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Article VII. Miscellaneous

§ 54:40A-37. Proceeds of the collection of taxes and license fees to be paid to State Treasurer

All taxes, fees, penalties and interest received or collected by the director, pursuant to the provisions of this act, shall be paid to the State Treasurer.

§ 54:40A-37.1. Cancer Research Fund

The sum of $1,000,000.00 of the tax collected pursuant to section 301 of P.L.1948, c.65 (C.54:40A-8), shall be deposited by the State Treasurer in a special account to be known as the Cancer Research Fund, except that for Fiscal Year 1983 only $500,000.00 shall be deposited in that account. Moneys in the Cancer Research Fund shall be annually appropriated toward the funding of the New Jersey State Commission on Cancer Research established pursuant to P.L.1983, c.6 (C.52:9U-1 et seq.), or to projects authorized and approved by the commission.

§ 54:40A-38. Appropriation for enforcement of act

The sum of two hundred thirty thousand dollars ($230,000.00) is hereby appropriated for the purpose of carrying out the provisions of this act, and said sum shall be subject to disbursements from the date of approval of this act.

§ 54:40A-39. Appropriation for refund claims

For the period beginning July first, one thousand nine hundred and forty-eight, and ending June thirtieth, one thousand nine hundred and forty-nine, there is hereby appropriated the amount necessary to pay all claims for refund of taxes and license fees authorized by this act and upon the certification of the director, the Commissioner of Taxation and Finance is authorized and it shall be his duty to withdraw from the State fund so much as shall be necessary to pay such claims, and the State Treasurer shall pay such claims on receipt of warrants of the Commissioner of Taxation and Finance.

§ 54:40A-40. Powers of director upon approval of act

Immediately upon approval of this act the director shall take such action and make all necessary provisions to put said act into full operation on its effective date, and in so doing he may incur obligations and enter into contracts, within the limits of the appropriation herein provided, issue licenses, sell stamps and promulgate such rules and regulations as herein required.

§ 54:40A-41. Constitutionality

The provisions of this act shall be severable and if for any reason any section or any provision hereof shall be determined to be unconstitutional or invalid, the same shall not be held to affect any other section or provision thereof.

§ 54:40A-42. Repealer

All acts and parts of acts inconsistent with the provisions of this act are hereby repealed; provided, however, that nothing contained herein shall be construed to repeal the provisions of “An act authorizing any city of the fourth class by ordinance, subject to referendum, to impose, in the municipality, certain retail sales and services taxes and providing for the collection thereof,” filed April nineteenth, one thousand nine hundred and forty-seven (P.L.1947, c. 71), or of any ordinance adopted under the authority of said chapter seventy-one of the laws of one thousand nine hundred and forty-seven.

§ 54:40A-43. Effective date

This act shall take effect on the first day of July, one thousand nine hundred and forty-eight.

§ 54:40A-44. Advertisements; penalties therefor

No radio or television broadcast originating in this State, or newspaper, or other publication published in this State, shall accept an advertisement from any out-of-State cigarette dealer for the sale of cigarettes by mail or express, unless there is included in said advertisement the following words: “Before any person may receive cigarettes in New Jersey by mail or express, a license for that purpose must be obtained from the Division of Taxation, New Jersey Department of the Treasury.”

Any person who violates these provisions, upon conviction thereof, shall be fined not more than $1,000 for each individual offense.

§ 54:40A-45. Tobacco industry advisory council; membership; report

To advise and consult with the director and the supervisor in the administration and enforcement of the Cigarette Tax Act and the Unfair Cigarette Sales Act of 1952, there is established in the Cigarette Tax Bureau a tobacco industry advisory council to consist of 7 citizens to be appointed by the Governor for terms of 3 years and until the appointment of their successors.

The members of the council shall be holders of, or officers of corporations holding, cigarette distributor, wholesale dealer or retail licenses issued by the State; or representatives of such licensees. The members of the council shall serve without compensation. The council shall organize annually by selection of a chairman from among its members.

The council shall report to the Governor and to the director and supervisor at such times as it shall deem appropriate concerning the administration and enforcement of the Cigarette Tax Act and the Unfair Cigarette Sales Act.

§ 54:40A-46. Short title

This act shall be known and may be cited as the “Cigarette Sales Act.”

§ 54:40A-47. Findings, declarations relative to out-of-State cigarette sales

The Legislature hereby finds and declares that:

  • a. Currently, the federal Jenkins Act, 15 U.S.C. § 375 et seq., requires any person that sells or transfers in interstate commerce cigarettes into a state that taxes the sale or use of cigarettes to file certain information with the tobacco tax administrator of that state; and
  • b. According to the U.S. General Accounting Office, the Jenkins Act is rarely enforced by the federal government and is currently unenforceable by the states; and
  • c. As the sales of cigarettes to residents of this State by out-of-State sellers increase and the difficulties associated with the collection of sales and use taxes continue, there will be a steady erosion of the sales and use tax revenues that this State is able to collect;
  • d. It is, therefore, the purpose of this act to facilitate the collection of all applicable sales and use taxes on cigarettes sold to residents of this State and to enforce the Jenkins Act.

§ 54:40A-48. “Face-to-face sale” defined

As used in this act, face-to-face sale” means a sale in which the purchaser is in the physical presence of the seller or the seller’s employee or agent at the time of the sale. A “face-to-face sale” does not include any transaction conducted by mail order, the Internet, telephone, or any other anonymous transaction method in which the buyer is not in the seller’s physical presence or the physical presence of the seller’s employee or agent at the time of the sale.

