Loading
The Oregon Administrative Rules contain OARs filed through September 15, 2014
 
QUESTIONS ABOUT THE CONTENT OR MEANING OF THIS AGENCY'S RULES?
CLICK HERE TO ACCESS RULES COORDINATOR CONTACT INFORMATION

DEPARTMENT OF REVENUE

 

DIVISION 323

CIGARETTE TAXES

150-323.030

Exemption of Cigarette Sales in Interstate or Foreign Commerce

The tax applies to all cigarettes sold within this state, but does not apply to sales of cigarettes which are:

(1) Shipped to a point outside this state, pursuant to a contract of sale, by delivery by the seller to such out-of-state point by means of:

(a) The United States mail; or

(b) A common carrier licensed by the Interstate Commerce Commission; or

(c) Facilities operated by the seller. Oregon distributors claiming exemption from the tax on cigarettes on the ground that shipments or deliveries were made in interstate commerce shall certify, under penalties for false swearing, the name and address of the persons receiving such shipments or deliveries in such foreign states, and that the Oregon distributors are in possession of delivery data of the following description:

(A) A waybill, bill of lading or other evidence of shipment issued by a common carrier in the case of shipments by common carrier; or

(B) an insurance receipt or registry receipt issued by the United States Postal Department, or a Post Office Department receipt in the case of shipments made by U.S. mail; or

(C) a copy of the sellers invoice covering the sale, showing delivery by the seller at a designated out-of-state address, and signed by the purchaser or the purchaser's agent in the case of shipments by facilities operated by the seller. The Department reserves the right to require such additional proof as it deems necessary in any particular case.

(2) 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 abroad and actually carried to a foreign destination.

(3) 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.

(4) Sold for use as ship's supplies which are to be consumed or resold on the high seas or in foreign countries. Reports of such exempt sales must be maintained as provided in OAR 150-323.340-(A). The tax applies to the transaction if the cigarettes are diverted in transit or for any other reason are not actually delivered outside the state pursuant to the contract of sale or are not shipped abroad to a foreign purchaser, regardless of documentary evidence held by the distributor. Cigarettes are not considered to be interstate commerce and therefore are not exempt under ORS 323.040 if they are received by a purchaser or agent (other than a common carrier) in this state. Failure to keep any reports, waybills, bills of lading or other documents required by this rule is justification for the Department of Revenue to impose a tax on any cigarettes claimed to be shipped out of Oregon and exempt under this rule. Any tax imposed on these grounds shall be cancelled upon actual proof to the Department that the reports, waybills, bills of lading or other documents were in fact issued and the cigarettes were in fact shipped out of Oregon and were exempt under this rule.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.030
Hist.: 6-66 as 150-323.040; 9-71, Renumbered; 1-73; 8-75, Renumbered from 150-323.055; RD 8-1984, f. 12-5-84, cert. ef. 12-31-84

150-323.030-(B)

Allowance of Sales within this State of Cigarettes Stamped with other States' Indicia

(1) Generally, cigarettes sold by a wholesale cigarette distributor within this state must be stamped with an Oregon cigarette stamp. If sold to a retailer of another state, the cigarettes shall be stamped with the other state's indicia and must be transported by U. S. Mail, a licensed interstate common carrier or by the seller to a point outside this state.

(2) An exception is made for the sale to and self-service pickup by a licensed retailer of another state who will immediately transport the cigarettes out of this state. In such an event, the distributor must, at the time of sale and shipment, obtain from the purchaser a signed, sworn statement under penalties for false swearing. The statement shall be on the invoice. The statement shall attest (a) that the purchaser is a retailer licensed to sell cigarettes in the other state, (b) that the cigarettes are being purchased for resale in the state for which the cigarettes are stamped and (c) that the purchaser will immediately transport the cigarettes out of this state to the state for which the cigarettes are stamped.

(3) The seller shall keep a copy of the invoice in the seller's possession. Failure to retain the invoice or to obtain the sworn statement shall cause the distributor to be liable for the Oregon Cigarette Tax, together with any penalty and interest accrued, on the product sold. It shall be the seller's duty to ensure the purchaser is a licensed retailer of the other state.

(4) The department reserves the right to require such additional proof as it deems necessary in any particular case.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.030
Hist.: RD 4-1994, f. 12-15-94, cert. ef. 12-31-94

150-323.105

When Distributor's License Required

A distributor's license is required for each place of business at which a person engages in the distribution of cigarettes as defined in ORS 323.015(2). A distributor's license is required for any person distributing cigarettes in Oregon, including:

(1) Every cigarette manufacturer selling cigarettes in this state to persons other than licensed distributors;

(2) Every person who imports cigarettes into this state for sale;

(3) Every person who obtains untaxed cigarettes from a cigarette manufacturer for resale; and

(4) Common carriers engaged in interstate or foreign passenger service who sell cigarettes on their facilities in Oregon, and persons authorized to sell cigarettes on the facilities of such common carriers. For the purpose of this rule "facilities of a common carrier" are limited to the mobile equipment of the carrier used for the transportation of passengers.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.105
Hist.: 6-66; 9-71; TC 9-1980, f. 11-28-80, cert. ef. 12-31-80; REV 6-2004, f. 7-30-04, cert. ef. 7-31-04; REV 2-2014, f. & cert. ef. 7-31-14

150-323.106

Certification Applicant Will Comply with Requirements

(1) A person who files an application for a distributor's license under ORS 323.105 must include with the application a written statement certifying that the person will comply with 180.435 and 180.440 pertaining to cigarettes of certain nonparticipating manufacturers.

(2) Cigarette distributor license applications are certified under ORS 323.106 by:

(a) Hand signing the application.

(b) An electronic signature (as defined in ORS Chapter 84) associated with an application filed in electronic (as defined in ORS Chapter 84) form and successfully transmitted to the department, by the applicant.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.106
Hist.: REV 2-2014, f. & cert. ef. 7-31-14

150-323.107

When Cigarette Wholesaler's License is Required; Denial of Application

(1) Any person selling cigarettes as defined in ORS 323.010(17) must obtain a cigarette wholesaler’s license. A wholesaler must obtain a license for each place of business at which the wholesaler engages in the sale of cigarettes.

(2) The Department of Revenue may deny a license application under ORS 670.280 if there is false or incomplete information on the application or if the department determines that the applicant will not comply with the provisions of ORS 323.005 to 323.482. When deciding whether to deny a wholesaler's license, the department may consider, but is not limited to, the following factors:

(a) Whether the applicant has previously failed to pay a tobacco related tax or any other tax administered by the Oregon Department of Revenue;

(b) Whether the applicant has engaged in conduct punishable as a crime under ORS Chapter 323 or any other state's or federal tobacco laws; or

(c) Whether the applicant has violated any part of ORS Chapter 323 or any rule adopted under that chapter;

(3) If the applicant is other than an individual, the department will apply the factors described in subsection (2) both to the applicant and, if the applicant is an organization, to the individual(s) within the organization with the primary responsibility for ensuring compliance with cigarette tax laws;

(4) If the department denies a license application, the applicant has 30 calendar days from the date of denial to file an appeal in the manner provided in ORS 305.404 to 305.560.

