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s 3303. Payment by Electronic Funds Transfer.
Payments by electronic funds transfer shall be made in accordance with California Code of Regulations, Title 18, Section 4905.
Note: Authority cited: Section 45160, Revenue and Taxation Code. Reference: Sections 45160 and 45162, Revenue and Taxation Code.
s 3501. Records.
(a) General. A feepayer shall maintain and make available for examination on request by the board or its authorized representatives, records in the manner set forth at California Code of Regulations, Title 18, Section 4901.
(b) Specific Applications. In addition to the record keeping requirements set forth in subdivision (a), feepayers subject to the Ballast Water Management Fee shall keep records documenting ballast water loading and discharge, ship schedules, ports of call and routes taken.
Note: Authority cited: Section 55301, Revenue and Taxation Code. Reference: Section 55302, Revenue and Taxation Code.
s 3502. Relief from Liability.
A person may be relieved from the liability for the payment of the taxes or fees required to be collected pursuant to the Fee Collection Procedures Law, Part 30, (commencing with Section 55001) of Division 2 of the Revenue and Taxation Code, including any penalties and interest added to the taxes or fees, when that liability resulted from the failure to make a timely return or a payment and such failure was found by the board to be due to reasonable reliance on written advice given by the board described in California Code of Regulations, Title 18, Section 4902.
The fees and taxes collected pursuant to the Fee Collection Procedures Law include the California Tire Fee, Ballast Water Management Fee, and Natural Gas Surcharge.
Note: Authority cited: Section 55301, Revenue and Taxation Code. Reference: Section 55045, Revenue and Taxation Code.
s 3503. Payment by Electronic Funds Transfer.
Payments by electronic funds transfer shall be made in accordance with California Code of Regulations, Title 18, Section 4905.
Note: Authority cited: Section 55050, Revenue and Taxation Code. Reference: Sections 55050 and 55052, Revenue and Taxation Code.
Note: Authority cited for Chapter 9: Sections 30001 to 30479, inclusive, Revenue and Taxation Code.
s 4011. Distributors Not Engaged in Business in This State.
Persons who are not engaged in business in this state may apply for a distributor's license. Holders of such licenses are required to file a certified monthly report or return with the Board on Board of Equalization Form BOE-501-CTS entitled "Cigarette and Tobacco Products Tax Return for Shipments to California Consumers" reporting the following: distributor's name, account number, his or her total number of distributions of cigarettes, total excise tax due on cigarettes, total cost of tobacco purchased, total excise tax due on cost of tobacco products, total excise tax due for all cigarettes and tobacco products, remitting payment of taxes, including any applicable interest or penalty, the name and address of each purchaser from whom an order is taken, the number of cigarettes and/or type, quantity, and wholesale cost of tobacco products sold and delivered pursuant to each order, and the amount of tax required to be collected from each purchaser. Further, the licensee is required to collect the tax, give receipts for the collected tax, and pay the tax to the Board in the same manner as licensees engaged in business in this state.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30108 and 30140.1, Revenue and Taxation Code.
s 4016. Bond of Distributor.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30141, 30145, 30182 and 30183, Revenue and Taxation Code.
s 4017. Deposits in Lieu of Surety Bonds.
Note: Authority cited: Section 30451, Revenue and Taxation Code.
s 4018. Amount of Security.
(a) The amount of security shall be fixed by the board. The board may increase or reduce the amount of security at any time, but in no event shall the amount of security be less than $1,000.
(b) When a distributor is authorized to purchase stamps or meter register settings on the deferred payment basis, the security shall be fixed in an amount no less than 70 percent of the amount, and no more than twice the amount, as fixed by the board, of deferred payment purchases which the distributor may have unpaid at anytime.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30141, 30142 and 30167, Revenue and Taxation Code.
s 4021. Opening Inventory.
Every distributor or wholesaler engaged in the sale of cigarettes shall take a physical inventory of cigarettes on hand as of the time the distributor or wholesaler first engages in the sale of cigarettes as a distributor or wholesaler. A report of a first physical inventory taken shall be filed with the board on or before the 25th day of the calendar month following the calendar month in which the distributor or wholesaler first engages in the sale of cigarettes as a distributor or wholesaler.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30182, 30188, 30453, and 30454, Revenue and Taxation Code.
s 4022. Inventories of Cigarettes.