§ 54:40A-49. Conditions for non-face-to-face sale of cigarettes.

A person shall not engage in a retail sale of cigarettes in this State unless the sale is a face-to-face sale, except that a person may engage in a non-face-to-face sale of cigarettes to a person in this State if the following conditions are met:

  • a. The seller has fully complied with all of the requirements of the Jenkins Act, 15 U.S.C. § 375 et seq., for shipments to this State;
  • b. The seller has verified payment of, paid, or collected all applicable State taxes, including the cigarette taxes imposed by the “Cigarette Tax Act,” P.L.1948, c.65 (C.54:40A-1 et seq.) and the sales or use taxes imposed by the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.), due on the cigarettes; and
  • c. The seller has, before mailing or shipping the cigarettes:
    • (1) obtained from the purchaser reliable confirmation that the purchaser is at least 21 years old and a statement by the purchaser under penalty of perjury certifying the purchaser’s date of birth and address;
    • (2) made good faith effort to verify the information contained in the certification provided by the purchaser against a commercially available database or has obtained a photocopy or other image of a government-issued identification bearing the purchaser’s image and stating the date of birth or age of the purchaser;
    • (3) received payment for the sale from the prospective purchaser by a credit or debit card that has been issued in the purchaser’s name or by check; and
    • (4) verified that a credit or debit card used for payment has been issued in the purchaser’s name, and the address to which the cigarettes are being shipped matches the credit or debit card company’s address for the cardholder.
  • Sellers taking an order for a non-face-to-face sale may request that prospective purchasers provide their e-mail addresses.

§ 54:40A-50. Additional penalties, schedule

In addition to any other remedies provided by law, the Director of the Division of Taxation in the Department of the Treasury shall assess penalties for violations of this act in accordance with the following schedule:

  • a. a penalty of not less than $2,000 and not more than $4,000 for the first violation;
  • b. a penalty of not less than $5,000 and not more than $7,000 for the second violation within a five-year period;
  • c. a penalty of not less than $8,000 and not more than $10,000 for the third violation within a five-year period;
  • d. a penalty of not less than $11,000 and not more than $13,000 for a fourth violation within a five-year period; and
  • e. a penalty of $20,000 for a fifth or subsequent violation within a five-year period.

§ 54:40A-51. Annual report

The Director of the Division of Taxation in the Department of the Treasury shall provide the Speaker of the General Assembly, the Senate President, and the chairpersons of the Assembly Appropriations Committee and the Senate Budget Committee, or the successor committees, an annual report regarding all actions taken to comply with and enforce this act.

§ 54:40A-52. Vending machine sales unaffected

This act shall not prohibit any lawful sale of a tobacco product that occurs by means of a vending machine.

§ 54:40A-53. Other laws applicable

Nothing in this act shall relieve the seller of cigarettes from any other applicable requirement of law relating to the sale of cigarettes.

§ 54:40A-54. Short title

This act shall be known and may be cited as the “The Reduced Cigarette Ignition Propensity and Firefighter Protection Act.”

§ 54:40A-55. Findings, declarations relative to reduced cigarette ignition propensity

The Legislature finds and declares that:

  • a. Cigarettes are the leading cause of fire deaths in this State and the nation;
  • b. Each year in the United States, 1,000 persons are killed due to cigarette fires and 3,000 are injured in fires ignited by cigarettes, while in this State 1,885 residential fires and 19 fatalities were attributable to cigarettes in 2004 and 2005;
  • c. A high proportion of the victims of cigarette fires are non-smokers, including senior citizens and young children;
  • d. Cigarette-caused fires result in billions of dollars of property losses and damage in the United States and millions of dollars in this State;
  • e. Cigarette fires unnecessarily jeopardize firefighters and result in avoidable emergency response costs for municipalities;
  • f. In 2004, New York State implemented a cigarette fire safety regulation requiring cigarettes sold in that state to meet a fire safety performance standard; in 2005, Vermont and California enacted cigarette fire safety laws directly incorporating New York’s regulation into statute; and, in 2006, Illinois, New Hampshire, and Massachusetts joined these states in enacting such laws;
  • g. In 2005, Canada implemented the New York State fire safety standard, becoming the first nation to have a cigarette fire safety standard;
  • h. New York State’s cigarette fire safety standard is based upon decades of research by the National Institute of Standards and Technology, Congressional research groups and private industry;
  • i. This cigarette fire safety standard minimizes costs to the State and minimally burdens cigarette manufacturers, distributors and retail sellers, and, therefore, should become law in this State; and
  • j. It is therefore fitting and proper for this State to adopt the cigarette fire safety standard that is in effect in New York State to reduce the likelihood that cigarettes will cause fires and result in deaths, injuries and property damage.

