210.05 Preparation and sale of stamps; discount

(3)(a) The division may appoint dealers in cigarettes, manufacturers of cigarettes, within or without the state as agent to buy or affix stamps to be used in paying the tax herein imposed, but an agent shall at all times have the right to appoint a person in his or her employ who is to affix the stamps to any cigarettes under the agent’s control; provided, however, that any wholesale dealer in the state shall have the right to buy and affix such stamps. Whenever the division shall sell and deliver to any such agent or wholesaler any such stamps, such agent or wholesaler shall be entitled to receive as compensation for his or her services and expenses as such agent or wholesaler in affixing and accounting for the taxes represented by such stamps and to retain out of the moneys to be paid by the agent or wholesaler for such stamps a discount of 2 percent of the par value of any amount of stamps purchased during any fiscal year from July 1 through June 30 of the following year, provided the discount shall be computed on the basis of 24 cents per pack. No such discount shall be allowed to a dealer, vendor, or distributor who sells or deals in any form of candy which resembles drug paraphernalia. Stamping locations approved by the division shall be responsible for computing the discount they receive pursuant to this paragraph, and said computations shall be retained by the stamping location for a period of 5 years and shall be available to the division. All stamps purchased from the division under this part shall be paid for in cash on delivery, except as hereinafter provided.

(b) Each agent appointed by the division to affix stamps shall be authorized to purchase stamps by furnishing an irrevocable letter of credit or unconditional guaranty contract or by executing bond with a solvent surety company qualified to do business in this state, in an amount of 110 percent of the agent’s estimated tax liability for 30 days, but not less than $2,000, conditioned upon said agent paying all taxes due the state arising hereunder. This form of payment in lieu of cash on delivery or its equivalent shall not preclude supplemental purchases for cash. Payment for each month’s liability shall be due on or before the 10th day of the month following the month in which the stamps were sold. Default in the aforesaid bonding and payment provisions by any agent may result in the revocation of his or her privilege to purchase stamps except for cash on delivery for a period up to 12 months in the discretion of the division.