Every distributor and wholesaler engaged in the sale of cigarettes shall furnish with his or her monthly certified report to the board, on Board of Equalization Form BOE-501-CD entitled "Cigarette Distributor's Tax Report" or Board of Equalization Form BOE-501-CW entitled "Cigarette Wholesaler's Report," a statement of the cigarettes on hand at the end of the month covered by the report, showing the number of cigarettes on hand contained in packages to which tax stamps or meter impressions are affixed and the number not bearing tax stamps or meter impressions. The statement shall be furnished in one of the following manners:
(a) If the distributor or wholesaler has a cycle count inventory system and perpetual inventory system in place, the monthly statement shall be based on the perpetual inventory report run on the last business day of the month for which the distributor's or wholesaler's report is filed. However, at least once every calendar year, the monthly statement shall be based on a physical inventory of cigarettes on hand on the last business day of the month for which the distributor's or wholesaler's report is filed.
A "cycle count inventory system" is a system that provides evidence that all cigarettes are counted on a regular basis, with each item being counted at least once every three-month period.
A "perpetual inventory system" is a system in which inventory records are maintained and updated continuously as items are purchased or sold.
(b) If the distributor or wholesaler does not have a cycle count inventory system and perpetual inventory system in place, the monthly statement shall be based on the inventory on hand at the end of the month covered by the report. However, at least once every six months, the monthly statement shall be based on a physical inventory of cigarettes on hand performed within the last five days of the month for which the distributor's or wholesaler's report is filed.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30182, 30188, 30453 and 30454, Revenue and Taxation Code.
s 4023. Inventories of Stamps and Meter Units.
Every distributor engaged in the sale of cigarettes shall keep daily records of the number of tax stamps and meter units used in the distributor's affixing operations and shall record daily the meter register readings of the meters employed. The distributor shall take physical inventories of unused tax stamps on hand as of the end of each month and shall furnish, with his or her monthly report to the board, a statement of all unaffixed and affixed tax stamps and meter units on hand at the end of the month covered by the report.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30182, 30453, and 30454, Revenue and Taxation Code.
s 4026. Records.
(a) General. Every distributor, every wholesaler, and every manufacturer, of cigarettes and tobacco products, shall maintain and make available for examination on request by the board or its authorized representatives, records in the manner set forth at California Code of Regulations, Title 18, Section 4901.
(b) Specific Applications. In addition to the record keeping requirements set forth in subdivision (a), every cigarette manufacturer and every tobacco products manufacturer shall comply with the following requirements:
Every cigarette manufacturer or tobacco products manufacturer dealing in, transporting, storing or warehousing cigarettes or tobacco products in this state or otherwise engaged in business in this state as a distributor shall keep and maintain at his or her place of business in this state, or at the warehouses or storage places from which cigarettes or tobacco products are released or delivered by the manufacturer, a record of all releases or deliveries of cigarettes or tobacco products from each storage place or warehouse in this state and shall keep and maintain either within the state or at the manufacturer's home office, a record of all the manufacturer's shipments of cigarettes or tobacco products from points outside this state to points within this state. Such records shall be made available at any time during normal business hours to the board or its authorized representatives for examination upon request.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30453 and 30454, Revenue and Taxation Code.
s 4027. Manufacturer's Monthly Report.
(a) Each cigarette or tobacco products manufacturer shall file with the board by the 20th day of each calendar month a certified report with respect to all releases and deliveries of cigarettes or tobacco products in this state and all shipments of cigarettes or tobacco products from a point outside this state to a point within this state made or authorized by the manufacturer during the preceding calendar month. The releases, deliveries and shipments for each purchaser shall be grouped together in the report. The report shall be on Board of Equalization Form BOE-501-MC entitled "Manufacturer's Report of Cigarettes Released from Storage in California or Shipped into California" or Board of Equalization Form BOE-501-MT entitled "Manufacturer's Report of Tobacco Products Released from Storage in California or Shipped into California" and shall show the following information with respect to each release, delivery or shipment:
(1) the date of the release, delivery or shipment;
(2) the location from which the release, delivery or shipment was made;
(3) the name and address of the purchaser;
(4) the address of the place to which the cigarettes or tobacco products were shipped, released or consigned;
(5) the number of cigarettes or type, quantity and wholesale cost of tobacco products released, delivered or shipped;
(6) the invoice or document number and date thereof representing the release, delivery or shipment;
(7) if released to a licensed distributor, the license number of such distributor; and
(8) in the case of a cancellation of any release, delivery or shipment, information indicating the transaction was cancelled.
The above information need not be supplied with respect to cigarettes or tobacco products which are non-tax-paid under the provisions of chapter 52 of the Internal Revenue Act of 1954, as amended, and are released, delivered or shipped in internal revenue bond or customs control.
(b) In lieu of the monthly reports required by paragraph (a) of this section, a manufacturer may arrange with the board to supply the required information by supplying data processing media or other data in such manner and in such format as is satisfactory to the board.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30453 and 30454, Revenue and Taxation Code.
s 4028. Period for Which Records to Be Kept.
s 4029. Failure to Keep Records.
s 4030. Wholesaler's Records.