Stat. Auth.: ORS 305.100 & 323.440
Stats. Implemented: ORS 323.107
Hist: REV 6-2004, f. 7-30-04, cert. ef. 7-31-04; REV 9-2010, f. 7-23-10, cert. ef. 7-31-10

150-323.110

Security Bond Requirements for Cigarette Distributors

(1) A purchase may not exceed a bond or other security amount if a licensee or applicant for a license elects to pay for cigarette tax stamps on deferred status. The amount of the bond or other security will be equal to the total maximum deferred payment purchase that may be made in any one calendar month.

(2) If at any time the distributor reaches its bond or security limit, the bond or security becomes ineffective, or the surety cancels the bond or security, then the distributor may only purchase stamps on a cash basis until the bond or security is renewed.

Stat. Auth.: ORS 305.100, 323.440
Stats. Implemented: ORS 323.107
Hist: REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.130

Denial of a Cigarette Distributor's License

(1) Any person engaging or seeking to engage in the sale of cigarettes as a distributor as defined in ORS 323.015 must obtain a cigarette distributor’s license. A distributor must obtain a license for each place of business at which the distributor engages in the sale of cigarettes.

(2) The Department of Revenue may deny a license application if there is false or incomplete information on the application or if the department determines that the applicant will not comply with the provisions of ORS 323.005 to 323.482. When deciding whether to deny a distributor's license, the department may consider, but is not limited to, the following factors:

(a) Whether the applicant has previously failed to pay a tobacco related tax or any other tax administered by the Oregon Department of Revenue;

(b) Whether the applicant has engaged in conduct punishable as a crime under ORS Chapter 323 or any other state's or federal tobacco laws; or

(c) Whether the applicant has violated any part of ORS Chapter 323 or any rule adopted under that chapter;

(3) If the applicant is other than an individual, the department will apply the factors described in subsection (1) both to the applicant and, if the applicant is an organization, to the individual(s) within the organization with the primary responsibility for the payment of the cigarette taxes on behalf of the applicant;

(4) If the department denies a license application the applicant has 30 calendar days from the date of denial to file an appeal in the manner provided in ORS 305.404 to 305.560.

Stat. Auth.: ORS 305.100 & 323.440
Stats. Implemented: ORS 323.107
Hist: REV 6-2004, f. 7-30-04, cert. ef. 7-31-04; REV 9-2010, f. 7-23-10, cert. ef. 7-31-10

150-323.140

Notification of Proposed Suspension or Revocation of Cigarette Distributor or Wholesaler License; Appeal; Final Notification

The Department of Revenue may suspend or revoke a distributor or wholesaler license if the department determines that the distributor or wholesaler will not comply with the provisions of ORS 323.005 to 323.482. When deciding whether to suspend or revoke a license the department may consider, but is not limited to, the following factors:

(1) Whether the distributor has failed to pay a tobacco related tax;

(2) Whether the distributor or wholesaler has engaged in conduct punishable as a crime under ORS Chapter 323 or any other state's or federal tobacco laws; and

(3) Whether the distributor or wholesaler has violated any part of ORS Chapter 323 or any rule adopted under that chapter.2) When the department decides to suspend or revoke an existing valid distributor or wholesaler license, the department will send a notice to the distributor or wholesaler of the suspension or revocation, stating the reasons for such action. The distributor or wholesaler has 30 calendar days from the date on the notice to file an appeal under ORS 305.404 to 305.560.

(4) If a distributor or wholesaler requests a hearing within the appeal period in subsection (2), the license suspension or revocation will not become effective until a final determination of the appeal by the Tax Court or the Oregon Supreme Court.

(5) If a distributor or wholesaler does not request a hearing within the appeal period in subsection (2), suspension or revocation becomes effective on the 31st day after the date on the notice of suspension or revocation.

(6) The notices described in sections (2) and (4) will be mailed to the distributor or wholesaler by certified mail, return receipt requested, using the last known address of the distributor or wholesaler. Return of the notice as undeliverable or because the distributor or wholesaler fails or refuses to pick up or accept the notices will not extend the appeal period or delay the action specified in the final notice.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.140
Hist.: REV 8-2002, f. & cert. ef. 12-31-02; REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.155 [Renumbered to 150-323.160(1)]

150-323.160 [Renumbered to 150-323.160(2)]

150-323.160(1)

Tax Stamp Units of Sale; Minimum Sales

(1) The Department of Revenue will sell cigarette tax stamps only to licensed distributors and their properly authorized employees whose signature cards are in the possession of the designated agent of the department. The department has set the minimum unit purchases for each sale as follows:

(2)(a) Heat-applied decal tax stamps for the denominated value of 20 units per pack are sold in rolls containing 30,000 stamps. The stamps are sold in full rolls only and the smallest sale unit is one roll.

(b) Heat-applied decal tax stamps for the denominated value of 25 units per pack are sold in rolls containing 7,200 stamps. The stamps are sold in full rolls only and the smallest sale unit is one roll.

(c) Heat-applied decal tax stamps for the denominated value of 20 units per pack are sold in pads containing 10 sheets of 100 stamps per sheet. The stamps are sold in full pads and the smallest sale unit is one pad of 10 sheets totaling 1,000 stamps.

Stat. Auth.: ORS 305.100 & 323.440
Stats. Implemented: ORS 323.160
Hist.: 6-66; 9-71; RD 8-1984, f. 12-5-84, cert. ef. 12-31-84; RD 5-1993, f. 12-30-93, cert. ef. 12-31-93; REV 11-1999, f. 12-30-99, cert. ef. 12-31-99; Renumbered from 150-323.155, REV 5-2004, f. 7-30-04, cert. ef. 7-31-04; REV 2-2007(Temp), f. & cert. ef. 3-21-07 thru 7-30-07; REV 5-2007, f. 7-30-07, cert. ef. 7-31-07; REV 10-2012, f. 12-18-12, cert. ef. 1-1-13; REV 3-2013, f. & cert. ef. 3-28-13

150-323.160(2)

Manner of Affixing Stamps

(1) The department will sell the following cigarette tax stamp types and denominations:

(a) A heat-applied decal tax stamp with the denominated value of 20 units per pack.

(b) A heat-applied decal tax stamp with the denominated value of 25 units per pack.

(2) Stamps must be affixed to each individual package of cigarettes, as distinguished from cartons or large containers, in an aggregate denomination not less than the amount of tax upon the contents therein.

(3) Stamps must be affixed to the bottoms of such packages in a manner that is clearly visible to subsequent purchasers. No other stamp, label, decal, mark or sign shall be affixed to or displayed on the bottom of a package of cigarettes without prior written approval from the department. If packaging is different from the typical 20 or 25 cigarette packages, written department approval specifying where the stamp(s) will be affixed is required before stamps can be affixed to the packaging. Such approval will be given only to licensed cigarette agents who agree to purchase such indicia from the department.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.160
Hist.: REV 11-1999, f. 12-30-99, cert. ef. 12-31-99; REV 8-2002, f. & cert. ef. 12-31-02; Renumbered from 150-323.160, REV 7-2004, f. & cert. ef. 8-11-04; REV 5-2007, f. 7-30-07, cert. ef. 7-31-07; REV 10-2012, f. 12-18-12, cert. ef. 1-1-13; REV 3-2013, f. & cert. ef. 3-28-13

150-323.160(3)-(A)

Definition of "Appropriate Stamp"

As required by ORS 323.160(3), an appropriate stamp must be affixed to each package of cigarettes prior to the distribution of the cigarette; for purposes of that requirement an "appropriate stamp" is considered to be more than 50 percent of a single required Oregon tax stamp.