§ 54:40A-56. Definitions relative to reduced cigarette ignition propensity

  • For the purposes of this act:
  • “Agent” shall mean any person authorized by the State to purchase and affix tax stamps on packages of cigarettes.
  • “Cigarette” shall mean any roll for smoking whether made wholly or in part of tobacco or any other substance, irrespective of size or shape and whether the tobacco or substance is flavored, adulterated or mixed with any other ingredient, the wrapper or cover of which is made of paper or any other substance or material except tobacco.
  • “Director” shall mean the Director of the Division of Fire Safety in the Department of Community Affairs.
  • “Manufacturer” shall mean:
    • a. any entity which manufactures or otherwise produces cigarettes or causes cigarettes to be manufactured or produced anywhere that such manufacturer intends to be sold in this State, including cigarettes intended to be sold in the United States through an importer; or
    • b. the first purchaser anywhere that intends to resell in the United States cigarettes manufactured anywhere that the original manufacturer or maker does not intend to be sold in the United States; or
    • c. any entity that becomes a successor of an entity described in subsection a. or b.
  • “Quality control and quality assurance program” shall mean the laboratory procedures implemented to ensure that operator bias, systematic and nonsystematic methodological errors, and equipment-related problems do not affect the results of the testing. Such a program ensures that the testing repeatability remains within the required repeatability values stated in paragraph (6) of subsection a. of section 4 [C.54:40A-57] of this act for all test trials used to certify cigarettes in accordance with this act.
  • “Repeatability” shall mean the range of values within which the repeat results of cigarette test trials from a single laboratory will fall 95 percent of the time.
  • “Retail dealer” shall mean any person other than a manufacturer or wholesale dealer engaged in selling cigarettes or tobacco products.
  • “Sale” shall mean any transfer of title or possession or both, exchange or barter, conditional or otherwise, in any manner or by any means whatever or any such agreement. In addition to cash and credit sales, the giving of cigarettes as samples, prizes or gifts, and the exchanging of cigarettes for any consideration other than money are considered sales.
  • “Sell” shall mean to sell, or to offer or agree to do the same.
  • “Wholesale dealer” shall mean any person who sells cigarettes or tobacco products to retail dealers or other persons for purposes of resale, and any person who owns, operates or maintains one or more cigarette or tobacco product vending machines in, at or upon premises owned or occupied by any other person.

§ 54:40A-57. Testing, certification required for sale of cigarettes; exceptions

  • a. Except as provided in subsection g. of this section, no cigarettes may be sold or offered for sale in this State or offered for sale or sold to persons located in this State unless the cigarettes have been tested in accordance with the test method and meet the performance standard specified in this section, a written certification has been filed by the manufacturer with the director in accordance with section 5 [C.54:40A-58] of this act, and the cigarettes have been marked in accordance with section 6 [C.54:40A-59] of this act.
    • (1) Testing of cigarettes shall be conducted in accordance with the American Society of Testing and Materials (“ASTM”) standard E2187-04 “Standard Test Method for Measuring the Ignition Strength of Cigarettes.”
    • (2) Testing shall be conducted on 10 layers of filter paper.
    • (3) No more than 25 percent of the cigarettes tested in a test trial in accordance with this section shall exhibit full-length burns. Forty replicate tests shall comprise a complete test trial for each cigarette tested.
    • (4) The performance standard required by this section shall only be applied to a complete test trial.
    • (5) Written certifications shall be based upon testing conducted by a laboratory that has been accredited pursuant to Standard ISO/IEC 17025 of the International Organization for Standardization, or other comparable accreditation standard required by the director.
    • (6) Laboratories conducting testing in accordance with this section shall implement a quality control and quality assurance program that includes a procedure to determine the repeatability of the testing results. The repeatability value shall be no greater than 0.19.
    • (7) This section does not require additional testing if cigarettes are tested consistent with this act for any other purpose.
    • (8) Testing performed or sponsored by the director to determine a cigarette’s compliance with the performance standard required in this section shall be conducted in accordance with this section.
  • b. Each cigarette listed in a certification submitted pursuant to section 5 [C.54:40A-58] of this act that uses lowered permeability bands in the cigarette paper to achieve compliance with the performance standard set forth in this section shall have at least two nominally identical bands on the paper surrounding the tobacco column. At least one complete band shall be located at least 15 millimeters from the lighting end of the cigarette. For cigarettes on which the bands are positioned by design, there shall be at least two bands fully located at least 15 millimeters from the lighting end and 10 millimeters from the filter end of the tobacco column, or 10 millimeters from the labeled end of the tobacco column for a non-filtered cigarette.
  • c. A manufacturer of a cigarette that the director determines cannot be tested in accordance with the test method prescribed in subsection a. of this section shall propose a test method and performance standard for the cigarette to the director. Upon approval of the proposed test method and a determination by the director that the performance standard proposed by the manufacturer is equivalent to the performance standard prescribed in subsection a. of this section, the manufacturer may employ the test method and performance standard to certify the cigarette pursuant to section 5 of this act. If the director determines that another state has enacted reduced cigarette ignition propensity standards that include a test method and performance standard that is the same as those contained in this act, and the director finds that the officials responsible for implementing those requirements have approved the proposed alternative test method and performance standard for a particular cigarette proposed by a manufacturer as meeting the fire safety standards of that state’s law or regulation under a legal provision comparable to this section, then the director shall authorize that manufacturer to employ the alternative test method and performance standard to certify that cigarette for sale in this State, unless the director demonstrates a reasonable basis why the alternative test should not be accepted under this act. All other applicable requirements of this section shall apply to the manufacturer.
  • d. Each manufacturer shall maintain copies of the reports of all tests conducted on all cigarettes offered for sale for a period of three years, and shall make copies of these reports available to the director and the Attorney General upon written request. Any manufacturer who fails to make copies of these reports available within sixty days of receiving a written request shall be subject to a civil penalty not to exceed $10,000 for each day after the sixtieth day that the manufacturer does not make such copies available.
  • e. The director may adopt a subsequent ASTM Standard Test Method for measuring the Ignition Strength of Cigarettes upon a finding that such subsequent method does not result in a change in the percentage of full-length burns exhibited by any tested cigarette when compared to the percentage of full-length burns the same cigarette would exhibit when tested in accordance with ASTM Standard E2187-04 and the performance standard in subsection a. of this section.
  • f. The director shall review the effectiveness of this section and report, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), every three years to the Legislature his findings and, if appropriate, recommendations for legislation to improve the effectiveness of this section. The report and legislative recommendations shall be submitted no later than June 30th of each three-year period.
  • g. The requirements of subsection a. of this section shall not prohibit wholesale or retail dealers from selling their existing inventory of cigarettes on or after the effective date [June 1, 2008] of this act if the wholesale or retailer dealer can establish that State tax stamps were affixed to the cigarettes prior to the effective date, and if the wholesale or retailer dealer can establish that the inventory was purchased prior to the effective date in comparable quantity to the inventory purchased during the same period of the prior year.
  • h. This act shall be implemented in accordance with the implementation and substance of the New York Fire Safety Standards for Cigarettes.

