CSSB 168(FIN) am: "An Act relating to issuance and revocation of licenses for the importation, sale, distribution, or manufacture of cigarettes and tobacco products; relating to a tax refund or credit for unsaleable, returned, or destroyed tobacco products; relating to restrictions on and penalties for shipping or transporting cigarettes; relating to records concerning the sale of cigarettes; amending and adding definitions relating to cigarette taxes; relating to the payment of cigarette taxes; relating to penalties applicable to cigarette taxes; relating to the definition of the wholesale price of tobacco products; relating to payment of cigarette taxes through the use of cigarette tax stamps; relating to provisions making certain cigarettes contraband and subject to seizure and forfeiture; relating to certain crimes, penalties, and interest concerning tobacco taxes and stamps; relating to cigarette sales; and providing for an effective date."
00 CS FOR SENATE BILL NO. 168(FIN) am 01 "An Act relating to issuance and revocation of licenses for the importation, sale, 02 distribution, or manufacture of cigarettes and tobacco products; relating to a tax refund 03 or credit for unsaleable, returned, or destroyed tobacco products; relating to restrictions 04 on and penalties for shipping or transporting cigarettes; relating to records concerning 05 the sale of cigarettes; amending and adding definitions relating to cigarette taxes; 06 relating to the payment of cigarette taxes; relating to penalties applicable to cigarette 07 taxes; relating to the definition of the wholesale price of tobacco products; relating to 08 payment of cigarette taxes through the use of cigarette tax stamps; relating to provisions 09 making certain cigarettes contraband and subject to seizure and forfeiture; relating to 10 certain crimes, penalties, and interest concerning tobacco taxes and stamps; relating to 11 cigarette sales; and providing for an effective date." 12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
01 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 02 to read: 03 SHORT TITLE. AS 43.50.710 - 43.50.849, enacted in sec. 19 of this Act, may be 04 known as the Unfair Cigarette Sales Act. 05 * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 INTENT OF AS 43.50.710 - 43.50.849. It is the intent of AS 43.50.710 - 43.50.849, 08 enacted in sec. 19 of this Act, to 09 (1) encourage fair and honest competition and to safeguard the public against 10 unfair, dishonest, deceptive, destructive, and fraudulent business practices existing in 11 transactions involving the sale of, offer to sell, or inducement to sell cigarettes in the 12 wholesale and retail trades in the state; 13 (2) prohibit the advertising, offering for sale, or sale of cigarettes below cost 14 in the wholesale or retail trades with the intent of injuring competitors or destroying or 15 substantially lessening competition as an unfair and deceptive trade practice; and 16 (3) promote the general welfare and public interest through the prohibition of 17 unfair cigarette sales. 18 * Sec. 3. AS 43.50.035 is amended to read: 19 Sec. 43.50.035. Wholesaler-distributor license. A person outside of this 20 state who sells cigarettes into this state and is not required to be licensed under 21 AS 43.50.010 may apply [QUALIFY] for a wholesaler-distributor license [BY 22 FURNISHING A GOOD AND SUFFICIENT SURETY BOND IN AN AMOUNT 23 EQUAL TO TWICE THE AVERAGE MONTHLY RETURN AND IN NO CASE 24 LESS THAN $5,000, PAYABLE TO THE DEPARTMENT AND APPROVED BY 25 THE DEPARTMENT OF LAW. IF A WHOLESALER-DISTRIBUTOR FAILS TO 26 PAY THE CIGARETTE TAX WHEN DUE, THE BOND MAY BE FORFEITED 27 AND THE LICENSE REVOKED]. The department shall adopt reasonable 28 regulations necessary for the collection of cigarette taxes on cigarette sales made 29 by the [MAY ISSUE PERMITS IN PLACE OF BONDS TO RESIDENT HOLDERS 30 OF] wholesaler-distributor licensee into this state and standards for 31 (1) application and issuance of the license; and
