly authorized representative of the Department during the usual business hours of the day.

C. Penalty for failing to keep records. Any person who fails or refuses to keep and preserve the records as required, or who fails or refuses to allow an audit or inspection of the records required, shall be, upon conviction, guilty of a Class 2 misdemeanor.

23VAC10-370-90. Monthly reports of wholesale dealers Cigarette tax credit certificates.

A. Generally. Every wholesale dealer qualified as such under the provisions of 23VAC10-370-120, shall file monthly reports, with the Department of Taxation, covering the purchase or receipt of all cigarettes during the preceding month. Such report must be filed between the first and tenth of each month, for the preceding month.

B. Information required on the monthly report. The report shall contain detailed information on: (1) tax value of all unstamped cigarettes on hand first day of month; (2) tax value of all unstamped cigarettes actually received during month; (3) tax value of unstamped cigarettes sold during the month; (4) tax value of unstamped cigarettes on hand last day of month; (5) gross tax value of Virginia tobacco revenue stamps on hand and unaffixed first day of month; (6) gross tax value of Virginia tobacco revenue stamps actually received during month; (7) gross tax value of Virginia tobacco revenue stamps on hand and unaffixed last day of month.

C. Examination of invoices. If the Department of Taxation examines the invoices of any wholesale dealer and the dealer is unable to furnish evidence that sufficient tobacco revenue stamps were purchased to cover unstamped cigarette purchases, the prima facie presumption shall be that such cigarettes were sold without proper stamps. Such presumption shall be that the sales were made in violation of 23VAC10-370-40.

D. Penalty for failure to file. Any qualified wholesale dealer who fails or refuses to timely file monthly reports as required herein shall be, upon conviction, guilty of a Class 3 misdemeanor.

E. Credit for erroneously applied stamps and Virginia stamped unsalable cigarettes returned to the manufacturer. Any qualified wholesale dealer stamping agent who erroneously applies Virginia revenue stamps to cigarettes or applies Virginia stamps to unsalable cigarettes which that are returned to the manufacturer, may apply to the Department of Taxation for a cigarette tax credit certificate.

1. Application for a cigarette tax credit certificate should be accompanied by substantiating evidence showing the circumstances surrounding the erroneously applied stamps, the quantity of stamps erroneously applied, and resolution of the situation. Application for credit certificate for unsalable cigarettes which that are returned to the manufacturer should be accompanied by a manufacturer's affidavit or manufacturer's statement that such quantity and package size of cigarettes were actually returned.

2. If the wholesaler has reasonably satisfied the Department of Taxation that the credit is due, the Department department shall issue a tobacco tax credit certificate.

3. The tobacco tax credit certificate may be utilized for subsequent tax stamp purchases.

4. If cigarettes are destroyed by fire or other disaster prior to stamping, application for a credit against accountability may be made with the Department department. If cigarettes are destroyed by fire or other disaster after cigarette stamps are applied, application for a tobacco tax credit certificate or tax refund may be made with the Department department. The application should be made as set out in subdivision 1 of this subsection section.

23VAC10-370-100. Preparation, design and sale of stamps; unlawful sale of stamps a felony.

A. Generally. Virginia revenue stamps (cigarette tax stamps) will be prepared and offered for sale by the Department of Taxation and may be purchased only from the Department of Taxation. It shall be unlawful for any person, other than the Department of Taxation, to sell tobacco revenue stamps not affixed to cigarettes sold.

1. Virginia revenue State cigarette tax stamps may be purchased only from the Department of Taxation, Richmond, Virginia, or from certain district offices of the department or certain commissioners of the revenue, which may change from time to time authorized city or county officers. Specific information on current locations will be provided by the Department of Taxation upon request.

2. Any purchase of Virginia revenue stamps must be made with cash, money order, cashier's check, or certified check unless bonding arrangements have been previously made with the Department of Taxation.

3. The wholesale dealer will be required to bear the burden for any postage and shipping charges for any Virginia revenue stamps shipped or mailed.

B. Penalty on unlawful sale of stamps. Any person unlawfully selling Virginia revenue stamps, whether the stamps are genuine or counterfeit, shall be, upon conviction, guilty of a Class 6 felony.

C. Discount on sale of stamps to qualified wholesalers. Qualified wholesalers, as regulated in 23VAC10-370-120, who purchase Virginia revenue stamps for use on taxable cigarettes sold and delivered by them shall be entitled to a discount.

1. For purposes of discount, carton shall mean (a) ten packs of cigarettes, each containing twenty cigarettes or, (b) nine packs of cigarettes, each containing twenty-five cigarettes.