Stat. Auth.: ORS 305.100 & 323.440
Stats. Implemented: ORS 323.160
Hist.: REV 1-2004(Temp), f. & cert. ef. 4-1-04 thru 8-1-04; Suspended by REV 2-2004(Temp), f. 4-30-04 cert. ef. 5-1-04 thru 9-30-04

150-323.160(3)-(B)

Responsibility for Affixing of Tax Stamps

(1) The distributor that first distributes cigarettes to anyone in the state of Oregon must affix the required tax stamps to the packs of cigarettes. This requirement applies to distributors that are physically located inside or outside of Oregon.

Example 1: If a distributor sells cigarettes to a dealer in Oregon, the distributor must affix the required tax stamps.

Example 2: If distributor A sells cigarettes to distributor B who is within Oregon, distributor A must affix the required tax stamps.

(2) If the distributor that first distributes cigarettes in Oregon fails to affix the required tax stamps, any subsequent distributor possessing unstamped cigarettes must affix the required tax stamps before distributing those cigarettes in Oregon.

(3) A distributor that fails to affix the tax stamps as required by section (1) may be subject to civil and criminal penalties as provided in ORS 323.480 to 323.482.

(4) Distributors are not required to affix tax stamps to cigarettes that are free from tax under ORS 323.040, 323.050, 323.055, or 323.060.

Stat. Auth.: ORS 305.100, 323.440
Stats. Implemented: ORS 323.160
Hist.: REV 8-2002, f. & cert. ef. 12-31-02; Renumbered from 150-323.160(2); REV 5-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.170

Payment Type for Cigarette Stamps

Every licensed distributor purchasing tax stamps from the department must pay for the stamps with cash, cashiers check, or money order.

Stat. Auth.: ORS 305.100, 323.440
Stats. Implemented: ORS 323.170
Hist: REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.175

Deferred Payment Purchases; Bond Requirement; Credit Authorization; Return of Bond

(1) To purchase tax stamps on a deferred payment basis a distributor must file an application with the Department of Revenue on a form prescribed by the department.

(2) A security bond must accompany the application and is to be deposited with the department as provided in ORS 323.110, or the application must be accompanied by cash or securities to be deposited with the State Treasurer as provided as provided in ORS 323.120. The amount of the bond, cash or security deposited will be the fixed amount of deferred payment purchases the distributor may make in any one calendar month.

(3) If a distributor's license is revoked by the department, or is withdrawn by the licensee, the department will direct the State Treasurer to return any security that may be held by the State Treasurer under ORS 323.120, to the former licensee after the department has determined that all liabilities owed by the distributor to the department have been paid in full.

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 323.180

Hist.: 6-66; 9-71; RD 8-1984, f. 12-5-84, cert. ef. 12-31-84; REV 6-1999, f. 12-1-99, cert. ef. 12-31-99; REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.180

Signature Cards

Before making purchases of tax indicia, the distributor shall file with the Department, on a form provided by the Department, a "cigarette tax signature card" for each designated office where the distributor may make tax indicia purchases. The distributor shall authorize in writing, on the card, those persons who may order purchases of stamps for the distributor's account at each designated office. The "cigarette tax signature card," upon authentication by the Department, shall be maintained as authority by the designated office. The distributor's authorization to the named persons shall continue in effect until written notice of revocation of the authority is delivered to the designated office in the form of a revised signature card or a letter of revocation. Signature cards will be updated periodically as determined by the Department.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.180
Hist.: 6-66; 9-71; RD 8-1984, f. 12-5-84, cert. ef. 12-31-84; REV 6-1999, f. 12-1-99, cert. ef. 12-31-99

150-323.190

Restoration of Deferred Payment Plan Privileges for Purchasing Cigarette Tax Stamps

When the privilege of purchasing tax stamps on the deferred payment plan has been suspended by the Department of Revenue as provided in ORS 323.190, the suspension will remain in effect until the department issues written notice that the deferred payment plan has been restored . Paying the delinquency alone will not necessarily restore the privilege of utilizing the deferred payment plan.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.190
Hist.: 6-66; 9-71; REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.211

Vending Machine Visibility Requirements

Packages of cigarettes shall be placed in vending machines in such a manner that, if any package is visible while in the machine, the state cigarette tax stamp affixed thereto also shall be clearly visible. Any vending machine operator who uses a machine in which the cigarette tax stamps are not visible will be required to repurchase from the Department all cigarettes purchased from his machine by the Department's agent for inspection purposes.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.211
Hist.: 6-66; 9-71, Renumbered from 150-323.230-(B); TC 9-1980, f. 11-28-80, cert. ef. 12-31-80; REV 6-1999, f. 12-1-99, cert. ef. 12-31-99

150-323.220 [Renumbered to 150-323.220-(A)]

150-323.220-(A)

Segregation of Cigarette Inventories

(1) The following rules apply to inventories of cigarettes held by distributors:

(a) Untaxed cigarettes must be stored in an area separate from cigarettes bearing tax stamps.

(b) Cigarettes stamped with the tax stamp of another state must be stored in a separate area from cigarettes bearing an Oregon tax stamp.

(2) Any dealer who serves as the dealers own distributor or who buys directly from a manufacturer and is licensed as a distributor must maintain strict separation of the wholesale and retail stocks of cigarettes and must maintain separate records of the wholesale portion of the business and keep such records, including invoices, separate and apart for the inspection of the wholesale business by the Department of Revenue. The records must show the amount of stamps purchased, stamps affixed, records of purchases of cigarettes and of all sales, whether the dealer is also acting as a distributor or retailer or selling to another retailer.

(3) The requirement to segregate cases or cartons of cigarettes under subsections (1) and (2) of this rule is satisfied if the distributor or dealer keeps the stocks of cigarettes separated by clearly marking the cases or cartons of cigarettes indicating whether the packs of cigarettes inside are taxed or untaxed, and whether they are wholesale or retail stock.

Stat. Auth.: ORS 305.100 & 323.440
Stats. Implemented: ORS 323.220
Hist.: 6-66; 9-71; REV 6-1999, f. 12-1-99, cert. ef. 12-31-99; Renumbered from 150-323.220, REV 6-2004, f. 7-30-04, cert. ef. 7-31-04; REV 10-2012, f. 12-18-12, cert. ef. 1-1-13; REV 3-2013, f. & cert. ef. 3-28-13

150-323.220-(B)

Cigarette Invoice Requirements

(1) Any “distributor” as defined in ORS 323.015(2) and any “dealer” as defined in 323.010(5) in this state must keep sales invoices related to cigarette transactions.

(2) The required sales invoice must contain the following:

(a) Name and address of the seller;

(b) Name and address of the purchaser;

(c) Date of the sale;

(d) Quantity and description of cigarette products;

(e) Price paid for cigarette products; and

(f) The applicable license identification number of the distributor and/or wholesaler.

