Tobacco distributor licenses; application; conditions; revocations, suspensions
A. Every distributor acquiring or possessing for the purpose of making
the initial sale or distribution in this state of any tobacco products
on which a tax is imposed by this chapter shall obtain from the department
a license to sell tobacco products. The application for the license shall
be in the form provided by the department and shall be accompanied by
a fee of twenty-five dollars for each place of business listed in the
application. The form shall state that the identity of the applicant may
be posted to the department's website for public inspection. The application
for a license shall include the applicant's name and address, the
applicant's principal place of business, all other places of business
where the applicant's business is conducted for the purpose of making
the initial sale or distribution of tobacco products in this state, including
any location that maintains an inventory of tobacco products and any other
information required by the department. If the applicant is a firm, partnership,
limited liability company, limited liability partnership or association,
the applicant shall list the name and address of each of the applicant's
members. If the applicant is a corporation, the application shall list
the name and address of the applicant's officers and any person who
directly or indirectly owns an aggregate amount of ten percent or more
of the ownership interest in the corporation. If a licensee changes its
business location, the licensee under this subsection shall notify the
department within thirty days after a change in location. If the licensee
is making a change in its business location by adding or replacing one
or more additional places of business that are not currently listed on
its application, the licensee must remit a fee of twenty-five dollars
for each additional place of business.
B. For the purposes of subsection A of this section, an applicant with
a controlling interest in more than one business engaged in activities
as a distributor shall apply for a single license encompassing all such
businesses and list each place of business in its application. For the
purposes of this subsection, "controlling interest" means direct
or indirect ownership of at least eighty percent of the voting shares
of a corporation or of the interests in a company, business or person
other than a corporation.
C. The department shall issue a license authorizing the applicant to acquire
or possess tobacco products in this state upon the condition that the
applicant complies with this chapter and the rules of the department.
1. Shall be nontransferable. A licensee may not transfer its license to
a new owner when selling its business, and any court-appointed trustee,
receiver or other person shall obtain a license in its own name in cases
of liquidation, insolvency or bankruptcy if the business remains in operation
as a distributor of tobacco products. A licensee shall apply for a new
license if it changes its legal entity status or otherwise changes the
legal structure of its business.
2. Shall be valid for one year unless earlier revoked by the department.
3. Shall be displayed in a conspicuous place at the licensee's place
of business. If the licensee operates from more than one place of business,
the licensee must display a copy of its license in a conspicuous place
at each location.
D. As a condition of licensure under this section, an applicant agrees
to the following conditions:
1. A person may not hold or store any tobacco products, whether within
or outside of this state, for sale or distribution in this state by or
on behalf of a distributor at any place other than a location that has
been disclosed to the department pursuant to subsection A of this section.
This paragraph does not include a person holding or storing tobacco products
by or on behalf of the distributor when the tobacco products are in transit
to a distributor or retailer as part of a lawful sale.
2. All tobacco products held or stored, whether within or outside of this
state, for sale or distribution in this state by or on behalf of a distributor
shall be accessible to the department during normal business hours without
a judicial warrant or prior written consent of the distributor, excluding
E. A person who is convicted of an offense described in section 42-1127,
subsection E is permanently ineligible to hold a license issued under
F. The department may not issue or renew a license to an applicant and
may revoke a license issued under subsection C of this section if any
of the following applies:
1. The applicant owes one thousand dollars or more in delinquent cigarette
taxes that are not under protest or subject to a payment agreement.
2. The department has revoked any license held by the applicant within
the previous two years.
3. The applicant has been convicted of a crime that relates to stolen or
4. The applicant has imported cigarettes into the United States for sale
or distribution in violation of 19 United States Code section 1681a.
5. The applicant has imported cigarettes into the United States for sale
or distribution without fully complying with the federal cigarette labeling
and advertising act (P.L. 89-92; 79 Stat. 282; 15 United States Code section 1331).
6. The applicant is in violation of section 13-3711 or section 36-798.06,
7. Pursuant to section 44-7111, section 6(a), the applicant is in violation
of section 44-7111, section 3(c).
8. The applicant's civil rights have been suspended under section 13-904.
An applicant whose civil rights have been suspended will be ineligible
to hold a license for a period of five years following the restoration
of the applicant's civil rights.
G. In addition to any other civil or criminal penalty and except as otherwise
provided in this section, the department may suspend or revoke a license
issued under subsection C of this section if the person violates any requirement
under this title more than two times within a three-year period.
H. The department shall publish on its website the names of each person
who is issued a license under subsection C of this section, including
any trade names or business names used by the licensee. The department
shall update the published names at least once each month.
I. A person may not apply for or hold a distributor's license if that
person does not engage in the activities described in subsection A of
this section. In addition to any other applicable penalty, the department may:
1. Revoke the license of any licensee that fails to file a return or report
required under this chapter for twelve consecutive months.
2. Cancel the license of any licensee that fails to incur any tax liability
under this chapter for twelve consecutive months.
J. Any suspension, revocation or denial of a license issued under this
section must comply with section 41-1092.11, subsection B.
K. Notwithstanding any other law, for the purposes of subsection F, paragraphs
1 and 2 of this section, section 42-1127, subsection C and section 42-3461,
subsection B, if a distributor has listed in its application more than
one place of business, any suspension, revocation or nonrenewal of a distributor's
license shall apply only with effect to remove the place of business at
which the activity occurred that resulted in the violation from the distributor's
license. If such a removal occurs, the distributor shall be subject to
restrictions that the department prescribes by rule.