§ 54:40A-58. Certification submitted to director by manufacturer; “Reduced Cigarette Ignition Propensity and Firefighter Protection Act Enforcement Fund.”

  • a. Each manufacturer shall submit to the director a written certification attesting that:
    • (1) Each cigarette listed in the certification has been tested in accordance with section 4 [C.54:40A-57] of this act; and
    • (2) Each cigarette listed in the certification meets the performance standard set forth under section 4 of this act.
  • b. Each cigarette listed in the certification shall be described with the following information:
    • (1) brand, or trade name on the package;
    • (2) style, such as light or ultra light;
    • (3) length in millimeters;
    • (4) circumference in millimeters;
    • (5) flavor, such as menthol or chocolate, if applicable;
    • (6) filter or non-filter;
    • (7) package description, such as soft pack or box;
    • (8) marking approved in accordance with section 6 [C.54:40A-59] of this act;
    • (9) the name, address, and telephone number of the laboratory, if different than the manufacturer, that conducted the test; and
    • (10) the date that the testing occurred.
  • c. The certifications shall be made available to the Attorney General for purposes consistent with this act and the Division of Taxation in the Department of the Treasury for the purposes of ensuring compliance with this section.
  • d. Each cigarette certified under this section shall be re-certified every three years.
  • e. For each cigarette listed in a certification, a manufacturer shall pay to the director a $250 fee. The director is authorized to annually adjust this fee to ensure it defrays the actual costs of the processing, testing, enforcement and oversight activities required by this act.
  • f. There is established in the State Treasury a separate, nonlapsing fund to be known as the “Reduced Cigarette Ignition Propensity and Firefighter Protection Act Enforcement Fund.” The fund shall consist of all certification fees submitted by manufacturers, and shall, in addition to any other monies made available for such purpose, be available to the Division of Fire Safety for use solely to support processing, testing, enforcement and oversight activities under the act.
  • g. If a manufacturer has certified a cigarette pursuant to this section, and thereafter makes any change to the cigarette that is likely to alter its compliance with the reduced cigarette ignition propensity standards required by this act, that cigarette shall not be sold or offered for sale in this State until the manufacturer retests the cigarette in accordance with the testing standards set forth in section 4 [C.54:40A-57] of this act and maintains records of that retesting as required by section 4 of this act. An altered cigarette which does not meet the performance standard set forth in section 4 of this act shall not be sold in this State.

§ 54:40A-59. Marking of cigarettes as certified

  • a. Cigarettes that are certified by a manufacturer in accordance with section 5 [C.54:40A-58] of this act shall be marked to indicate compliance with the requirements of section 4 [C.54:40A-57] of this act. The marking shall be in eight point font type or larger and consist of:
    • (1) modification of the product UPC Code to indicate a visible mark printed at or around the area of the UPC Code. The mark may consist of alphanumeric or symbolic characters permanently stamped, engraved, embossed or printed in conjunction with the UPC; or
    • (2) any visible combination of alphanumeric or symbolic characters permanently stamped, engraved, or embossed upon the cigarette package or cellophane wrap; or
    • (3) printed, stamped, engraved or embossed text that indicates that the cigarettes meet the standards of this section.
  • b. A manufacturer shall use only one marking, and shall apply this marking uniformly for all packages, including, but not limited to packs, cartons, and cases, and brands marketed by that manufacturer.
  • c. The director shall be notified as to the marking that is selected.
  • d. Prior to the certification of any cigarette, a manufacturer shall present its proposed marking to the director for approval. Upon receipt of the request, the director shall approve or disapprove the marking offered, except that the director shall approve any marking in use and approved for sale in New York State pursuant to the New York Fire Safety Standards for Cigarettes. Proposed markings shall be deemed approved if the director fails to act within 10 business days of receiving a request for approval.
  • e. No manufacturer shall modify its approved marking unless the modification has been approved by the director in accordance with this section.
  • f. Manufacturers certifying cigarettes in accordance with section 5 [C.54:40A-58] of this act shall provide a copy of the certifications to all wholesale dealers and agents to which they sell cigarettes, and shall also provide sufficient copies of an illustration of the package marking utilized by the manufacturer pursuant to this section for each retail dealer to which the wholesale dealers or agents sell cigarettes. Wholesale dealers and agents shall provide a copy of these package markings received from manufacturers to all retail dealers to which they sell cigarettes. Wholesale dealers, agents, and retail dealers shall permit the director, the Director of the Division of Taxation, the Attorney General, their employees, or other law enforcement personnel to inspect markings of cigarette packaging marked in accordance with this section.