01 (2) refusal to issue the license [LICENSES DOING BUSINESS 02 WHOLLY IN THE STATE WHO PAY THE TAX BEFORE SHIPMENT]. 03 * Sec. 4. AS 43.50.040 is amended to read: 04 Sec. 43.50.040. Expiration of licenses. A license issued under AS 43.50.010 05 or 43.50.035 expires on June 30 [,] following the date of issue. If a license is revoked, 06 or the business for which the license is issued changes ownership or the licensee 07 changes the place of business from the premises covered by the license, the licensee 08 shall immediately return the license to the department. If the licensee moves the 09 business to another location in the state, the license shall, upon the payment of a fee of 10 50 cents, be reissued for the new location for the balance of the unexpired term. 11 Before a license issued under AS 43.50.010 or 43.50.035 expires, the [THE] 12 licensee may apply to [, ON APPLICATION TO THE DEPARTMENT 13 ACCOMPANIED BY THE RENEWAL FEE, MAY, BEFORE THE EXPIRATION 14 OF THE LICENSE,] renew the license for one year from the expiration date of the 15 license. The renewal fee required by AS 43.50.030 must accompany the 16 application. The department shall adopt reasonable regulations that it considers 17 necessary regarding the renewal of licenses. 18 * Sec. 5. AS 43.50.070 is amended to read: 19 Sec. 43.50.070. Suspension or revocation of or refusal to renew a license 20 [REVOCATION OF LICENSES]. The department may suspend, [OR] revoke, or 21 refuse to renew a license issued under this chapter [AS 43.50.010 - 43.50.180] (1) 22 for a negligent violation of AS 11.76.100, 11.76.106, 11.76.107, or a violation of this 23 chapter [AS 43.50.010 - 43.50.180] or a regulation of the department adopted under 24 this chapter [AS 43.50.010 - 43.50.180]; (2) if a licensee ceases to act in the capacity 25 for which the license was issued; or (3) if a licensee [MANUFACTURER, 26 DISTRIBUTOR, OR WHOLESALE DISTRIBUTOR] negligently sells tobacco or 27 products containing tobacco to a person who is required to, but does not, hold a 28 license endorsement under AS 43.70.075 or [NONLICENSED RETAILER OR A 29 RETAILER] whose license endorsement under AS 43.70.075 has been suspended. A 30 person whose license is suspended or revoked may not sell cigarettes or tobacco 31 products, or permit cigarettes or tobacco products to be sold, during the period of
01 the suspension or revocation on the premises occupied or controlled by that person. A 02 disciplinary proceeding or action is not barred or abated by the expiration, transfer, 03 surrender, renewal, or extension of a license issued under this chapter [AS 43.50.010 04 - 43.50.180]. The department shall comply with the provisions of AS 44.62 ( [THE] 05 Administrative Procedure Act), except that a hearing officer of the department, 06 rather than a hearing officer assigned under AS 44.62.350, may conduct hearings 07 [(AS 44.62)]. 08 * Sec. 6. AS 43.50.070 is amended by adding a new subsection to read: 09 (b) In this section, "licensee" means a person licensed under AS 43.50.010 - 10 43.50.180 or 43.50.300 - 43.50.390. 11 * Sec. 7. AS 43.50.090(a) is amended to read: 12 (a) There is levied an excise tax of 38 mills on each cigarette imported or 13 acquired in the state. The tax shall be paid through the use of stamps as provided 14 in AS 43.50.500 - 43.50.700. The failure to pay the tax through the use of stamps 15 does not relieve a person of the obligation to pay taxes due under this chapter. 16 The person shall still pay the tax, and the tax is due on or before the end of the 17 month following the month in which cigarettes were manufactured, imported, 18 acquired, or sold in this state [EACH LICENSEE SHALL, AT THE TIME OF 19 FILING THE RETURN REQUIRED BY AS 43.50.080, PAY TO THE 20 DEPARTMENT THE EXCISE FOR THE CALENDAR MONTH COVERED BY 21 THE RETURN, DEDUCTING FOUR-TENTHS OF ONE PERCENT OF THE 22 TOTAL TAX DUE, WHICH THE LICENSEE SHALL RETAIN TO COVER THE 23 EXPENSE OF ACCOUNTING AND FILING RETURNS]. Cigarettes upon which 24 the excise is imposed are not again subject to the excise when acquired by another 25 person. 26 * Sec. 8. AS 43.50.090 is amended by adding a new subsection to read: 27 (d) The tax imposed under (a) of this section does not apply to the first 100 28 cigarettes imported by an individual for personal consumption during the calendar 29 month. 30 * Sec. 9. AS 43.50.100(d) is amended to read: 31 (d) A person or licensee who is in control or possession of cigarettes contrary
01 to this chapter [AS 43.50.010 - 43.50.180,] or who offers to sell or dispose of 02 cigarettes to others for the purpose of resale without being licensed to do so is 03 considered to have possession of the cigarettes as a consumer and is personally liable 04 for the cigarette taxes imposed by this chapter [TAX], plus a penalty of 100 percent 05 [PER CENT]. 06 * Sec. 10. AS 43.50 is amended by adding a new section to read: 07 Sec. 43.50.105. Restrictions on shipping or transporting cigarettes. (a) A 08 person who is not licensed under this chapter may not ship or cause to be shipped 09 cigarettes to a person in this state unless the person receiving the cigarettes is 10 (1) licensed under this chapter; 11 (2) an operator of a customs bonded warehouse under 19 U.S.C. 1311 12 or 19 U.S.C. 1555; or 13 (3) an instrumentality of the federal government or an Indian tribal 14 organization authorized by law to possess cigarettes not taxed under this chapter. 