Every wholesaler shall keep complete and accurate records of all transactions in cigarettes and such other records, including copies of all reports to the board, as may be required by the board.
s 4031. Distributor's and Wholesaler's Report.
(a) Every distributor required to be licensed shall on or before the 25th day of each calendar month, file a report with the board of all acquisitions and distributions of cigarettes for the preceding calendar month, together with such other information as is required on the report form. The report shall be made on a form prescribed by the board.
(b) Every wholesaler required to be licensed shall on or before the 25th day of each calendar month, file a report with the board of all acquisitions and sales of cigarettes for the preceding calendar month, together with such other information as is required on the report form. The report shall be made on a form prescribed by the board.
s 4031.1. Payment by Electronic Funds Transfer.
Payments by electronic funds transfer shall be made in accordance with California Code of Regulations, Title 18, Section 4905.
Note: Authority cited: Section 30190, Revenue and Taxation Code. Reference: Sections 30190 and 30192, Revenue and Taxation Code.
s 4032. Passenger Common Carrier Report.
s 4033. Consumer's or User's Report.
s 4034. Report of Sales to Consumers.
(a) Every person engaged in business in this state who sells or solicits orders for cigarettes, the use or consumption of which is subject to the tax, must file a certified return with the board, on Board of Equalization Form BOE-501-CI entitled "Cigarette and Tobacco Products Excise Tax Return, on or before the 25th day of the calendar month following the calendar month in which the cigarettes were delivered in this state showing:
(1) the name and address of each purchaser from whom an order was taken;
(2) the number of cigarettes sold and delivered pursuant to each order; and
(3) the amount of tax required to be collected from each purchaser, together with a remittance of such tax.
(b) Every person engaged in business in this state who sells or solicits orders for tobacco products, the use or consumption of which is subject to the tax, must file a return with the board as follows:
(1) If the person is required to be a licensed tobacco products distributor, he or she shall report on the tobacco products distributor's monthly certified tax return (Board of Equalization Form BOE-501-CT entitled "Tobacco Products Distributor Tax Return") the wholesale cost of all tobacco products distributed to consumers, together with a remittance of the tax due. The return shall be filed on or before the 25th day of the calendar month following the calendar month in which the tobacco products were delivered in this state.
(2) If the person is required to be a registered tobacco products distributor, he or she shall file a certified return with the board, on Board of Equalization Form BOE-501-CTS entitled "Cigarette and Tobacco Products Tax Return", on or before the 25th day of the calendar month following the calendar month in which the tobacco products were delivered in this state showing:
(A) the name and address of each purchaser from whom an order was taken;
(B) the type, quantity, and wholesale cost of tobacco products sold and delivered pursuant to each order; and
(C) the amount of tax required to be collected from each purchaser, together with a remittance of such tax.
(c) Every person engaged in business in this state who, as permitted by state law and the terms of the November 23, 1998 Master Settlement Agreements with the state which are applicable to the signatories to those Agreements, makes gifts of untaxed cigarettes or tobacco products as samples by means of shipment from an out-of-state point directly to a donee in this state shall collect the tax from the donee if the donee is other than a licensed distributor and shall give the donee a receipt showing the name and place of business of the donor, the name and address of the donee, the number of cigarettes donated, and the amount of tax required to be collected, or the type, quantity and wholesale cost of the tobacco products donated and a statement indicating that the tobacco products tax has been paid.
Each package of sample cigarettes shall have imprinted on it: "Not for Sale. Applicable state tax has been paid." and each package of sample tobacco products shall be clearly marked as a sample.
Donors of sample cigarettes shall notify the board in writing in advance of the shipment of the cigarettes into the state giving information as to the approximate date or dates, location or locations, brand, and the method of shipment into the state. Each donor of cigarettes and tobacco products shall file a return with the board on or before the 25th day of the calendar month following the calendar month in which the cigarettes or tobacco products were delivered in this state showing the number of cigarettes shipped into the state or the type, quantity and wholesale cost of the tobacco products and the amount of tax required to be collected from each donee, together with a remittance of such tax.
(d) The taxes required to be collected constitute debts owed by the distributor, or other person required to collect the taxes, to this state.
(e) "Engaged in business in the state" means and includes any of the following:
(1) Maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary, or agent, by whatever name called, an office, place of distribution, sales or sample room or place, warehouse or storage place or other place of business.
(2) Having any representative, agent, salesperson, canvasser or solicitor operating in this state under the authority of the distributor or its subsidiary for the purpose of selling, delivering, or the taking of orders for cigarettes.
(f) The requirements of this regulation do not apply to those distributions of federally tax-free cigarettes or tobacco products which are exempt from tax under section 30105.5 of the Revenue and Taxation Code.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30105.5, 30108, 30140, 30151, 30182, 30183, 30453 and 30454, Revenue and Taxation Code.
s 4035. Tax Remittances.
s 4036. Cigarette and Tobacco Products Floor Stock and Indicia Adjustment Tax.