§ 54:40A-60. Violations, penalties

  • a. A manufacturer, wholesale dealer, agent or any other person or entity who knowingly sells or offers to sell cigarettes, other than through retail sale, in violation of section 4 [C.54:40A-57] of this act, for a first offense shall be liable to a civil penalty not to exceed $10,000 per each sale of such cigarettes, and for a subsequent offense shall be liable to a civil penalty not to exceed $25,000 per each such sale of cigarettes provided that in no case shall the penalty against any such person or entity exceed $100,000 during a thirty-day period.
  • b. A retail dealer who knowingly sells cigarettes in violation of section 4 of this act shall:
    • (1) for a first offense be liable to a civil penalty not to exceed $500, and for a subsequent offense be liable to a civil penalty not to exceed $2,000, per each such sale or offer for sale of cigarettes, if the total number of cigarettes sold or offered for sale in such sale does not exceed 1,000 cigarettes; or
    • (2) for a first offense be liable to a civil penalty not to exceed $1,000, and for a subsequent offense be liable to a civil penalty not to exceed $5,000 per each such sale or offer for sale of such cigarettes, if the total number of cigarettes sold or offered for sale in such sale exceeds 1,000 cigarettes, provided that this penalty against any retail dealer shall not exceed $25,000 during a thirty-day period.
  • c. In addition to any penalty prescribed by law, any corporation, partnership, sole proprietor, limited partnership or association engaged in the manufacture of cigarettes that knowingly makes a false certification pursuant to section 5 [C.54:40A-58] of this act shall, for a first offense, be liable to a civil penalty of at least $75,000, and for a subsequent offense a civil penalty not to exceed $250,000 for each such false certification.
  • d. Any person violating any other provision in this section shall be liable to a civil penalty for a first offense not to exceed $1,000, and for a subsequent offense liable to a civil penalty not to exceed $5,000 for each such violation.
  • e. Any cigarettes that have been sold or offered for sale that do not comply with the safety standard required by section 4 [C.54:40A-57] of this act shall be subject to forfeiture under the provisions of N.J.S.2C:64-1 et seq.; provided, however, that prior to the destruction of any cigarette seized pursuant to these provisions, the true holder of the trademark rights in the cigarette brand shall be permitted to inspect the cigarette.
  • f. In addition to any other remedy provided by law, the director or Attorney General may file an action in Superior Court for a violation of this act, including petitioning for injunctive relief or to recover any costs or damages suffered by the State because of a violation of this section, including enforcement costs relating to the specific violation and attorney’s fees. Each violation of this section or of rules or regulations adopted under this section constitutes a separate civil violation for which the director may obtain relief.

§ 54:40A-61. Rules, regulations

  • a. The director may promulgate rules and regulations, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the purposes of this act.
  • b. The Director of the Division of Taxation in the Department of the Treasury, in the regular course of conducting inspections of wholesale dealers, agents, and retail dealers as authorized under the “Cigarette Tax Act,” P.L.1948, c.65 (C.54:40A-1 et seq.), may inspect such cigarettes to determine if the cigarettes are marked as required by section 6 [C.54:40A-59] of this act. If the cigarettes are not marked as required, the Director of Taxation shall notify the director, notwithstanding the provisions of R.S.54:50-8.

§ 54:40A-62. Procedures for enforcement

To enforce the provisions of this act, the Attorney General and the director are hereby authorized to examine the books, papers, invoices and other records of any person in possession, control or occupancy of any premises where cigarettes are placed, stored, sold or offered for sale, as well as the stock of cigarettes on the premises. Every person in the possession, control or occupancy of any premises where cigarettes are placed, sold or offered for sale, is hereby directed and required to give the Attorney General and the director the means, facilities and opportunity for the examinations authorized by this section.

§ 54:40A-63. “Fire Prevention and Public Safety Fund.”

There is hereby established in the State Treasury a special fund to be known as the “Fire Prevention and Public Safety Fund.” The fund shall consist of all monies recovered as penalties under section 7 [C.54:40A-60] of this act. The monies shall be deposited to the credit of the fund and shall, in addition to any other monies made available for such purpose, be made available to the director to support fire safety and prevention programs.

§ 54:40A-64. Construction of act as to foreign sales

Nothing in this act shall be construed to prohibit any person or entity from manufacturing or selling cigarettes that do not meet the requirements of section 4 [C.54:40A-57] of this act if the cigarettes are or will be stamped for sale in another state or are packaged for sale outside the United States and that person or entity has taken reasonable steps to ensure that such cigarettes will not be sold or offered for sale to persons located in this State.

§ 54:40A-65. Preemption by adoption of federal standard

This act shall be inoperative if a federal reduced cigarette ignition propensity standard that preempts this act is adopted and becomes effective.

§ 54:40A-66. Conflicting local ordinances, local preemption

Notwithstanding any other provision of law, local governmental units of this State shall not enact or enforce any ordinance or other local law or regulation conflicting with, or preempted by, any provision of this act or with any policy of this State expressed by this act, whether that policy be expressed by inclusion of a provision in the act or by exclusion of that subject from the act.

Chapter 40B. Tobacco Products Wholesale Sales and Use Tax

§ 54:40B-1. Short title

Sections 1 through 14 of this act shall be known and may be cited as the “Tobacco Products Wholesale Sales and Use Tax Act.”