2. The discount on sale of stamps to qualified wholesalers shall be two and one-half ($0.025) cents per carton of 10 packs of cigarettes, each containing twenty cigarettes and two and one-quarter ($0.0225) cents per carton of nine packs of cigarettes, each containing 25 cigarettes.

23VAC10-370-110. Sale of unstamped cigarettes by wholesale dealers; penalty stamping agents.

A. Generally. A wholesale dealer, who is qualified under 23VAC10-370-120, stamping agent may sell cigarettes in interstate commerce without affixing Virginia revenue stamps if such cigarettes are sold and shipped or delivered to persons outside this state. However, cigarettes without Virginia revenue stamps affixed, may be sold in interstate commerce only if: (1) (i) such cigarettes are sold to persons engaged in business as dealers in cigarettes in other states; (2), (ii) such cigarettes are purchased from the wholesale dealer stamping agent exclusively for resale in other states;, and (3) (iii) such cigarettes are at the time of sale properly stamped with revenue stamps of other states.

B. Other sales of unstamped cigarettes by wholesale dealers stamping agents. A duly qualified wholesale dealer stamping agent may also sell cigarettes without Virginia revenue stamps affixed thereto when: (1) (i) such cigarettes are sold to the United States or any of its instrumentalities for resale to or use or consumption by members of the armed services or to the Veterans Canteen Service of the Veterans Administration for resale to veterans of the United States armed services who are hospitalized or domiciled in hospitals or homes of the Veterans Administration or; (2) (ii) such cigarettes are sold and delivered to ships for consumption thereon, regularly engaged in foreign commerce or interstate coastwise shipping for consumption on the ships.

C. Records needed for cigarettes sold and shipped or delivered in interstate commerce to a person outside Virginia. A qualified wholesale dealer, stamping agent who sells unstamped cigarettes which that are delivered in interstate commerce, must keep: (1) (i) adequate records which that record the sale; (2), (ii) a copy of the invoice for such purchase or other substantiating evidence, and (3) (iii) the receipt from the common carrier, contract carrier, or post office showing shipment for delivery in another state. If delivered by the wholesale dealer stamping agent to the purchaser at a point outside of Virginia, the wholesaler stamping agent must maintain in addition to other records required herein by this chapter, a receipt which that shows such delivery. D. Records needed for sales of cigarettes properly stamped with revenue stamps of another state. A qualified wholesale dealer, stamping agent who sells cigarettes stamped with revenue stamps of another state must keep records of each sale, the original purchase order, a copy of the invoice for such purchase, and a receipt from the purchaser showing that the purchase was made exclusively for resale in another state. In addition, records must be maintained which that show the purchase and use of the other state's revenue stamps that the wholesale dealer used.

1. Exception. The wholesale dealer stamping agent who stamps cigarettes with out-of-state revenue stamps and has a place of business located partly within a city in Virginia and partly without Virginia, or in a county which adjoins such city, shall not be required to obtain a receipt from a purchaser from the other state if the cigarette tax in the other state is higher than the tax imposed in Virginia.

E. D. Cigarettes sold to the United States or instrumentality of the United States for resale to or use or consumption. Qualified wholesale dealers Stamping agents may sell unstamped cigarettes to the United States or to any U.S. instrumentalities for resale to or for the use or consumption by members of the armed services of the United States. The qualified wholesale dealer stamping agent may also sell unstamped cigarettes to the Veterans Canteen Service of the Veterans Administration for resale to veterans of the armed services of the United States who are hospitalized or domiciled in hospitals or homes of the Veterans Administration.

Qualified wholesale dealers Stamping agents must keep books and records regarding such sales to the United States, U.S. instrumentalities, or Veterans Canteen Service and maintain files of the original purchase orders or copies of invoices showing such sales.

Example 1: Qualified wholesale dealer Stamping agent A sells cigarettes to commissaries or officers' clubs operated by the U.S. Army as instrumentalities of the United States. Unstamped cigarettes may be sold to the commissaries or officers' clubs operated as instrumentalities of the United States.

Example 2: Qualified wholesale dealer Stamping agent B sells cigarettes to federal reformatories for resale. The cigarettes must be stamped by the wholesaler stamping agent prior to sale. Cigarettes may be sold to the United States or its instrumentalities without tax stamps affixed only if such cigarettes are sold for use or consumption to members of the armed forces or veterans of the armed forces hospitalized or domiciled in hospitals or homes of the Veterans Administration.

