Cigarette tax stamps; description and characteristics; use by licensed
distributors; affixation standards; metering
A. The department shall prescribe by rule or procedure the method and manner
in which tax stamps are to be affixed to cigarettes and may provide for
the cancellation of stamps. In addition to any specifications provided
under this article, the stamps shall also meet the requirements provided
in section 42-3006.
B. Each roll or sheet of stamps for cigarettes that are required under
this chapter shall have a separate serial number that is legible at the
point of sale to the distributor. The department shall use the serial
number to keep records of each distributor who purchases each roll or
sheet of stamps. The department shall not sell stamps that have the same
serial number to more than one distributor. The department may sell a
partial roll or sheet of stamps to a distributor and shall retain the
remainder of the roll or sheet to subsequently sell to the same distributor
or shall destroy the remainder of the roll or sheet.
C. Only licensed distributors may purchase, obtain or affix cigarette stamps.
Distributors shall not sell or provide stamps to any other distributor
or person. When affixing cigarette stamps to cigarettes, distributors
shall ensure that the affixation method that is used maintains the legibility
of the serial numbers on the stamps.
D. If, during compliance inspections of a distributor or retailer, the
department discovers cigarette packages that appear not to be stamped
in accordance with subsection C of this section and if the distributor
or retailer has substantially complied with the other provisions of this
chapter, the following shall be considered a properly stamped cigarette package:
1. A questioned individual cigarette package that does not have an affixed
cigarette stamp containing a fully legible serial number but the legible
digits of the serial number of the cigarette stamp on the questioned individual
cigarette package match the corresponding digits of the serial numbers
from other properly stamped cigarette packages that are packaged or shelved
together with the questioned individual cigarette package.
2. A questioned individual cigarette package that is part of an originally
unopened pallet, master carton or carton that contains other properly
stamped cigarettes when the pallet, master carton or carton is subsequently
opened during a compliance inspection by the department.
3. A questioned individual cigarette package if the distributor or retailer
can demonstrate through books, records or other indicia to the satisfaction
of the department that the questioned individual cigarette package was
purchased as part of the same pallet, master carton or carton that contained
properly stamped cigarette packages.
E. The department may authorize the use of a metering machine. If the department
authorizes the use of a metering machine, the department shall assign
a unique meter impression number to each distributor and ensure that the
impression is legible at the point of sale. The department shall keep
records that indicate the assigned meter impression number for each distributor.