15 (b) A person who is licensed under this chapter may not ship or cause to be 16 shipped cigarettes to a person in this state unless the person receiving the cigarettes 17 (1) is licensed under this chapter; 18 (2) holds a tobacco endorsement under AS 43.70.075; 19 (3) is an operator of a customs bonded warehouse under 19 U.S.C. 20 1311 or 19 U.S.C. 1555; or 21 (4) is an instrumentality of the federal government or an Indian tribal 22 organization authorized by law to possess cigarettes not taxed under this chapter. 23 (c) A common or contract carrier may not knowingly transport cigarettes to a 24 person in this state unless the person 25 (1) shipping the cigarettes is licensed under this chapter and provides 26 the common or contract carrier with a copy of the person's current license issued by 27 the department and the person receiving the cigarettes is a person described under 28 (b)(1) - (4) of this section; or 29 (2) receiving the cigarettes is a person described under (a)(2) or (3) of 30 this section or is licensed under this chapter and provides the common or contract 31 carrier with a copy of the person's current license issued by the department.
01 (d) If the cigarettes are transported by a common or contract carrier to a home 02 or residence, it is rebuttably presumed that the common or contract carrier knew that 03 the person receiving the cigarettes was not a person described under (b)(1) - (4) of this 04 section. 05 (e) A person, other than a common or contract carrier, may not knowingly 06 transport cigarettes to a person in this state, unless the person receiving the cigarettes 07 is a person described under (b)(1) - (4) of this section. 08 (f) A person who ships or causes to be shipped cigarettes to a person in this 09 state shall plainly and visibly mark the container or wrapping with the word 10 "cigarettes" if the cigarettes are shipped in a container or wrapping other than the 11 cigarette manufacturer's original container or wrapping. 12 (g) A person who violates the provisions of this section is guilty of a 13 (1) class A misdemeanor if the person unlawfully ships, causes to be 14 shipped, or transports at least one but fewer than 1,000 cigarettes; 15 (2) class C felony if the person unlawfully ships, causes to be shipped, 16 or transports 1,000 or more cigarettes. 17 (h) In addition to the criminal penalty under (g) of this section, the department 18 may assess a civil fine of not more than $5,000 for each violation of this section. 19 * Sec. 11. AS 43.50.130(d) is amended to read: 20 (d) An invoice for the sale of cigarettes given or accepted by a licensee under 21 this chapter [AS 43.50.010 - 43.50.180] must state whether the taxes [TAX] imposed 22 by this chapter have [AS 43.50.010 - 43.50.180 HAS] been paid. 23 * Sec. 12. AS 43.50.170(7) is amended to read: 24 (7) "person" includes an individual, company, partnership, limited 25 liability partnership, joint venture, joint agreement, limited liability company, 26 association, mutual or otherwise, corporation, estate, trust, business trust, receiver, 27 trustee, syndicate, or political subdivision of this state, or combination acting as a unit; 28 * Sec. 13. AS 43.50.170 is amended by adding new paragraphs to read: 29 (11) "tobacco product" has the meaning given in AS 43.50.390; 30 (12) "wholesaler-distributor" means a person outside this state who 31 sells or distributes cigarettes into this state and who is not required to be licensed
01 under AS 43.50.010. 02 * Sec. 14. AS 43.50.190(b) is amended to read: 03 (b) The tax levied by this section is in addition to the tax levied by 04 AS 43.50.010 - 43.50.180. The tax shall be administered and collected in the same 05 manner as the tax levied by AS 43.50.010 - 43.50.180, except that receipts from the 06 tax shall be deposited in the general fund. The penalties provided in AS 43.05 and 07 this chapter apply to the tax levied in this section. 08 * Sec. 15. AS 43.50.190 is amended by adding a new subsection to read: 09 (c) The tax imposed under (a) of this section does not apply to the first 100 10 cigarettes imported by an individual for personal consumption during the calendar 11 month. 12 * Sec. 16. AS 43.50.320(f) is amended to read: 13 (f) The department may suspend, [OR] revoke, or refuse to renew a license 14 issued under this section as provided in AS 43.50.070 [IF THE LICENSEE 15 VIOLATES A PROVISION OF AS 43.50.300 - 43.50.390 OR A REGULATION 16 ADOPTED UNDER AS 43.50.370]. 