(3) Records must be preserved for five years from the time to which it relates and must be made available for inspection by representatives of the department. Per ORS 323.245, failure to comply could result in forfeiture of cigarettes.

Stat. Auth.: ORS 305.100 & 323.220
Stats. Implemented: ORS 323.220
Hist.: REV 10-2012, f. 12-18-12, cert. ef. 1-1-13; REV 3-2013, f. & cert. ef. 3-28-13

150-323.225

Permit Required for Transportation of Untaxed Cigarettes Inside Oregon

(1) Transporters, as defined in ORS 323.010(14), must apply to the department for a permit to transport untaxed cigarettes on Oregon highways, roads or streets. This application must be on the form prescribed by the department and must be submitted to the department no less than one working day before the first transportation of untaxed cigarettes. The application must include:

(a) The applicant's name, address and telephone number;

(b) The beginning and ending dates of the period to be covered by the permit;

(c) The maximum number of loads or shipments the transporter may transport under the permit;

(d) The method of transportation;

(e) The location of detailed records concerning the transportation of untaxed cigarettes under the permit, including where each shipment of untaxed cigarettes was picked up and delivered; and

(f) The name and telephone number of the person the department can contact to examine the records referred to in subparagraph (e).

(2) The department will either approve or deny the application and return it to the applicant before the first shipment is made under the permit. An approved application constitutes a permit. The original or a photocopy of the permit must be carried in the vehicle transporting the untaxed cigarettes. The permit holder must notify the department of any change in the information required on the application before the first transportation of untaxed cigarettes after such information changes. A new permit must be obtained if the name of the permit holder changes.

(3) No transporter may transport untaxed cigarettes in this state without a permit from the department.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.225
Hist.: 6-66; 9-71; RD 8-1984, f. 12-5-84, cert. ef. 12-31-84; REV 4-2000, f. & cert. ef. 5-1-00

150-323.320-(A)

Cigarettes Damaged in Transit

The following procedure may be used in lieu of payment of tax and claim for refund:

(1) Untaxed cigarettes damaged while being transported from the manufacturer to a bonded warehouse may be:

(a) Returned to the manufacturer without the imposition of any tax; or

(b) Accepted by a bonded warehouse for the manufacturer who must affix tax paid indicia before they may be returned to the carrier for salvage. Cigarettes damaged to the extent that indicia cannot be affixed and not returned to the manufacturer or otherwise disposed of outside of Oregon, must be accepted and retained by the warehouse until they can be destroyed in the presence of a representative of the Department.

(2) Untaxed cigarettes damaged while being transported between a bonded warehouse and a licensed distributor must be accepted by the distributor for the purpose of affixing tax paid indicia. They may be returned to the carrier for salvage purposes only after such indicia has been affixed. Cigarettes damaged to the extent that indicia cannot be affixed and not returned to the manufacturer or otherwise disposed of outside of Oregon, must be accepted and retained by the distributor until they can be destroyed in the presence of a representative of the Department.

(3) Untaxed cigarettes damaged while being transported from a point outside Oregon to a consignee, other than a bonded warehouse within Oregon, may either be returned to the consignor without the imposition of any tax, or may be accepted by the consignee for the purpose of affixing tax indicia before being returned to the carrier for salvage purposes. Cigarettes damaged to the extent that indicia cannot be affixed and which are not returned to the consignor or otherwise disposed of outside of Oregon must be accepted and retained by the consignee until they can be destroyed in the presence of a representative of the Department.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.320
Hist.: 6-66; 9-71; 12-31-80, Renumbered from 150-323.230; RD 8-1984, f. 12-5-84, cert. ef. 12-31-84

150-323.320-(B)

Refund of Value of Unused or Mutilated, but Identifiable, Stamps

When accompanied by a properly executed claim for refund, on forms supplied by the Department, a refund equal to the denominated value, less the discount allowed, will be made on all returned, unused or mutilated, but identifiable, cigarette revenue stamps.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.320
Hist.: 12-19-75; REV 6-1999, f. 12-1-99, cert. ef. 12-31-99; Renumbered from 150-323.320(1), REV 8-2008, f. 8-29-08, cert. ef. 8-31-08

150-323.320-(C)

Refund Value of Stamps on Unsalable and Misstamped Cigarette Packages and Cartons

(1) Refund provisions of the cigarette tax act apply only to duly licensed Oregon cigarette distributors. Unsalable stamped cigarettes may include product no longer approved for sale in Oregon, stale product, or product inventory of a closed business. Refund certification appointments are scheduled at the discretion of the department. Misuse of this provision may cause license revocation. Cigarette stamp refunds outside of Oregon must be certified by an appointed representative of the department. A refund equal to the face value, less the discount allowed, on identifiable stamps affixed to unsalable packages of cigarettes may be obtained as follows:

(2) Unsalable stamped cigarette packages re-stamped for sale outside Oregon. An appointment for refund certification must be made with the department. A department representative will cancel the Oregon indicia in such a manner as to permanently identify the packages. Indicia from the state into which those packages will be sold must be affixed to the packages during the certification appointment. The request for refund must be sent to the department and be accompanied by the properly executed certification completed by the department.

(3) Unsalable stamped cigarette packages to be sold outside Oregon. An appointment for refund certification must be made with the department. A department representative will cancel the Oregon indicia in such a manner as to permanently identify the packages. The request for refund must be sent to the department and be accompanied by a copy of the shipping document used to send the cigarettes to the purchasing party, and any other proof of the cigarettes not being used for smoking in the State of Oregon.

(4) Unsalable stamped cigarette packages to be destroyed. An appointment for refund certification must be made with the department. A department representative will cancel the Oregon indicia in such a manner as to permanently identify the packages. Packages of cigarettes must be destroyed during the certification appointment and in the presence of an appointed representative of the department. The request for refund must be sent to the department and be accompanied by the properly executed certification completed by the department.

(5) Unsalable stamped cigarette packages returned to the manufacturer. The claim for refund must be sent to the department on a form supplied by the department and be accompanied by a properly executed manufacturer's statement of returned cigarettes and a copy of the shipping document used to return the cigarettes to the manufacturers.

(6) Misstamped cigarette packages, where at least fifty percent of a stamp is affixed to a cigarette package. An appointment for refund certification must be made with the department. A department representative will cancel the partial indicia inadvertently affixed to packages of cigarettes in a manner as to permanently identify the packages. Indicia from the state into which those packages will be sold must be affixed to the packages during the certification appointment. The request for refund must be sent to the department and be accompanied by the properly executed certification completed by the department.

(7) Misstamped cigarette packages, where more than one stamp is affixed to a cigarette package. An appointment for refund certification must be made with the department. A department representative will cancel the duplicated indicia inadvertently affixed to packages of cigarettes in a manner as to permanently identify the packages. The request for refund must be sent to the department and be accompanied by the properly executed certification completed by the department.