§ 54:40B-2. Definitions

  • As used in sections 2 through 14 and section 20 of this act:
  • “Consumer” means a person except a distributor, manufacturer or wholesaler who acquires a tobacco product for consumption, storage or use in this State;
  • “Director” means the Director of the Division of Taxation in the Department of the Treasury;
  • “Distributor” means
  • a person engaged in the business of selling tobacco products in this State who brings, or causes to be brought into this State from without the State a tobacco product for sale within this State,
  • a person who makes or manufactures tobacco products in this State for sale in the State,
  • a person engaged in the business of selling tobacco products without this State who ships or transports tobacco products to a person in this State to be sold to a retail dealer, or
  • a person who receives tobacco products on which the tax has not or will not be paid by another distributor;
  • “Dry snuff” means any finely cut, ground or powdered smokeless tobacco that is intended to be sniffed through the nasal cavity, but does not include moist snuff;
  • “Manufacturer” means a person, wherever resident or located, who manufactures or produces, or causes to be manufactured or produced, a tobacco product and sells, uses, stores or distributes the product regardless of whether it is intended for sale, use or distribution within or without this State;
  • “Moist snuff” means any finely cut, ground or powdered smokeless tobacco that is intended to be placed or dipped in the oral cavity, but does not include dry snuff;
  • “Person” means an individual, firm, corporation, copartnership, joint venture, association, receiver, trustee, guardian, executor, administrator, or any other person acting in a fiduciary capacity, or an estate, trust or group or combination acting as a unit, the State Government and any political subdivision thereof, and the plural as well as the singular, unless the intention to give a more limited meaning is disclosed by the context;
  • “Place of business” means a place where a tobacco product is sold or where a tobacco product is brought or kept for the purpose of sale or consumption, including so far as may be applicable a vessel, vehicle, airplane, train or vending machine;
  • “Retail dealer” means a person who is engaged in this State in the business of selling any tobacco product at retail. A person placing a tobacco product vending machine at, or on any premises shall be deemed to be a retail dealer for each vending machine;
  • “Sale” means any sale, transfer, exchange, barter, or gift, in any manner or by any means whatsoever;
  • “Tobacco product” means any product containing any tobacco for personal consumption including, but not limited to, cigars, little cigars, cigarillos, chewing tobacco, pipe tobacco, smoking tobacco and their substitutes, and dry and moist snuff, but does not include cigarette as defined in section 102 [C.54:40A-2] of the “Cigarette Tax Act,” P.L.1948, c.65 (C.54:40A-1 et seq.);
  • “Treasurer” means the State Treasurer;
  • “Use” means the exercise of any right or power incidental to the ownership of a tobacco product, including a sale at retail;
  • “Wholesale price” means the actual price for which a manufacturer sells tobacco products to a distributor; and
  • “Wholesaler” means a person, wherever resident or located, other than a distributor as defined herein, who:
    • a. purchases tobacco products from any other person who purchases from the manufacturer and who acquires tobacco products solely for the purpose of bona fide resale to retail dealers or to other persons for the purposes of resale only; or
    • b. services retail outlets by the maintenance of an established place of business for the purchase of tobacco products including, but not limited to, the maintenance of warehousing facilities for the storage and distribution of tobacco products.

§ 54:40B-3. Tax of 30 percent imposed on wholesale sale, use, distribution of tobacco product

  • a. There is imposed a tax of 30% upon the wholesale price upon the sale, use or distribution of a tobacco product within this State, except that if the product is moist snuff, the tax shall be imposed as provided in section 3 of P.L.2006, c.37 (C.54:40B-3.1).
  • b. Unless a tobacco product has already been or will be subject to the wholesale sales tax imposed in subsection a. of this section, if a distributor or wholesaler uses a tobacco product within this State, there is imposed upon the distributor or wholesaler a compensating use tax of 30% measured by the sales price of a similar tobacco product to a distributor, except that if the product is moist snuff, the tax shall be imposed as provided in section 3 of P.L.2006, c.37 (C.54:40B-3.1).
  • c. Unless a wholesale use tax is due pursuant to subsection b. of this section, if a distributor or wholesaler has not paid the wholesale sales tax imposed in subsection a. of this section upon a sale that is subject to the wholesale sales tax imposed in that subsection a., there is imposed upon the retail dealer or consumer chargeable for the sale a compensating use tax of 30% of the price paid or charged for the tobacco product, except that if the product is moist snuff, the tax shall be imposed as provided in section 3 of P.L.2006, c.37 (C.54:40B-3.1), which shall be collected in the manner provided in subsection b. of section 5 [C.54:40B-5] of this act.

§ 54:40B-3.1. Tax imposed upon sale, use, distribution of moist snuff

  • a. There is imposed a tax upon the sale, use or distribution of moist snuff within this State by a distributor or wholesaler to a retail dealer or consumer at the rate of $0.75 per ounce on the net weight, as listed by the manufacturer, of the moist snuff, and a proportionate rate on all fractional parts of an ounce of the net weight of moist snuff.
  • b. Unless a moist snuff product has already been or will be subject to the wholesale sales tax imposed in subsection a. of this section, if a distributor or wholesaler uses the moist snuff within this State, there is imposed upon the distributor or wholesaler a compensating use tax of $0.75 per ounce on the net weight, as listed by the manufacturer, of the moist snuff, and a proportionate rate on all fractional parts of an ounce of the net weight of moist snuff.
  • c. Unless a wholesale use tax is due pursuant to subsection b. of this section, if a distributor or wholesaler has not paid the wholesale sales tax imposed in subsection a. of this section upon a sale that is subject to the wholesale sales tax imposed in that subsection a., there is imposed upon the retail dealer or consumer chargeable for the sale a compensating use tax of $0.75 per ounce on the net weight, as listed by the manufacturer, of the moist snuff, and a proportionate rate on all fractional parts of an ounce of the net weight of moist snuff, which shall be collected in the manner provided in subsection b. of section 5 of P.L.1990, c.39 (C.54:40B-5).