Note: Authority cited: Sections 30131.6 and 30451, Revenue and Taxation Code. Reference: Sections 30131.2 and 30166, Revenue and Taxation Code.
s 4041. Common Carrier Delivery Reports.
Every common carrier making a delivery of cigarettes to a consignee in this State, the shipment of which originated outside this State shall report to the board not later than the 25th day of the calendar month following the calendar month in which the delivery of the cigarettes was made, the following information concerning the shipment:
(a) the name of the shipper and the point of origin;
(b) the name of the consignee and the address to which delivered;
(c) the date and number of the waybill covering the shipment;
(d) the number of cases, bales or other containers of cigarettes delivered and the quantity of cigarettes contained therein as shown by the shipping documents; and
(e) in the case of rail shipments, the car initials and number; and
(f) in the case of water shipments, the name of the vessel and the number of the steamship bill of lading.
This report shall be made on a form prescribed by and filed with the board at Sacramento.
s 4046. Sale of Stamps.
s 4047. Transfer of Stamps.
Without prior written approval of the board, a distributor may not sell to, transfer to, or exchange with another distributor or any other person stamps issued by the board, and may not sell, transfer or distribute packages of cigarettes accompanied by unaffixed stamps.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Section 30164, Revenue and Taxation Code.
s 4048. Manner of Affixing Stamps.
Tax stamps shall be securely affixed to the bottom end of each standard package of 20 cigarettes. When affixed to "flats" or "rounds" the stamps shall be securely affixed to the lid or top of the individual package. Tax stamps shall not be affixed to the carton or larger container of cigarettes.
s 4049. Adherence of Stamps.
Tax stamps shall be affixed in such manner as to adhere securely to each package of cigarettes. If packages of cigarettes are wrapped in or covered by some substance to which the stamps do not readily adhere, such wrapper or covering must be roughened or treated so that the stamps will adhere securely thereto.
s 4051. Metering Machines.
Only those metering machines as are approved by the board shall be employed for affixing meter impressions to packages of cigarettes. A distributor shall not affix meter impressions to packages of cigarettes unless he has first obtained authorization from the board to employ this method of affixation.
s 4052. Metering Machine Requirements.
A distributor desiring to use a metering machine shall apply to the board for authorization. The following terms and conditions are applicable to the use of metering equipment by a distributor:
(a) Impressions will be made only by means of machines approved by the board and meters registered with the board;
(b) Only clear and legible imprints will be used on packages of cigarettes distributed;
(c) Impressions by a meter registered to the distributor will be made only on packages of cigarettes owned by that distributor;
(d) Only ink approved by the board will be used;
(e) Each meter will be kept in a safe place when not in use, and will be safeguarded when being transported;
(f) In case of theft, loss or mysterious disappearance of a meter or tampering therewith, the incident will be immediately reported to the board, to proper police authorities, and to the meter manufacturer;
(g) No meter will be transferred or otherwise disposed of without prior written permission of the board;
(h) No repairs will be made to a meter except by a duly authorized representative of the meter manufacturer and upon prior approval of the board; and
(i) Any meter having a broken seal will be immediately reported to the board and to the manufacturer and will not be used by the distributor.
s 4053. Revocation of Permission.
If a distributor issues illegible meter impressions or violates any regulation of the board relative to the use of metering machines, the board may revoke its authorization to the distributor to affix meter impressions to packages of cigarettes.
s 4054. Manner of Affixing Meter Impressions.
Tax meter impressions shall be clearly imprinted to the bottom end of each standard package of 20 cigarettes. Meter impressions shall not be imprinted on any package, carton, or container of cigarettes containing other than 20 cigarettes. All dies and other equipment must be regularly serviced and cleaned according to the instructions issued by the manufacturers of the equipment.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30162, 30163 and 30164, Revenue and Taxation Code.
s 4055. Where Purchased; Distributors' Discount.
Cigarette tax stamps and meter register settings allowing the imprinting of meter impressions may be purchased by licensed distributors through stamp orders submitted to the board. Orders must include the distributor's account number, distributor's name and address, the quantity of stamps for each denomination, order date and the signature of the authorized individual. The tax stamps and meter register settings may be purchased for cash, and when authority has been granted in writing to a distributor, the tax stamps and meter register settings may be purchased on a deferred payment basis. In either case, a discount as provided by law will be allowed to a licensed distributor.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30161, 30162, 30166 and 30167, Revenue and Taxation Code.
s 4056. Units of Sale; Minimum Sales.