(8) Misstamped, where stamps are affixed to packaging. The request for refund must be sent to the department and be accompanied by the packaging to which indicia was inadvertently affixed.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.320
Hist.: 12-19-75; RD 8-1984, f. 12-5-84, cert. ef. 12-31-84; REV 6-1999, f. 12-1-99, cert. ef. 12-31-99; Renumbered from 150-323.320(2), REV 5-2008, f. 8-29-08

150-323.325

Refund of Overpayments

Refund of overpayments on a Distributor's Cigarette Tax Account may be made when an audit determines a net overpayment has been made during the audit period, and the distributor files a claim for such refund within six months of the date the determination was made. No refund shall be allowed after three years from the date of any overpayment.

Stat. Auth.: ORS 305.100
Stat. Implemented: ORS 323.325
Hist.: 12-31-81

150-323.340

Distributor's Reports-Generally

(1) On or after January 1, 2000, every distributor shall quarterly file, on or before the 20th day of April, July, October and January, on forms prescribed by the department, reports containing such information as is required on the form including:

(a) Information as to the acquisition by the distributor of cigarettes which, at the date of receipt by the distributor, have not had the tax stamps affixed as required by ORS 323.160.

(b) Information as to the disposition by the distributor of cigarettes which are not subject to the tax imposed by this chapter.

(Example: Cigarettes transported from the State of Oregon to points within another state).

A separate report will be required for each state or tax exempt unit to which shipments are made.

(c) Information regarding the purchase and distribution of cigarettes, showing the number of cigarettes on hand at the beginning and end of the period, the number of cigarettes purchased during the period and the number of cigarettes distributed during the period.

(d) Information regarding the inventory of stamps, showing the number of stamps at the beginning and end of the period, the number of cigarettes purchased during the period and the number affixed during the period.

(2) Any person or firm classified as a distributor under ORS 323.015(1)(d) and 323.015(2)(a) solely by reason of operating one or more vending machines will not be required to file any reports specified in this section unless requested to do so by the department if:

(a) The distributor purchases only tax-paid cigarettes as evidenced by properly affixed indicia from distributors licensed by this state;

(b) The distributor engages solely in the activity of placing cigarettes in such vending machines;

(c) The distributor is not engaged in any other cigarette sales activity in this state; and

(d) The distributor is not otherwise a licensed distributor authorized to receive and handle untaxed cigarettes as a distributor.

(3) The distributor shall retain the detailed documents including, but not limited to, purchase invoices, sales invoices and bills of lading, used in preparing the reports required by this section. In the case of cigarettes for foreign export, copies of the Shippers Export Declaration filed with the Collector of Customs or other documentary evidence of export shall also be retained. All documents so retained shall be made available for inspection by authorized employees of the Department of Revenue.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.340
Hist.: 6-66; 9-71; REV 11-1999, f. 12-30-99, cert. ef. 12-31-99, Renumbered from 150-323.340-(A)

150-323.343

Reports of Cigarette Tax Activity in Oregon

(1) A person who engages in cigarette tax activity in this state, as defined in ORS 323.010(2) and this rule, but who is not licensed to distribute cigarettes in Oregon, must file with the Department of Revenue reports prescribed by the department on or before the 20th day of January, April, July and October. Those reports must contain the following information regarding each shipment of cigarettes that occurred during the quarter:

(a) The business name, address and identification number of the person engaging in cigarette activity;

(b) The source and destination of the shipment of cigarettes;

(c) The transporter's business name and address;

(d) The dates the cigarettes were shipped;

(e) The total number of cigarettes shipped into and the total number of cigarettes shipped out of Oregon;

(f) The number of cigarettes in the taxpayer's inventory that were located in Oregon at the beginning of the quarter and the number of cigarettes in the taxpayer's inventory that were located in Oregon at the end of the quarter; and

(g) Other information requested on the department's form.

(2) For purposes of this rule, the following are presumed not to constitute "cigarette tax activity in this state":

(a) Transporting a sealed shipment of cigarettes through Oregon in a continuous process under authority of a Motor Property Carrier and Broker Certificate of Authority issued by the Federal Motor Carrier Safety Administration; or

(b) Storing a sealed shipment of cigarettes in a public warehouse or other public storage facility that is owned by a person who is not the owner of the cigarettes and who has no intent to sell the cigarettes either within or without this state.

(3) For purposes of this rule, transferring or breaking up a shipment of cigarettes to more than one vehicle or more than one carrier or unsealing a sealed shipment of cigarettes in Oregon is presumed to show intent to sell cigarettes either within or without this state.

Example 1: AB Partnership is not licensed to distribute cigarettes in Oregon. The partnership purchases cigarettes in California and transports them by common carrier from California to Washington State. The load is sealed at the point of departure in California and is transported to Washington where it is unsealed and the contents verified with the bill of lading. AB Partnership is not required to file a report under this provision.

Example 2: Same facts as Example 1, except that the trailer containing the shipment is dropped at the carrier's terminal in Medford, Oregon where it is picked up by another driver or carrier and transported to Washington state where it is unsealed and the contents verified. No report is required under this provision.

Example 3: Same facts as Example 2, except that the shipment is unsealed at the Medford terminal and reloaded into smaller delivery vans. Part of the original shipment is sent to Washington and part is sent to Idaho. The owner of the cigarettes, AB Partnership, is required to file a report under this provision because the continuous process of transportation through the state was broken when the shipment was unsealed while in Oregon.

Stat. Auth.: ORS 305.100
Stat. Implemented: ORS 323.343
Hist.: REV 3-2002, f. 6-26-02, cert. ef. 6-30-02

150-323.365(1)

Extension of Time for Reports

The time for making or filing a cigarette tax report under this chapter may be extended for one month providing the taxpayer provides a written request for extension within or prior to the period for which an extension may be granted, and certain conditions are met, including but not limited to:

(1) Information required to complete the report is not available or is not in the proper form;

(2) Unexpected or unavoidable absence of the person responsible for preparing the report; or

(3) For other reasons beyond the taxpayer's control the report cannot be submitted timely.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.365
Hist.: RD 6-1985, f. 12-26-85, cert. ef. 12-31-85

150-323.390(1)

Collection of Unsecured, Unpaid Tax After Deficiency or Jeopardy Determination; Collection Charge; Warrants

The provisions of OAR 150-314.430(1)-(B) shall be followed to secure payment of deficiency determinations given under ORS 323.380(6) and of taxes determined under ORS 323.385. The amount of the deficiency or tax shall be the "amount assessed" referred to in OAR 150-314.430(1)-(B).

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.390
Hist.: RD 8-1984, f. 12-5-84, cert. ef. 12-31-84

150-323.480(1) [Renumbered to 150-323.480(1)-(A)]

150-323.480(1)-(A)

Civil Penalties for Violation of Cigarette Tax Provisions

(1) The Department of Revenue may impose civil penalties on any person who violates any provision of cigarette tax law. The violations include, but are not limited to, those described under subsection (3) of this rule.