§ 54:40B-4. Payment of tax by distributor, wholesaler

Every distributor or wholesaler shall be liable to pay the tax when it has sold or otherwise disposed of the tobacco product to the retail dealer or consumer. The retail dealer or consumer shall be given an invoice, receipt or other statement or memorandum stating that the tax has been paid or will be paid by the distributor or wholesaler.

The director may provide by regulation that the tax upon tobacco products, sold to a retail dealer or consumer who pays the distributor or wholesaler in installments, may be paid and the return filed on the amount of each installment.

§ 54:40B-5. Liability for payment of tax

  • a. Every distributor or wholesaler required to pay the tax imposed by this act shall be personally liable for the tax imposed under this act.
  • b. If a distributor or wholesaler fails to pay the tax imposed by this act when required to pay the same, then in addition to all other rights, obligations and remedies provided, the compensating use tax imposed in subsection c. of section 3 shall be payable by the retail dealer or consumer directly to the director, and it shall be the duty of the retail dealer or consumer to file a return, on a form prescribed by the director, with the director and to pay the tax to the director within 20 days of the date the tax was required to be paid or at other times as specified by the director.

§ 54:40B-6. Filing of certificate of registration, issuance of certificate of authority

Within 15 days from the effective date of this act, or in the case of distributors or wholesalers commencing business or opening new places of business after that date, within three days after the commencement or opening, every distributor or wholesaler required to pay the taxes imposed by this act shall file with the director a certificate of registration in a form prescribed by the director unless a certificate of authority has been previously issued to any distributor or wholesaler. The director shall issue, without charge, to each registrant a certificate of authority requiring the registrant to pay the tax and a duplicate thereof for each additional place of business of the registrant. Each certificate or duplicate shall state the place of business to which it is applicable. The certificate of authority shall be prominently displayed in the place of business of the registrant. Certificates shall be nonassignable and nontransferable and shall be surrendered to the director immediately upon the registrant’s ceasing to do business at the place named.

§ 54:40B-7. Records of charges, amounts to be kept by distributor, wholesaler

Every distributor or wholesaler required to pay any tax imposed by this act shall keep records of every charge for and of all amounts of wholesale price paid or due thereon and of the tax payable thereon, in such form as the director may require. Records shall include a true copy of each invoice, receipt, statement or memorandum upon which the provisions of section 4 of this act require that the tax paid be stated. Records shall be available for inspection and examination at any time upon demand by the director or duly authorized agent or employee and shall be preserved for a period of three years, except that the director may consent to their destruction within that period or may require that they be kept longer.

§ 54:40B-8. Contents of return

  • a. Every distributor or wholesaler required to pay tax under this act shall on or before August 20, 1990, and on or before the 20th day of each month thereafter, make and file a return for the preceding month with the director. The return shall show the total amount of wholesale price paid for sales to the distributor or wholesaler for tobacco products that are payable during the period and the amount of taxes required to be paid with respect to such amount. The return shall also reflect any use tax due.
  • b. The director may permit or require returns to be made covering other periods and upon such dates as the director may specify. In addition, the director may require payments of tax liability at such intervals and based upon such classifications as the director may designate. In prescribing other periods to be covered by the return or intervals or classifications for payment of tax liability, the director may take into account the dollar volume of tax involved as well as the need for ensuring the prompt and orderly collection of the taxes imposed.
  • c. The form of returns shall be prescribed by the director and shall contain such information as the director may deem necessary for the proper administration of this act. The director may require amended returns to be filed within 20 days after notice and to contain the information specified in the notice.

§ 54:40B-9. Payment of taxes; bond; security

Every distributor or wholesaler required to file a return under this act shall, at the time of filing the return, pay to the director the taxes imposed by this act. Taxes for the period for which a return is required to be filed or for a lesser interval as shall have been designated by the director, shall be due and payable to the director on the date limited for the filing of the return for the period, or on the date limited for such lesser interval as the director has designated, without regard to whether a return is filed or whether the return which is filed correctly shows the total amount of the wholesale price paid for sales to the distributor or wholesaler for tobacco products that are taxable during the period or the taxes due thereon. If the director deems it necessary to protect the revenues to be obtained under this act, the director may require a distributor or wholesaler required to pay the tax imposed by this act to file with the director a bond, issued by a surety company authorized to transact business in this State as to solvency and responsibility, in an amount as the director may fix, to secure the payment of any tax or penalties or interest due or which may become due from the distributor or wholesaler under this act. If the director determines that a distributor or wholesaler is to file a bond, the director shall give notice to the distributor or wholesaler to that effect specifying the amount of the bond required. The distributor or wholesaler shall file the bond within five days after the giving of notice unless within the five days the distributor or wholesaler requests in writing a hearing before the director at which the necessity, propriety and amount of the bond shall be determined by the director. The determination shall be final and shall be complied with within 15 days after the giving of notice thereof. In lieu of bond, securities approved by the director or cash in an amount as the director may prescribe, may be deposited, which shall be kept in the custody of the director who may at any time without notice to the depositor apply them to any tax or interest or penalties due, and for that purpose the securities may be sold by the director at public or private sale without notice to the depositor thereof.