Cigarette tax stamps designated for packages containing 10 cigarettes, 20 cigarettes and 25 cigarettes will be sold in rolls containing 1,200 or 30,000 stamps. Such stamps are sold in full rolls only and the smallest sale unit is one roll. The Board, at its discretion, may authorize the use of stamps of other denominated values and specifications.
Note: Authority cited: Sections 30451 and 30162, Revenue and Taxation Code. Reference: Sections 30161 and 30162, Revenue and Taxation Code.
s 4056.1. Expiration of Heat-Applied Decal Tax Stamps.
Note: Authority cited: Sections 30162 and 30451, Revenue and Taxation Code. Reference: Sections 30161 and 30162, Revenue and Taxation Code; and Section 6 of Statutes 2004, Chapter 822.
s 4057. Cash Sales of Tax Stamps or Meter Register Settings.
Every distributor desiring to purchase tax stamps or meter register settings for cash shall file an application to register the individual authorized to order cigarette tax stamps, on a form approved by the board. The distributor shall identify and authorize in writing on the form the individual who may order stamps or meter register settings for this distributor's account and include the signature of the individual authorized to submit the tax stamp orders. If a distributor wishes to allow multiple individuals to submit cigarette tax stamp orders, a separate application is required for each individual authorized to order cigarette tax stamps. Orders for stamps or meter register settings shall be made by the distributor on order forms approved by the board. The distributor's authorization of such individual(s) shall continue in effect until written notice of revocation of the authority is delivered to the board by registered mail or until written acknowledgment of receipt of the revocation is given by the board. Payment must be made for cash purchases at the time the stamps or meter register settings are ordered. The board may require cash, electronic fund transfer or certified or cashier's checks in payment of such purchases.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30161, 30162 and 30166, Revenue and Taxation Code.
s 4058. Application for Credit Purchases.
Every distributor desiring to purchase tax stamps or meter register settings on the deferred payment basis shall request the board to set the maximum amount of such purchases the distributor may have unpaid at any time and the amount of the required security.
The board shall set the amounts and notify the distributor by mail of the maximum amount of deferred payment purchases that the distributor may have unpaid at any time and the amount of the required security. The maximum amount of tax stamps or meter register setting purchases for which the distributor may defer payment as determined by the board shall not exceed twice the distributor's average monthly tax liability, based on the distributor's previous six months' experience, or in the case of a distributor not previously authorized to make deferred payment purchases or a distributor the character of whose business has changed substantially, the maximum amount shall not exceed twice the estimated average monthly tax liability as determined by the board.
The distributor shall provide to the board a surety bond or deposit in lieu of security in an amount equal to not less than 70 percent of the maximum amount, or more than twice the amount, of deferred payment purchases the distributor may have unpaid at any time as determined by the board.
If the distributor elects, under Section 30168, to make payments on a twice-monthly basis, the distributor shall provide to the board a surety bond or deposit in lieu of security in an amount equal to not less than 50 percent of the maximum amount, or more than twice the amount, of deferred payment purchases the distributor may have unpaid at any time as determined by the board.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30142, 30162, 30167 and 30168, Revenue and Taxation Code
s 4059. Authorization for Credit Purchases.
(a) Upon approval of a distributor's request to purchase tax stamps or meter register settings on the deferred payment basis, and receipt of the required security, the board shall give written authorization to the distributor for the amount of deferred payment purchases the distributor may have unpaid at any time.
(b) Before making deferred payment purchases of tax stamps and meter register settings, the distributor shall file an application to register the person authorized to order cigarette tax stamps on behalf of the distributor on a form approved by the board. The distributor shall identify and authorize in writing on the form the individual who may order purchases of stamps or meter register settings for this distributor's account and include the signature of the individual authorized to submit the tax stamp orders. If a distributor wishes to allow multiple individuals to submit cigarette tax stamp orders, a separate application form must be submitted for each individual. The distributor's authorization of such individual(s) shall continue in effect until written notice of revocation of the authority is delivered to the board by registered or certified mail or until written acknowledgment of receipt of the revocation is given by the board.
(c) Orders for stamps or meter register settings shall be made by the distributor on order forms approved by the board.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30162, 30167 and 30169, Revenue and Taxation Code.
s 4060. Payment for Credit Purchases.
Payment for all deferred payment purchases of tax stamps or meter register settings made during each calendar month must be made to the board or the board's designee by the 25th day of the calendar month following the month in which the purchases were made. Remittance for such purchases shall be made payable to "State Board of Equalization." The privilege of making deferred payment purchases shall be suspended as long as a delinquent balance is owing therefor.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30162, 30167 and 30168, Revenue and Taxation Code.
s 4061. Unused Stamps and Unused Meter Settings.