(2) The following civil penalties will be imposed on a per incident basis for the violations in subsection (3) of this rule:

Incident -- Penalty not to exceed

First -- Warning notice

Second -- $250

Third -- $500

Fourth and subsequent -- $1,000

(3) The civil penalties outlined in subsection (2) of this rule may be imposed for the following violations of ORS 323.005 to 323.482:

(a) ORS 323.060: Failure by a user or consumer to pay tax;

(b) ORS 323.105: Failure by a distributor to apply for and obtain a distributor's license;

(c) ORS 323.107: Failure by a wholesaler to apply for and obtain a wholesaler's license and make, preserve and supply records;

(d) ORS 323.130: Failure to display a license at the business location for which it was issued;

(e) ORS 323.165(1): Failure to obtain written approval from the Department of Revenue before selling, exchanging, or transferring unaffixed stamps to another person;

(f) ORS 323.170: Failure by a distributor to pay for stamps as provided in ORS 323.005 to 323.482 and failure by a distributor to notify the department of the number of packages of cigarettes to which the distributor affixes a stamp;

(g) ORS 323.185(1): Failure of the distributor to make payments of amounts owing for stamps purchased on the deferred-payment basis;

(h) ORS 323.205: Failure of manufacturers selling and shipping cigarettes into this state to other than a licensed distributor to:

(A) Deliver a written statement with each sale or consignment of cigarettes,

(B) Deliver a duplicate of that statement to the Department of Revenue, and

(C) File each cancellation or modification of the written statement and any other information necessary to the reconciliation of accounts with the Department of Revenue,

(i) ORS 323.211: Failure of distributors, dealers, and other persons engaging in the sale of cigarettes through the use of a vending machine(s) to affix the statutorily required card or decal in a conspicuous place on each machine;

(j) ORS 323.215: Failure of distributors, dealers, and other persons selling cigarettes through a vending machine(s) to keep detailed records of each machine showing the location of the machine and the date the machine was placed in that location;

(k) ORS 323.220: Failure of distributors and persons dealing in, transporting or storing cigarettes in this state to:

(A) Keep on premises records, receipts, invoices, and other pertinent papers, and

(B) Refrain from destroying records if so ordered by the Department of Revenue;

(l) ORS 323.225: Failure of transporters seeking to possess or acquire untaxed cigarettes for transportation or transport upon highways, roads, or streets of this state to:

(A) Obtain and keep a permit in the transporting vehicle during the transportation of the cigarettes, and

(B) Have the required invoices or bill of lading in the transporting vehicle;

(m) ORS 323.335: Failure of:

(A) Distributors to pay tax,

(B) Taxpayers other than licensed distributors to pay tax, and

(C) Common carriers and persons authorized to sell cigarettes on the facilities of common carriers to pay tax;

(n) ORS 323.340(1): Failure of licensed distributors to file reports;

(o) ORS 323.343: Failure of any person not a distributor, who had cigarette activity in this state, to file a report;

(p) ORS 323.355: Failure of common carriers and persons authorized to sell cigarettes on the facilities of common carriers to file reports and submit payment of tax due with the reports; and

(q) ORS 323.360: Failure of a consumer or user subject to the tax resulting from a distribution of cigarettes to file reports and submit payment of the tax due with the reports.

(4) The department may consider the following factors when deciding the civil penalty under this rule:

(a) Number of previous inspections held by the Department of Revenue at the place of business;

(b) Number of previous violations of Chapter 323 provisions;

(c) Size of business; and

(d) Any other factors or information the department considers relevant to its determination.

(5) A civil penalty authorized by ORS 323.480(1) and this rule may be imposed on any person, as defined in ORS 323.010, who is responsible for complying with ORS 323.005 to 323.482.

Stat. Auth.: ORS 305.100 & 323.440
Stats. Implemented: ORS 323.480
Hist.: REV 3-2002, f. 6-26-02, cert. ef. 6-30-02; REV 1-2004(Temp), f. & cert. ef. 4-1-04 thru 8-1-04, Renumbered from 150-323.480(1); REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.480(1)-(B)

Civil Penalties for Violation of Cigarette Tax Stamping Provisions

(1) The Department of Revenue may assess a civil penalty against any person who is required to comply with ORS 323.005 to 323.482 and who:

(a) Fails to prepay cigarette taxes by purchasing stamps from the department and affixing the stamps to unstamped packages of cigarettes prior to distributing those cigarettes, as required by Oregon Laws 2003, chapter 804, section 3; or

(b) Fails to affix an appropriate stamp to each package of cigarettes prior to distribution of the cigarettes, as required by ORS 323.160(3).

(2) For purposes of ORS 323.480 and this rule, each pack of cigarettes distributed in violation of ORS 323.005 to 323.482 constitutes a separate violation and is subject to penalty as follows:

Incident -- Penalty not to exceed -- Minimum Penalty

First -- Warning notice

Second -- $10 per pack -- $1,000

Third -- $50 per pack -- $1,000

Fourth -- $100 per pack -- $1,000

Fifth and subsequent -- $1,000 per pack -- $1,000

NOTE: Distributors will be assessed a minimum penalty of $1,000 for the second and any subsequent incidents.

(3) The department may consider the following factors when determining the civil penalty under this rule:

(a) Number of previous inspections by the Department of Revenue held at the business;

(b) Number of previous violations of chapter 323 provisions;

(c) Size of business; and

(d) Any other information the department considers relevant to its determination.

Stat. Auth.: ORS 305.100 & 323.440
Stats. Implemented: ORS 323.480
Hist.: REV 1-2004(Temp), f. & cert. ef. 4-1-04 thru 8-1-04; REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.500(9)

Definition of Moist Snuff

(1) The provisions of this rule apply to distributions of tobacco products that occur after June 30, 2010.

(2) For purposes of ORS 323.500 through 323.645, “moist snuff” means:

(a) Any finely cut, ground, milled or powdered tobacco product that is not intended to be smoked or placed in the nasal cavity. It may or may not be contained within small, tea-bag like pouches. Words such as long cut, mid cut, fine cut and snus only describe minor differences of product that fit within this tobacco category.

(b) Any other products containing tobacco that are not intended to be consumed by combustion. Examples include, but are not limited to:

(A) Dissolvable tobacco, which consists of finely-processed tobacco developed in such a way as to allow the substance to dissolve on the tongue or in the mouth and includes strips, sticks, orbs, and compressed tobacco lozenges.

(B) Other chewing tobacco and other leaf tobacco products to which artificial or natural substances have been added during processing. Such substances may include but are not limited to: sweeteners, sugars, molasses, licorice, mint, eucalyptus, tobacco leaf extract, betel nut, catchu, lime, saffron, thickeners, humectants, emulsifiers, colorants, texturizers, preservatives, taste enhancers, firming agents, adhesives, and punk ash. Examples include, but are not limited to:

(i) Shredded tobacco leaves, such as those sweetened and packaged loosely in aluminum lined pouches;

(ii) Plug tobacco, such as enriched tobacco leaves flavored and sweetened with licorice and formed into bricks or flat blocks; and

(iii) Twist tobacco, such as tobacco that is spun and rolled into rope-like strands and to which tobacco leaf extract has been added.