17 * Sec. 17. AS 43.50 is amended by adding a new section to read: 18 Sec. 43.50.335. Tax credits and refunds. The department shall adopt 19 procedures for a refund or credit to a licensee of the tax paid for tobacco products that 20 have become unfit for sale, are destroyed, or are returned to the manufacturer for 21 credit or replacement if the licensee provides proof acceptable to the department that 22 the tobacco products have not been and will not be consumed in this state. 23 * Sec. 18. AS 43.50.390(5) is repealed and reenacted to read: 24 (5) "wholesale price" means 25 (A) the established price for which a manufacturer sells a 26 tobacco product to a distributor after deduction of a discount or other reduction 27 received by the distributor for quantity or cash if the manufacturer's established 28 price is adequately supported by bona fide arm's length sales as determined by 29 the department; or 30 (B) the price, as determined by the department, for which 31 tobacco products of comparable retail price are sold to distributors in the
01 ordinary course of trade if the manufacturer's established price does not meet 02 the standards of (A) of this paragraph. 03 * Sec. 19. AS 43.50 is amended by adding new sections to read: 04 Article 5. Cigarette Tax Stamps. 05 Sec. 43.50.500. Tax payment by use of stamps. A licensee shall pay the tax 06 imposed under AS 43.50.090(a) and 43.50.190(a) through the use of stamps issued 07 under AS 43.50.500 - 43.50.700. 08 Sec. 43.50.510. Stamp design; manner of affixing. (a) The department shall 09 design and furnish stamps of sizes and denominations as determined by the 10 department. 11 (b) Notwithstanding the packaging requirements of AS 43.70.075(g)(1), a 12 stamp required under AS 43.50.500 - 43.50.700 must be affixed 13 (1) on the smallest package that will be handled, sold, used, consumed, 14 or distributed in this state; and 15 (2) in a denomination equal to the amount of tax due under this chapter 16 on the cigarettes in the package. 17 (c) A stamp required under AS 43.50.500 - 43.50.700 shall be affixed to the 18 bottom of each individual package of cigarettes in a manner so that the stamp cannot 19 be removed from the package without being mutilated or destroyed. 20 (d) For purposes of this section, a stamp is considered affixed only if more 21 than 80 percent of the stamp is attached to the individual package in accordance with 22 (c) of this section and regulations adopted by the department. 23 Sec. 43.50.520. Stamp required before sale, distribution, or consumption. 24 (a) Except as provided in AS 43.50.580, a licensee or the authorized agent or designee 25 of the licensee shall affix a stamp, in the manner required by AS 43.50.510, to each 26 package of cigarettes immediately upon the opening of the shipping container 27 containing the package and before sale, distribution, or consumption in this state. 28 (b) Except as provided in AS 43.50.580 and 43.50.610, a person may not 29 engage in the following activities in this state unless the package containing the 30 cigarettes is affixed with the required stamp: 31 (1) sell or distribute cigarettes to a person who is a consumer in this
01 state; 02 (2) acquire, hold, own, possess, or transport cigarettes for sale or 03 distribution in this state; 04 (3) import or cause to be imported cigarettes into this state for sale, 05 distribution, or consumption; or 06 (4) place or store cigarette packages in a vending machine in this state. 07 Sec. 43.50.530. Sale of stamps. (a) The department shall furnish stamps for 08 sale to licensees. 09 (b) The department may enter into agreements with financial institutions to 10 permit the sale of stamps by those institutions. The department shall make a list of 11 financial institutions authorized to sell stamps under this section available to the 12 public. 13 Sec. 43.50.540. Purchase of and payment for stamps. (a) A licensee shall 14 apply to the department or a financial institution authorized under AS 43.50.530(b) to 15 purchase stamps required by AS 43.50.500 - 43.50.700. 16 (b) A licensee may authorize an agent or designee to purchase stamps for the 17 licensee at a location where stamps are sold. The licensee's authorization of an agent 18 or designee must be in writing and must be signed by the licensee. The licensee shall 19 provide a copy of the authorization to the department. The authorization continues in 20 effect until the department receives the licensee's written notice of revocation of the 21 authorization. 22 (c) Except as otherwise provided in this subsection, each stamp shall be sold 23 to a licensee at its denominated value less the discount provided in this subsection. 24 The discount under this subsection is provided as compensation for affixing stamps to 25 packages as required by AS 43.50.500 - 43.50.700. The department may reduce or 26 eliminate the discount to a licensee under this subsection if the licensee fails to meet 27 the requirements of AS 43.50.500 - 43.50.700. The discount under this subsection is 28 equal to the sum of the amounts calculated using the following percentages of 29 denominated value of stamps purchased by a licensee under this section in a calendar 30 year: 31 (1) $1,000,000 or less, three percent;