(a) The board will refund or credit to a distributor the denominated value, less the purchase discount, of any identifiable unused stamps which are returned to the board. The board will refund or credit to a distributor the denominated value, less the purchase discount, of any verifiable meter setting remaining on a meter when the meter is returned to the bank for cancellation of the meter setting. A claim for refund or credit must be made on Board of Equalization Form BOE-1024 entitled "Claim For Refund For California Cigarette Tax Stamps" and filed with the board, providing the following information: distributor's name, account number, address, telephone number, date, district office, number and type of cigarette tax stamps being claimed for refund, amount of claim for each type of cigarette tax stamp being claimed for refund, total amount of claim less discount of .0085, and reason for claim. The form further requires acknowledgement by a board representative and his or her supervisor of receipt of the cigarette tax stamps being claimed for refund and certification by a board representative of the receipt and destruction of the cigarette tax stamps being claimed for refund.
(b) "Unused stamp" means a tax stamp on a tax stamp roll or on a package of cigarettes which is not yet distributed and includes only those stamps on which 4 of the 5 characters of the stamp's serial number can be identified. If fewer than 4 characters in the stamp's serial number can be identified, the distributor shall provide evidence concerning the remainder of the tax stamp to show that the remainder of the stamp is not affixed to a package of cigarettes that has been distributed. Such proof may include, but is not limited to, the paper from the stamp roll or package of cigarettes to which the remainder of the stamp is affixed. If the stamp is of a design generated by a technology capable of being read by a scanning or similar device, a majority of the stamp must be present and should be able to be read by a scanning or similar device in accordance with Section 30162. Alternatively, as evidence of unused stamps, a distributor may return damaged stamps in such a form that a board representative is otherwise able to verify authenticity and that the stamps have not been used.
(c) If the refund or credit is for tax stamps that are affixed to packages of cigarettes, an authorized board employee, upon verification that the refund or credit is due, shall ensure that the distributor obliterated the stamp with the use of a permanent marker.
(d) If the refund or credit is for tax stamps remaining on a roll, upon verification that the refund or credit is due, the roll shall be returned to the board for destruction.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30162 and 30176, Revenue and Taxation Code.
s 4062. Destroyed Stamps and Meters.
The board will refund or credit to a distributor the denominated value, less the purchase discount, of any stamps, or unused meter register settings, when the stamps or the meter have been destroyed by fire, flood or other casualty prior to the affixation of the tax stamps or meter impressions to packages of cigarettes. The distributor must establish by clear and convincing evidence that the stamps or meter were destroyed by fire, flood or other casualty and the denominated value of the stamps or remaining meter register balance. Theft or mysterious disappearance of unaffixed stamps or of a meter shall not constitute a casualty for which refund or credit will be given.
Note: Authority cited: Sections 30451 and 30176, Revenue and Taxation Code. Reference: Section 30176, Revenue and Taxation Code.
s 4063. Destroyed Cigarettes.
The board will refund or credit to a distributor the denominated value, less the purchase discount, of stamps or meter impressions affixed to packages of cigarettes which have been destroyed by fire, flood or other casualty, prior to distribution. The distributor must establish by clear and convincing evidence that the cigarettes were destroyed by fire, flood or other casualty prior to distribution and the denominated value of the affixed tax stamps or meter impressions. The theft or mysterious disappearance of packages of cigarettes shall not constitute a casualty for which refund or credit will be given.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Section 30177, Revenue and Taxation Code.
s 4063.5. Exported Tax-Paid Tobacco Products.
The board will refund or credit to a distributor the tax paid on tobacco products which are:
(a) Shipped to a point outside this state, pursuant to a contract of sale, by delivery by the distributor to such point by means of:
(1) facilities operated by the distributor;
(2) delivery by the distributor to a carrier for shipment to a consignee at such point, or
(3) delivery by the distributor to a customs broker or forwarding agent for shipment outside this state.
(b) Sold to a foreign purchaser for shipment abroad and delivered to a ship, airplane, or other conveyance furnished by the purchaser for the purpose of carrying the cigarettes or tobacco products abroad and actually carried to a foreign destination.
(c) Sold for use solely outside this state and delivered to a forwarding agent, export packer, or other person engaged in the business of preparing goods for export or arranging for their exportation, and actually delivered to a port outside the continental limits of the United States.
The distributor must file the claim for refund on Board of Equalization Form BOE-1024-T entitled "Claim for Refund - Exported Tax-Period Tobacco Products" and provide copies of documentation to support payment of taxes, as well as bills of lading or other documentary evidence of the delivery of the tobacco products to a carrier, customs broker or forwarding agent for shipments outside this state. The original documents must be retained by the distributor for inspection by employees of the board. In the case of tobacco products for foreign export, copies of United States Customs shipper's export declarations filed with the Collector for Customs or other documentary evidence of export must be obtained and retained. No refund or credit will be given if the tobacco products are diverted in transit or for any reason are not actually delivered outside the state pursuant to the contract of sale or are not shipped abroad by a foreign purchaser. Any application for refund or credit based upon the exportation of tax-paid tobacco products from this state shall be filed with the board within three months after the close of the calendar month in which the tobacco products are exported.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30176.1, 30178.1, 30178.2 and 30179.1, Revenue and Taxation Code.
s 4064. Claim Forms.