Stat. Auth.: ORS 305.100 & 323.575
Stats. Implemented: ORS 323.500
Hist.: REV 7-2009(Temp), f. & cert. ef. 10-7-09 thru 3-31-10; REV 10-2009, f. 12-21-09, cert. ef. 1-1-10; REV 7-2010(Temp), f. 5-27-10, cert. ef. 6-30-10 thru 12-27-10; REV 18-2010, 12-17-10, cert. ef. 1-1-11

150-323.505

Quarterly Tax Discount

Each tobacco distributor shall retain one and one-half percent of the tax due and payable each quarter as an allowance to offset the distributor's cost of recordkeeping and reporting.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.505
Hist.: RD 6-1985, f. 12-26-85, cert. ef. 12-31-85

150-323.505(2)

Determining Wholesale Sales Price

(1) In a transaction between parties who are not related or affiliated and who are presumed to have roughly equal bargaining power, the wholesale sales price is the price paid by the purchaser for the untaxed tobacco products.

(2) If a seller and purchaser are related or affiliated or presumed not to have roughly equal bargaining power, the wholesale sales price is determined based upon comparable wholesale distributors' arm’s-length wholesale transactions of similar tobacco products sold to retailers that meet the requirements of section (1).

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.505
Hist: REV 5-2008. f. 8-29-08, cert. ef. 8-31-08

150-323.510

Extension of Time for Filing Returns

The time for making or filing a Tobacco Tax Return as required by this chapter may be extended for one month providing the taxpayer provides a written request for extension within or prior to the period for which an extension may be granted, and certain conditions are met, including but not limited to:

(1) Information required to complete the return is not available or is not in the proper form;

(2) Unexpected or unavoidable absence of the person responsible for preparing the return; or

(3) For other reasons beyond the taxpayer's control the return cannot be submitted timely.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.510
Hist.: RD 6-1985, f. 12-26-85, cert. ef. 12-31-85

150-323.515

Exemptions Defined

The taxes imposed by the Tobacco Products Tax Act shall not apply to tobacco products which are stored in a bonded warehouse and which are nontax paid under the provisions of chapter 52 of the Internal Revenue Act of 1954, as amended, or which are sold to United States Army, Air Force, Navy, Marine Corps, or Coast Guard exchanges or commissaries and Navy or Coast Guard ship's stores, and United States Veterans Administration ship's stores maintained under federal bond.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.515
Hist.: RD 6-1985, f. 12-26-85, cert. ef. 12-31-85

150-323.520

When Tobacco Product Distributor's License Required

A distributor's license is required for each place of business at which a person engages in the distribution of tobacco products as defined in ORS 323.500. A tobacco product distributor's license is required for any person distributing tobacco products in Oregon, including:

(1) Bringing or causing to be brought, into this state, tobacco products for sale, storage, use or consumption;

(2) Making, manufacturing, or fabricating tobacco products in this state for sale, storage, use or consumption in this state;

(3) Shipping or transporting tobacco products to retail dealers in this state, to be sold, stored, used or consumed by those retail dealers in this state;

(4) Storing untaxed tobacco products in this state that are intended to be for sale, use or consumption in this state; or

(5) Selling untaxed tobacco products in this state.

(6) A person who files an application for a distributor's license under ORS 323.520 must include with the application a written statement certifying that the person will comply with ORS 180.483 and 180.486 pertaining to tobacco of certain nonparticipating manufacturers.

(7) Tobacco distributor license applications are certified under ORS 323.520 by:

(a) Hand signing the application.

(b) An electronic signature (as defined in ORS chapter 84) associated with an application filed in electronic (as defined in ORS chapter 84) form and successfully transmitted to the department, by the applicant.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.520
Hist.: RD 6-1985, f. 12-26-85, cert. ef. 12-31-85; REV 6-2004, f. 7-30-04, cert. ef. 7-31-04; REV 2-2014, f. & cert. ef. 7-31-14

150-323.525

Bonding Requirement

Whenever a licensee fails to furnish a tobacco tax return in two consecutive calendar quarters, or fails to pay the tobacco products tax in full in two consecutive calendar quarters, the licensee shall be required to post security in the form of a surety bond in an amount equal to twice that licensee's average quarterly tobacco tax liability.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.525
Hist.: RD 6-1985, f. 12-26-85, cert. ef. 12-31-85

150-323.530

Other Tobacco Product (OTP) Distributor License Application Denial

(1) Any person engaging or seeking to engage in the sale of other tobacco products as a distributor, as defined in ORS 323.500(6), must obtain an OTP distributor’s license. A distributor must obtain a license for each place of business at which the distributor engages in the sale of other tobacco products.

(2) The Department of Revenue may deny a license application if there is false or incomplete information on the application or if the department determines that the applicant will not comply with the provisions of ORS 323.500 to 323.640. When deciding whether to issue or deny a distributor's license, the department may consider, but is not limited to, the following factors:

(a) Whether the applicant has previously failed to pay a tobacco related tax or any other tax administered by the Oregon Department of Revenue;

(b) Whether the applicant has engaged in conduct punishable as a crime under ORS Chapter 323 or any other state's or federal tobacco laws;

(c) Whether the applicant has violated any part of ORS Chapter 323 or any rule adopted under that chapter.

(3) If the applicant is other than an individual, the department will apply the factors described in subsection (1) both to the applicant and, if the applicant is an organization, to the individual(s) within the organization with the primary responsibility for the payment of the tobacco taxes on behalf of the applicant;

(4) If the department denies a license application, the distributor has 30 calendar days from the date of denial to file an appeal in the manner provided in ORS 305.404 to 305.560.

Stat. Auth.: ORS 305.100 & 323.575
Stats. Implemented: ORS 323.530
Hist: REV 6-2004, f. 7-30-04, cert. ef. 7-31-04; REV 9-2010, f. 7-23-10, cert. ef. 7-31-10

150-323.535

Suspension or Revocation of Other Tobacco Product Distributors License; Appeal; Final Notification

(1) The Department of Revenue may suspend or revoke a distributor license if the department determines that the distributor will not comply with the provisions of ORS 323.500 to 323.640. When deciding whether to suspend or revoke a license the department may consider, but is not limited to, the following factors:

(a) Whether the distributor has failed to pay a tobacco related tax;

(b) Whether the distributor has engaged in conduct punishable as a crime under ORS chapter 323 or any other state's or federal tobacco law; and

(c) Whether the distributor has violated any part of ORS chapter 323 or any rule adopted under that chapter.

(2) When the department decides to suspend or revoke an existing valid license, the department will send a notice to the distributor of the suspension or revocation, stating the reasons for such action. The distributor has 30 calendar days from the date on the notice to file an appeal under ORS 305.404 to 305.560.

(3) If a distributor requests a hearing within the appeal period in subsection (2), the license suspension or revocation will not become effective until a final determination of the appeal by the Tax Court or the Oregon Supreme Court.

(4) If a distributor does not request a hearing within the appeal period in subsection (2) suspension or revocation becomes effective on the 31st day after the date on the notice of suspension or revocation.

(5) The notices described in sections (2) and (4) will be mailed to the distributor by certified mail, return receipt requested, using the last known address of the distributor. Return of the notice as undeliverable or because the distributor fails or refuses to pick up or accept the notices will not extend the appeal period or delay the action specified in the final notice.