01 (2) the amount that is more than $1,000,000 but not more than 02 $2,000,000, two percent; 03 (3) the amount that is over $2,000,000, zero percent. 04 (d) Payment for stamps shall be made at the time of purchase, except that the 05 department may permit a licensee to defer payments as provided in AS 43.50.550. 06 (e) The licensee or the licensee's agent or designee must obtain the stamps in 07 person from the department or a financial institution authorized to sell stamps under 08 AS 43.50.530(b). Alternatively, the licensee may request in writing that the stamps be 09 shipped or transported in a manner specified by the licensee that is acceptable to the 10 department. The department may accept only United States mail or common or 11 private carrier as a shipping or transportation method. 12 (f) Title to the stamps passes immediately to the licensee at the time the 13 stamps are obtained in person or, if the stamps are shipped or transported, at the time 14 the stamps are placed in the United States mail or received by the common or private 15 carrier. The licensee bears all costs associated with shipping or transporting the 16 stamps and all risks of possible loss or damage while in transit. 17 (g) Loss, destruction, or theft of stamps does not absolve the licensee of its 18 obligation to make payment for the stamps, including payment on a deferred-payment 19 basis under AS 43.50.550. 20 (h) For purposes of the discount provided in (c) of this section, "stamps 21 purchased by a licensee" includes stamps purchased by affiliated licensees. 22 Sec. 43.50.550. Deferred-payment basis for stamps. (a) A licensee may 23 apply to the department to purchase stamps on a deferred-payment basis. Upon 24 receipt of the application and the bond required under (b) of this section, the 25 department may set the maximum dollar amount of stamps that the licensee is 26 authorized to purchase on a deferred-payment basis in a calendar month. 27 (b) A licensee who submits an application for the purchase of stamps on a 28 deferred-payment basis shall post a bond acceptable to the department in an amount 29 equal to 200 percent of the maximum dollar amount of allowed monthly purchases 30 under this section as a condition of approval of the application. 31 (c) Amounts owing for stamps purchased on a deferred-payment basis in a
01 calendar month are due on or before the last day of the next calendar month. Payment 02 shall be made by a remittance acceptable to the department that is made payable to the 03 department. 04 (d) The department may designate the sales locations where the licensee may 05 make purchases of stamps on a deferred-payment basis and fix the dollar amount of 06 purchases that the licensee may make under this section at each designated sales 07 location each month. 08 Sec. 43.50.560. Suspension of deferred-payment basis privilege. The 09 department may suspend, without prior notice, a licensee's privilege to purchase 10 stamps on a deferred-payment basis or may reduce the monthly dollar amount of 11 purchases the licensee may make under AS 43.50.550 if 12 (1) the licensee fails to pay for stamps when payment is due; 13 (2) the licensee's bond is cancelled or becomes void, impaired, or 14 unenforceable; 15 (3) the department determines that the collection of an amount unpaid 16 or due from the licensee under this chapter is jeopardized; or 17 (4) the licensee violates a state statute or regulation related to the 18 collection of taxes under this chapter. 19 Sec. 43.50.570. Interest. A licensee who fails to pay an amount due for the 20 purchase of stamps within the time required 21 (1) is considered to have failed to pay the cigarette taxes due under this 22 chapter; and 23 (2) shall pay interest at the rate established under AS 43.05.225 from 24 the date on which the amount became due until the date of payment. 25 Sec. 43.50.580. Possession of unstamped cigarettes. (a) Except as provided 26 in (b) of this section and in AS 43.50.610, a person may not possess unstamped 27 cigarettes in this state. 28 (b) A licensee may possess unstamped cigarettes in this state if 29 (1) the licensee posts a surety bond in an amount satisfactory to the 30 department to ensure performance of its duties under this chapter; and 31 (2) unstamped cigarettes are necessary for the conduct of the licensee's