A claim for refund or credit made pursuant to Sections 4061, 4062, 4063 or 4063.5 must be made on a form prescribed by and filed with the board.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30176, 30176.1 and 30177, Revenue and Taxation Code.
s 4065. Unsalable Cigarettes.
The board will refund or credit to a distributor the denominated value, less the purchase discount, of identifiable stamps or meter impressions affixed to packages of cigarettes which have become unfit for use or unsalable before distribution, or after distribution if the cigarettes have been returned for credit or have been replaced and proof is submitted to the board showing that the cigarettes have not been used for smoking in California. Claim for refund or credit must be made on a form prescribed by the board and shall be accompanied by a properly executed receipt and a copy of the credit memorandum of the manufacturer for returned stock, or by proof of destruction of the cigarettes with the tax stamps or meter impressions thereon in the presence of an employee of the board authorized to witness the destruction.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Section 30177, Revenue and Taxation Code.
s 4066. Stolen Indicia.
Refund or credit will not be given for stamps, meter settings or meter impressions which are lost through theft or mysterious disappearance of any unaffixed stamps, any meter, or any packages of cigarettes to which stamps or meter impressions have been affixed. If identifiable stamps, meter settings or meter impressions which have been lost through theft or mysterious disappearance are later recovered, credit or refund may be given under Sections 4061 or 4065.
Note: Authority cited: Section 30451, Revenue and Taxation Code.
s 4067. Provisions Limited to Distributors.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30176, 30177, Revenue and Taxation Code.
s 4071. Necessary Costs.
s 4076. Sales by Manufacturers.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Section 30103, Revenue and Taxation Code.
s 4077. Sales to the United States.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Section 30102, Revenue and Taxation Code.
s 4078. Sales to the State.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30008, 30105.5, Revenue and Taxation Code.
s 4079. In Bond Federal Tax-Free Cigarettes.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Article 1, Section 8, Clause 3, United States Constitution.
s 4080. Interstate and Foreign Commerce.
The tax does not apply to sales of cigarettes or tobacco products which are:
(a) Shipped to a point outside this State, pursuant to a contract of sale, by delivery by the seller to such point by means of:
(1) Facilities operated by the seller;
(2) Delivery by the seller to a carrier for shipment to a consignee at such point, or
(3) Delivery by the seller to a customs broker or forwarding agent for shipment outside this State.
(b) Sold to a foreign purchaser for shipment abroad and delivered to a ship, airplane, or other conveyance furnished by the purchaser for the purpose of carrying the cigarettes or tobacco products abroad and actually carried to a foreign destination.
(c) Sold for use solely outside this State and delivered to a forwarding agent, export packer, or other person engaged in the business of preparing goods for export or arranging for their exportation, and actually delivered to a port outside the continental limits of the United States.
Bills of lading or other documentary evidence of the delivery of the cigarettes or tobacco products to a carrier, customs broker or forwarding agent for shipments outside the State must be retained by the distributor for inspection by employees of the board. In the case of cigarettes or tobacco products for foreign export, copies of United States customs shippers' export declaration filed with the Collector of Customs or other documentary evidence of export must be obtained and retained. The tax applies to the transaction if the cigarettes or tobacco products are diverted in transit or for any reason are not actually delivered outside the State pursuant to the contract of sale or are not shipped abroad by a foreign purchaser, regardless of documentary evidence held by the distributor.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Section 30008, Revenue and Taxation Code.
s 4081. Sample Cigarettes and Tobacco Products.
The giving away in this state of untaxed cigarettes or tobacco products as samples is a taxable distribution.
Manufacturers' agents or representatives may for advertising purposes, as permitted by state law and the terms of the November 23, 1998 Master Settlement Agreements with the state which are applicable to the signatories to those Agreements, distribute to consumers packages of cigarettes without stamps or meter impressions affixed to the packages or untaxed tobacco products. However, the manufacturer giving away such sample cigarettes or tobacco products must report the distribution on its monthly report or return and pay the tax due. Each package of such samples shall have imprinted on it: "Not for sale. Applicable state tax has been paid." and each package of sample tobacco products shall be clearly marked as a sample.
Cigarette manufacturers shall notify the board in writing in advance of the sampling, giving information as to the approximate date or dates, location or locations, brand, and method of distribution.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30005, 30005.5, 30008 and 30009, Revenue and Taxation Code.
s 4082. Cigarettes for Hospitalized Veterans.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30102.5 and 30105.5, Revenue and Taxation Code.
s 4086. Distribution from U. S. Government Bonded Premises.
s 4089. Statement of Operator.