§ 54:40B-10. Estimation of taxes; notice of determination

If a return required by this act is not filed, or if a return when filed is incorrect or insufficient, the amount of tax due shall be determined by the director from such information as may be available. If necessary, the tax may be estimated on the basis of external indices, such as purchases, location, scale of charges, comparable charges, number of employees or other factors. Notice of the determination shall be given to the distributor, wholesaler, retail dealer or consumer liable for the payment of the tax. The determination shall finally and irrevocably fix the tax unless the wholesaler, distributor, retail dealer or consumer against whom it is assessed, within 30 days after the notice date of the determination, shall apply to the director for a hearing, or unless the director on the director’s motion shall redetermine the same. After the hearing the director shall give notice of the determination to the wholesaler, distributor, retail dealer or consumer against whom the tax is assessed.

§ 54:40B-11. Taxes governed by Tax Uniform Procedure Law

The taxes imposed by this act shall be governed in all respects by the provisions of the State Tax Uniform Procedure Law, R.S. 54:48-1 et seq., except only to the extent that a specific provision of this act may be in conflict therewith.

§ 54:40B-12. Powers of director

In addition to the powers granted in this act, the director may:

  • a. Make, adopt and amend rules and regulations appropriate to the carrying out of this act.
  • b. Extend, for cause shown by general regulation or individual authorization, the time of filing any return for a period not exceeding three months on such terms and conditions as the director may require; and for cause shown, remit penalties and interest as provided for in the State Uniform Tax Procedure Law, R.S. 54:48-1 et seq.
  • c. Delegate functions and powers to any officer or employee of the division, and such of the director’s powers as the director may deem necessary to carry out efficiently the provisions of this act, and the person or persons to whom such power has been delegated shall possess and may exercise all of the power and perform all of the duties as delegated.
  • d. Require any distributor or wholesaler required to pay tax to keep detailed records of all amounts of wholesale prices paid for the tobacco products on which taxes are payable, and names and addresses of wholesalers, distributors, retail dealers and consumers, and other facts relevant in determining the amount of tax due and to furnish such information upon request to the director.
  • e. Assess, determine, revise and readjust the taxes imposed by this act.
  • f. Enter into agreements with other states and the District of Columbia, providing for the reciprocal enforcement of similar tax laws imposed by the states entering into such an agreement. The agreement may empower the duly authorized officer of any contracting state, which extends like authority to officers or employees of this State, to sue for the collection of that state’s taxes in the courts of this State.

§ 54:40B-13. Penalties and interest for failure to file return, pay taxes

Any person failing to file a return or to pay or pay over any tax to the director within the time required by this act shall be subject to such penalties and interest as are provided in the State Tax Uniform Procedure Law, R.S. 54:48-1 et seq. Unpaid penalties and interest may be determined, assessed, collected and enforced in the same manner as the tax imposed by this act.

§ 54:40B-13.1. Seizure of certain contraband tobacco products and cigarettes

  • a. All tobacco products subject to the tax imposed under P.L.1990, c.39 (C.54:40B-1 et seq.), on which the tax has not been paid as required by section 4 or section 5 of P.L.1990, c.39 (C.54:40B-4 and 54:40B-5), found in any place in this State are declared to be prima facie contraband goods and may be seized by the director, the director’s agents or employees, or by any peace officer of this State, when so ordered by the director, without a warrant.
  • b. The director may order the return of any seized tobacco product when the director shall have reason to believe, upon the presentation of satisfactory proof, that the owner has not willfully or intentionally evaded any tax imposed by P.L.1990, c.39 (C.54:40B-1 et seq.). Any tobacco product seized under the provisions of this section shall be disposed of according to law.
  • c.
    • (1) Except as otherwise provided in this section, the director shall destroy any seized untaxed tobacco product not subject to other disposition pursuant to P.L.1990, c.39 (C.54:40B-1 et seq.).
    • (2) As an alternative to destruction, the director may resell any untaxed tobacco product to the manufacturer of that tobacco product, but such tobacco product shall be resold only for export or destruction.
    • (3) Notwithstanding the provisions of paragraph (1) of this subsection, the director may authorize the use for law enforcement purposes of any untaxed tobacco products forfeited in accordance with this section.
  • d. The seizure and sale of any untaxed tobacco product under the provisions of this section shall not relieve any person from a fine, imprisonment or other penalty for violation of any of the provisions of P.L.1990, c.39 (C.54:40B-1 et seq.). The director, the director’s agents or employees, and any peace officer of this State, when so ordered, shall not in any way be responsible in any court for the seizure or the confiscation of any untaxed tobacco product.

§ 54:40B-14. Appeal to tax court; claim for refund

  • a. Any aggrieved taxpayer may, within 90 days after any decision, order, finding, assessment or action of the director made pursuant to the provisions of this act, appeal therefrom to the tax court in accordance with the provisions of the State Tax Uniform Procedure Law, R.S.54:48-1 et seq.
  • b. Any aggrieved executor, administrator, trustee, person or corporation liable for the payment of any tax imposed by this chapter that has neither protested or appealed from an additional assessment of tax may, pursuant to subsection (b) of R.S.54:49-14, file a claim for refund of the assessment paid.
  • c. The appeal provided by this section shall be the exclusive remedy available to any taxpayer for review of a decision of the director in respect of the determination of the liability of the taxpayer for the taxes imposed by this act.

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