01 business in making sales or distributions to an instrumentality of the federal 02 government or an Indian tribal organization authorized by law to possess cigarettes not 03 taxed under this chapter. 04 (c) At the time of shipping or delivering cigarettes to an instrumentality of the 05 federal government or an Indian tribal organization authorized by law to possess 06 cigarettes not taxed under this chapter, a licensee shall make a duplicate invoice 07 showing complete details of the shipment or other distribution and a statement 08 indicating whether stamps were affixed to each cigarette package in accordance with 09 AS 43.50.500 - 43.50.700. The licensee shall transmit the duplicate invoice to the 10 department as an attachment to the monthly report required under AS 43.50.630. 11 (d) If a licensee who is authorized to possess unstamped cigarettes under (b) 12 of this section fails to comply with the requirements of this section, the licensee is no 13 longer authorized to and may not possess unstamped cigarettes under this section and 14 is subject to the imposition of any applicable penalty under this title or other law. 15 (e) For purposes of (a) of this section, "person" does not include entities to 16 whom sales or distributions are made as described in (b)(2) of this section. 17 Sec. 43.50.590. Refunds or credits for unused stamps and for unsalable, 18 destroyed, or certain returned cigarette packages. (a) The department shall adopt 19 procedures for a refund or credit to a licensee in the amount of the denominated value, 20 less the discount given under AS 43.50.540, for 21 (1) unused or damaged stamps; or 22 (2) stamps affixed to cigarette packages that have become unfit for use 23 or sale, are destroyed, or are returned to the manufacturer for credit or replacement if 24 the licensee provides proof acceptable to the department that the cigarettes have not 25 been and will not be consumed in this state. 26 (b) A refund or credit under (a) of this section may not be allowed for stamps 27 affixed to cigarette packages in violation of this chapter or AS 45.53. 28 Sec. 43.50.600. Stamps prohibited on cigarette packages not complying 29 with federal and state laws. A licensee or the licensee's authorized agent or designee 30 may not affix a stamp to a cigarette package if the cigarettes 31 (1) may not be acquired, held, owned, imported, possessed, sold, or
01 distributed in this state under AS 43.50.400; or 02 (2) are not in compliance with other state or federal laws. 03 Sec. 43.50.610. Unstamped cigarettes as contraband; seizure. Unstamped 04 cigarettes found in this state are contraband and may be seized by the commissioner or 05 an agent or employee of the commissioner or by any peace officer of the state, unless 06 (1) the cigarettes are 07 (A) in the possession of a licensee or are in transit from outside 08 the state and are consigned to a licensee; and 09 (B) in the original and unopened shipping container; or 10 (2) possession of the unstamped cigarettes is not a violation of this 11 chapter. 12 Sec. 43.50.620. Forfeiture and destruction of seized cigarettes. Cigarettes 13 seized under AS 43.50.500 - 43.50.700 are forfeited to the state. After notice and an 14 opportunity for a hearing, the commissioner shall destroy the cigarettes forfeited under 15 this section. 16 Sec. 43.50.630. Monthly reports; records retention; inspection of records. 17 (a) On or before the last day of each calendar month, a licensee shall file the 18 following information for each place of business with the department, on a form or in 19 a format prescribed by the department: 20 (1) the quantity and brands of cigarettes manufactured, imported, 21 acquired, or sold in the state during the preceding calendar month; 22 (2) the number and dollar amount of stamps 23 (A) purchased during the preceding calendar month; 24 (B) affixed to cigarette packages during the preceding calendar 25 month; 26 (C) not affixed to cigarette packages and on hand at the end of 27 the preceding calendar month; and 28 (D) refunded or credited to a licensee under AS 43.50.590; and 29 (3) any other information that the department requires to carry out its 30 duties under this chapter. 31 (b) If a licensee ceases to manufacture, import, acquire, or sell cigarettes in