A statement in substantially the following form must be affixed by the operator thereof upon each cigarette vending machine in a conspicuous place:
"This vending machine is operated by
__________
Name of Operator
__________
Place of Business of Operator
who holds Permit No. __________ , issued pursuant to the Sales and Use Tax Law."
s 4091. Payment by Consumer.
(a) Each consumer or user of cigarettes or tobacco products subject to the tax, resulting from the consumer having:
(1) purchased cigarettes or tobacco products in any quantity, when such cigarettes or tobacco products are shipped to the consumer from out of state,
(2) personally transported or brought into the state untaxed cigarettes in quantities of more than 400 cigarettes in a single lot for his or her own use or consumption, or
(3) obtained more than 400 untaxed cigarettes at one time from a federal instrumentality listed in Revenue and Taxation Code section 30102 must pay the tax either to the licensed or registered distributor under the Cigarette and Tobacco Products Tax Law from whom the cigarettes or tobacco products were purchased, or directly to the board if the person from whom the cigarettes or tobacco products were purchased is not a licensed or registered distributor. A person who pays the tax directly to the Board must file a certified Board of Equalization Form BOE-501-CI entitled "Cigarette and Tobacco Products Excise Tax Return," and report the brand name, seller's name, seller's internet address or phone number, date received, and number of cartons or type and cost of tobacco products received.
(b) Consumers or users will be liable for payment of the tax to the board unless receipts as provided by regulation 4092 are obtained for payment of the tax to the distributor.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Sections 30005, 30005.5, 30106, 30107 and 30108, Revenue and Taxation Code.
s 4092. Receipts for Tax Paid to Distributors.
Every distributor required to collect the tax under Revenue and Taxation Code Section 30108 must give a receipt to each purchaser for the amount of tax collected. The receipt need not be in any particular form but must show the following:
(a) The name and place of business of the distributor making the sale or accepting the order for cigarettes or tobacco products;
(b) The license number or registration number of the distributor;
(c) The name and address of the purchaser;
(d) The number of cigarettes or type, quantity, and wholesale cost of all tobacco products purchased;
(e) The date the cigarettes or tobacco products were purchased; and
(f) The amount of tax collected by the distributor or statement indicating that the tobacco products tax has been paid.
A sales invoice containing the data required above, together with evidence of payment thereof, will constitute a receipt.
Note: Authority cited: Section 30451, Revenue and Taxation Code. Reference: Section 30108, Revenue and Taxation Code.
s 4096. Table of Applicable Sections.
Note: Authority cited: Section 30451, Revenue and Taxation Code.
s 4098. Relief from Liability.
(a) In General. A person may be relieved from the liability for the payment of cigarette and tobacco products taxes, including any penalties and interest added to those taxes, when that liability resulted from the failure to make a timely return or a payment and such failure was found by the board to be due to reasonable reliance on:
(1) Written advice given by the board under the conditions set forth in subdivision (b) below; or
(2) Written advice in the form of an annotation or legal ruling of counsel under the conditions set forth in subdivision (d) below; or
(3) Written advice given by the board in a prior audit of that person under the conditions set forth in subdivision (c) below. As used in this regulation, the term "prior audit" means any audit conducted prior to the current examination where the issue in question was examined.
Written advice from the board may only be relied upon by the person to whom it was originally issued or a legal or statutory successor to that person. Written advice from the board which was received during a prior audit of the person under the conditions set forth in subdivision (c) below, may be relied upon by the person audited or by a legal or statutory successor to that person.
The term "written advice" includes advice that was incorrect at the time it was issued as well as advice that was correct at the time it was issued, but, subsequent to issuance, was invalidated by a change in statutory or constitutional law, by a change in board regulations, or by a final decision of a court of competent jurisdiction. Prior written advice may not be relied upon subsequent to: (1) the effective date of a change in statutory or constitutional law and board regulations or the date of final decision of a court of competent jurisdiction regardless that the board did not provide notice of such action; or (2) the person receiving a subsequent writing notifying the person that the advice was not valid at the time it was issued or was subsequently rendered invalid. As generally used in this regulation, the term "written advice" includes both written advice provided in a written communication under subdivision (b) below and written advice provided in a prior audit of the person under subdivision (c) below.
(b) Advice Provided in a Written Communication. Advice from the board provided to the person in a written communication must have been in response to a specific written inquiry from the person seeking relief from liability, or from his or her representative. To be considered a specific written inquiry for purposes of this regulation, representatives must identify the specific person for whom the advice is requested. Such inquiry must have set forth and fully described the facts and circumstances of the activity or transactions for which the advice was requested. (continued)