Stat. Auth.: ORS 305.100, 323.575
Stats. Implemented: ORS 323.535
Hist: REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.540

Definitions

As used in ORS 323.540, "pertinent papers" includes invoices of purchase or sale, bills of lading, receipts, reports of tax exempt shipments, and Tobacco Tax returns.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.540
Hist.: RD 6-1985, f. 12-26-85, cert. ef. 12-31-85

150-323.560

Credit for Tobacco Tax Paid; Refund

(1) Credit for tax paid will be allowed when tobacco products are:

(a) Shipped to a point outside this state, pursuant to a contract of sale, and delivered by the seller to such out-of-state point by means of:

(A) The United States mail; or

(B) A common carrier licensed by the Federal Highway Administration; or

(C) Facilities operated by the seller.

(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 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.

(d) Sold for use as ship's supplies which are to be consumed or resold on the high seas or in foreign countries.

(2) Oregon distributors claiming credit for tax on tobacco products on the ground that shipments or deliveries were made in interstate commerce must certify, under penalties for false swearing, the name and address of the persons receiving such shipments or deliveries outside this state. Also, the Oregon distributors must be in possession of delivery data of the following descriptions:

(a) A waybill, bill of lading or other evidence of shipment issued by a common carrier in the case of shipments by common carrier; or

(b) An insurance receipt or registry receipt issued by the United States Postal Service; or

(c) A copy of the sellers invoice covering the sale, showing delivery by the seller at a designated out-of-state address, and signed by the purchaser or the purchaser's agent in the case of shipments by facilities operated by the seller. The department reserves the right to require such additional proof as it deems necessary in any particular case.

(3) Reports of such exempt sales must be maintained as provided in ORS 323.510. The tax applies to the transaction if the tobacco products are diverted in transit or for any other reason are not actually delivered outside the state pursuant to the contract of sale or are not shipped abroad to a foreign purchaser, regardless of documentary evidence held by the distributor.

(4) Tobacco products are not considered to be sold in interstate commerce and therefore are not exempt from tobacco tax if the product is received by a purchaser or agent (other than a common carrier) in this state.

(5) Failure to keep any reports, waybills, bills of lading, or other documents required by this rule is justification for the Department of Revenue to impose a tax on any tobacco products claimed to be shipped out of Oregon and exempt under this rule. Any tax imposed on these grounds will be cancelled upon actual proof to the department that the reports, waybills, bills of lading or other documents were in fact issued and the tobacco products were in fact shipped out of Oregon and were exempt under this rule.

(6) Credit claimed as provided in this rule will be in the form of a deduction on the next regularly scheduled quarterly tobacco tax return. Whenever a tobacco distributor ceases operation as a licensed tobacco distributor any credit accrued but not yet claimed may be deducted on the final tax return. Refund of overpayments on a distributor's tobacco tax account is allowed when an audit determines a net overpayment has been made during the audit period. Refunds are also allowed if a distributor determines a net overpayment has been made and claims the refund by filing an amended tobacco tax return for the period in which the overpayment occurred. No refund is allowed after three years from the date of any overpayment.

Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 323.560
Hist.: RD 6-1985, f. 12-26-85, cert. ef. 12-31-85; RD 1-1986(Temp), f. & cert. ef. 4-25-86; RD 3-1986, f. & cert. ef. 7-2-86; REV 6-2000, f. & cert. ef. 8-3-00

150-323.630-(A)

Civil Penalties for Violation of Other Tobacco Products Tax

(1) The Department of Revenue may impose civil penalties on any person who violates any provision of Other Tobacco tax law. The violations include, but are not limited to, those described under subsection (3) of this rule.

(2) The following civil penalties will be imposed on a per incident basis for the violations in subsection (3) of this rule:

Incident -- Penalty not to exceed

First -- Warning notice

Second -- $250

Third -- $500

Fourth and subsequent -- $1,000

(3) The civil penalties outlined in subsection (2) of this rule may be imposed for the following violations of ORS 323.500 to 323.645:

(a) ORS 323.520: Failure by a distributor to apply for and obtain a distributor's license;

(b) ORS 323.530: Failure to display a license at the business location for which it was issued;

(c) ORS 323.538: Failure by distributor to provide a sales invoices containing the following:

(A) Name and address of the seller;

(B) Name and address of the purchaser;

(C) Quantity and product description of the tobacco products

(D) Price paid for the tobacco products;

(E) Any discount applied in determining the price paid for the tobacco products;

(F) The applicable license identification number for the distributor;

(G) A certified statement by the distributor that all taxes due under ORS 323.500 to 323.645 have been or will be paid.

(d) ORS 323.540: Failure of distributors or any persons dealing in, transporting or storing tobacco products in this state to:

(A) Keep on premises records, receipts, and invoices of product held, purchased, manufactured, brought in or caused to be brought in from outside this state or shipped or transported to retail dealers in this state, and of all sales of tobacco products made , except to consumers; and

(B) Keep all books and records for the required five years after initial date of sale.

(4) The department may consider the following factors when deciding the civil penalty under this rule:

(a) Number of previous inspections held by the Department of Revenue at the place of business;

(b) Number of previous violations of Chapter 323 provisions;

(c) Size of business; and

(d) Any other factors or information the department considers relevant to its determination.

(5) A civil penalty authorized by ORS 323.630 and this rule may be imposed on any distributor, as defined in ORS 323.500(7), who is responsible for complying with ORS 323.500 to 323.645.

Stat. Auth.: ORS 305.100, 323.575
Stats. Implemented: ORS 323.630
Hist: REV 2-2004(Temp), f. 4-30-04 cert. ef. 5-1-04 thru 9-30-04, REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

150-323.630-(B)

Civil Penalties for Failure to Pay Other Tobacco Products Tax

(1) The Department of Revenue may assess a civil penalty against any person who is required to comply with ORS 323.500 to 323.645 and who fails to pay the other tobacco products tax.

(2) For purposes of ORS 323.630 and this rule, each tobacco product distributed in violation of ORS 323.500 to 323.645 constitutes a separate violation and is subject to penalty as follows:

(a) Incident -- Penalty not to exceed -- Minimum Penalty

First -- Warning notice

Second -- $10 per item -- $1,000

Third -- $50 per item -- $1,000

Fourth -- $100 per item -- $1,000

Fifth and subsequent -- $1,000 per item -- $1,000

(b) Distributors will be assessed a minimum penalty of $1,000 for the second and any subsequent incidents.

(3) The department may consider the following factors when determining the civil penalty under this rule:

(a) Number of previous violations of ORS Chapter 323 provisions;

(b) Frequency of violations and time since the last violation; and

(c) Any other information the department considers relevant to its determination.

Stat. Auth.: ORS 305.100, 323.575
Stats. Implemented: ORS 323.630
Hist: REV 6-2004, f. 7-30-04, cert. ef. 7-31-04

The official copy of an Oregon Administrative Rule is contained in the Administrative Order filed at the Archives Division, 800 Summer St. NE, Salem, Oregon 97310. Any discrepancies with the published version are satisfied in favor of the Administrative Order. The Oregon Administrative Rules and the Oregon Bulletin are copyrighted by the Oregon Secretary of State. Terms and Conditions of Use

Oregon Secretary of State • 136 State Capitol • Salem, OR 97310-0722
Phone: (503) 986-1523 • Fax: (503) 986-1616 • oregon.sos@state.or.us

© 2013 State of Oregon All Rights Reserved​