01 this state, the licensee shall immediately file the form required under (a) of this section 02 with the department, for the period ending with the cessation. 03 (c) All statements and other records required by AS 43.50.500 - 43.50.700 04 must be 05 (1) in a form or format prescribed by the department; 06 (2) preserved by a licensee for a period of three years; and 07 (3) available for inspection at any time upon oral or written demand by 08 the department or its authorized agent. 09 (d) A summary of information filed under (a) of this section shall be prepared 10 by the department and released to the public upon request. 11 Sec. 43.50.640. Misconduct involving unstamped cigarettes or stamps in 12 the first degree. (a) A person commits the crime of misconduct involving unstamped 13 cigarettes or stamps in the first degree if the person 14 (1) with reckless disregard that the cigarettes are unstamped 15 (A) sells or distributes 1,000 or more unstamped cigarettes in a 16 single transaction; 17 (B) owns or possesses 1,000 or more unstamped cigarettes with 18 the intent to sell; or 19 (C) acquires, holds, transports, imports, or possesses 10,000 or 20 more unstamped cigarettes; or 21 (2) with reckless disregard that the stamp was previously affixed to 22 another cigarette package; 23 (A) affixes a previously used stamp to a cigarette package; or 24 (B) possesses, sells, or distributes a previously used stamp. 25 (b) Misconduct involving unstamped cigarettes or stamps in the first degree is 26 a class C felony. 27 Sec. 43.50.650. Misconduct involving unstamped cigarettes or stamps in 28 the second degree. (a) A person commits the crime of misconduct involving 29 unstamped cigarettes or stamps in the second degree if the person 30 (1) with reckless disregard that the cigarettes are unstamped 31 (A) sells or distributes at least one but less than 1,000
01 unstamped cigarettes in a single transaction; 02 (B) owns or possesses at least one but less than 1,000 03 unstamped cigarettes, with intent to sell; or 04 (C) acquires, holds, transports, imports, or possesses at least 05 one but less than 10,000 unstamped cigarettes; or 06 (2) is not licensed under this chapter or otherwise authorized by the 07 department to possess stamps and possesses a stamp that is not affixed to a cigarette 08 package. 09 (b) Misconduct involving unstamped cigarettes or stamps in the second degree 10 is a class A misdemeanor. 11 Sec. 43.50.660. Construction of criminal statutes. (a) The provisions of 12 AS 11.16, AS 11.81.600, 11.81.610, and 11.81.900 apply to AS 43.50.640 and 13 43.50.650. 14 (b) For purposes of AS 43.50.640 and 43.50.650, display of cigarettes by a 15 person, or possession other than in the original and unopened shipping container of 16 cigarettes by a person who holds a business license endorsement under AS 43.70.075, 17 is prima facie evidence of possession with intent to sell cigarettes. In this subsection, 18 "display" means to openly exhibit. 19 Sec. 43.50.670. Unauthorized transfer of unaffixed stamps. (a) A licensee 20 may not sell, exchange, or otherwise transfer stamps not affixed to a package of 21 cigarettes in accordance with this chapter to another person without the prior written 22 approval of the department. 23 (b) After notice and opportunity for a hearing, the department may assess a 24 civil fine of not less than $1,000 nor more than $10,000 for a violation of (a) of this 25 section. The fine assessed is in addition to any other penalty available under the law. 26 Sec. 43.50.700. Definitions. In AS 43.50.500 - 43.50.700, unless the context 27 otherwise requires, 28 (1) "affiliated licensees" means two or more licensees in which the 29 same person holds, directly or indirectly, at least a 50 percent ownership interest; 30 (2) "carton" means a box or container originating from the 31 manufacturer that contains packages of that manufacturer's cigarettes;
01 (3) "cigarette" has the meaning given in AS 43.50.170; 02 (4) "licensee" means a person licensed by the department under 03 AS 43.50.010 or 43.50.035 to sell, distribute, purchase, possess, or acquire cigarettes; 04 (5) "package" means the individual packet, box, or other container, 05 originating from the manufacturer, in which retail sales of cigarettes are normally 06 made or intended to be made; "package" does not include containers that are cartons, 07 cases, bales, or boxes that contain packages of cigarettes; 08 (6) "person" has the meaning given in AS 43.50.170; 09 (7) "shipping container" means the case, box, parcel, or other container 10 in which cartons or packages of cigarettes are placed for shipment or transportation 11 from one place to another; "shipping container" does not include a package in which 12 retail sales of cigarettes are normally made or intended to be made; 13 (8) "stamp" means a stamp or other indicium that is 14 (A) printed, manufactured, or made under authorization of the 15 department under this chapter; 16 (B) issued, sold, or circulated by the department; and 17 (C) used to pay the cigarette taxes levied under this chapter; 18 (9) "unstamped cigarettes" means a package containing cigarettes that 19 is not affixed with the stamp required by AS 43.50.500 - 43.50.700. 