Example 3: Qualified wholesale dealer Stamping agent C sells cigarettes to the Post Enlisted Men's Club, which is not organized or operated as an instrumentality of the United States. The cigarettes must be stamped by the wholesaler stamping agent prior to sale since the Enlisted Men's Club is not considered an instrumentality of the United States, and such sale of cigarettes is not considered a sale made to the United States.

F. E. Cigarettes sold and delivered to ships, for consumption thereon, regularly engaged in foreign commerce or interstate coastwise shipping for consumption on the ships. A qualified wholesale dealer stamping agent may sell unstamped cigarettes for delivery to ships regularly engaged in foreign commerce or coastwise shipping between points in Virginia and points outside Virginia. The unstamped cigarettes must be delivered by the wholesale dealer stamping agent to the ship. The unstamped cigarettes must be for resale, use, or consumption upon such ship or in foreign commerce.

G. F. Conditions surrounding sale of unstamped cigarettes subjecting wholesale dealer stamping agent to tax. If any wholesale dealer fails to comply with any of the these provisions of 23VAC10-370-110, with respect to any sale of unstamped cigarettes, such wholesale dealer stamping agent shall pay the tax imposed upon such cigarettes.

H. Penalty for violation of sale of unstamped cigarettes. Any person who violates any of the provisions on the sale of unstamped cigarettes shall be, upon conviction, guilty of a Class 2 misdemeanor.

23VAC10-370-120. Qualification for dealer's permit. (Repealed.)

A. Generally. Any wholesaler, who desires to qualify and receive a permit to purchase and affix Virginia tobacco revenue stamps to cigarettes, must make application to the Department of Taxation. Such application must be made on the forms provided by the Department.

B. Issuance of stamping permit. After reviewing the wholesaler's application, the Department shall issue to the wholesaler it finds to be qualified, a permit which qualifies him to purchase and affix Virginia tobacco revenue stamps to cigarettes.

C. Privileges of qualified wholesale dealer. Any duly qualified wholesale dealer, who has received his permit to purchase and affix Virginia tobacco revenue stamps, shall be allowed a discount on purchases of the Virginia tobacco revenue stamps for his individual use as regulated in 23VAC10-370-100 C.

The Department of Taxation shall not sell stamps subject to discount to any wholesaler until he has received from the Department a permit to purchase and affix Virginia revenue stamps.

D. Revocation of stamping permit. The Department may revoke the wholesaler's permit if the wholesaler is found guilty of violating any provisions of the cigarette tax statutes or any adopted and promulgated rules of the Department pertaining to the cigarette tax.

Example 1: Wholesaler A has a place of business in Virginia and purchases unstamped cigarettes directly from the manufacturer. For purposes of the Virginia cigarette tax the wholesaler qualifies for a permit to buy at discount and stamp cigarettes with Virginia revenue stamps.

Example 2: Wholesaler B is an out of state business with no business locations in Virginia. Wholesaler B sells cigarettes to Virginia retailers. Wholesaler B qualifies for a permit to buy at discount and stamp the cigarettes subject to the Virginia cigarette excise tax.

Example 3: Chain store C distribution center with locations within and without Virginia, purchases cigarettes directly from manufacturers. Each distribution center within Virginia and without Virginia may qualify for a permit to buy at discount and stamp cigarettes subject to the Virginia cigarette excise tax.

Example 4: Wholesaler D, a qualified wholesale dealer for Virginia revenue stamp purposes, receives a request from Retailer E to stamp cigarettes owned by the retailer. The sale of Virginia revenue stamps by anyone other than the Department of Taxation is prohibited.

Example 5: Wholesaler F and Wholesaler G are engaged in a joint stamping operation. Each wholesaler must have been issued the permit required for stamping and each wholesaler must separately maintain all of his own records. Each wholesaler must separately purchase Virginia revenue stamps. If metering devices are used, each must have a separate meter with separately assigned meter number and each must stamp his own cigarettes.

23VAC10-370-180. Sale, purchase, possession, etc., of cigarettes for purposes of evading tax; penalty. (Repealed.)

A. Generally. Except as otherwise provided by law, it is unlawful for any person to sell, purchase, transport, receive or possess unstamped cigarettes.

1. Certain persons, as regulated in 23VAC10-370-110, may sell unstamped cigarettes; however, no person shall lawfully sell cigarettes without stamps for purposes of evading cigarette tax.

2. Any person who is not a regularly licensed dealer, as regulated in 23VAC10-370-120, having more than thirty packages of unstamped cigarettes in his possession in this State, is presumed to be evading the cigarette tax due on such cigarettes.

B. Penalty. Any person selling unstamped cigarettes for the purpose of evading the cigarette tax shall be, upon conviction, guilty of a Class 3 misdemeanor.