20 Article 6. Unfair Cigarette Sales. 21 Sec. 43.50.710. Sale at less than cost; rebate in price. (a) A wholesaler or 22 retailer may not, with intent to injure competitors or destroy or substantially lessen 23 competition, 24 (1) advertise, offer to sell, or sell, at retail or wholesale, cigarettes at 25 less than actual cost to the wholesaler or retailer; or 26 (2) offer a rebate in price, give a rebate in price, offer a concession of 27 any kind, or give a concession of any kind or nature in connection with the sale of 28 cigarettes. 29 (b) A retailer may not induce or attempt to induce or procure or attempt to 30 procure 31 (1) the purchase of cigarettes at a price less than the actual cost to a
01 wholesaler; 02 (2) a rebate or concession of any kind or nature in connection with the 03 purchase of cigarettes. 04 (c) Evidence of advertisement, offering to sell, or sale of cigarettes by a 05 wholesaler or retailer at less than actual cost, or evidence of an offer of a rebate in the 06 price, the giving of a rebate in price, offer of a concession, or the giving of a 07 concession of any kind or nature in connection with the sale of cigarettes, or the 08 inducing, attempt to induce, the procuring, or the attempt to procure the purchase of 09 cigarettes at a price less than actual cost to a wholesaler or retailer is prima facie 10 evidence of intent to injure competitors and to destroy or substantially lessen 11 competition. 12 (d) A wholesaler or retailer who violates the provisions of this section is guilty 13 of a class B misdemeanor. 14 Sec. 43.50.720. Sale at less than cost; with gift or concession. In all 15 advertisements, offers for sale, or sales involving two or more items when at least one 16 of the items is cigarettes at a combined price, and in all advertisements, offers for sale, 17 or sales involving the giving of any gift, concession, or coupon of any kind in 18 conjunction with the sale of cigarettes, the wholesaler's or retailer's combined selling 19 price may not be below the actual cost to the wholesaler or the actual cost to the 20 retailer, respectively, of the total of all articles, products, commodities, gifts, and 21 concessions included in the transactions, except that, if any articles, products, 22 commodities, gifts, or concessions are not cigarettes, the basic cost shall be 23 determined as provided under AS 43.50.800. 24 Sec. 43.50.730. Sale to another wholesaler. When one wholesaler sells 25 cigarettes to another wholesaler, the seller is not required to include the actual cost of 26 the selling wholesaler. Upon resale to a retailer, the purchasing wholesaler is required 27 to include the actual cost of the purchasing wholesaler or the actual cost of the selling 28 wholesaler, whichever is greater, in the selling price. 29 Sec. 43.50.740. Sales at price to meet competition. (a) A wholesaler may 30 advertise, offer to sell, or sell cigarettes at a price made in good faith to meet the price 31 of a competitor who is rendering the same type of service and is selling the same
01 article at cost to a competing wholesaler. A retailer may advertise, offer to sell, or sell 02 cigarettes at a price made in good faith to meet the price of a competitor who is selling 03 the same article at cost to a competing retailer. 04 (b) In the absence of proof of the actual cost to a competing wholesaler or the 05 competing retailer, actual cost may be presumed to be the presumptive wholesale cost 06 to the wholesaler or the presumptive retail cost to the retailer as determined by the 07 department from the manufacturer's price list. 08 (c) A manufacturer whose product is sold in the state directly or through an 09 intermediary shall provide the department with a current price list for all brands of 10 cigarettes of the manufacturer and shall notify the department at least 10 days before a 11 price increase takes effect. 12 Sec. 43.50.750. Contracts in violation of law are illegal. A contract, express 13 or implied, made by a person in violation of the provisions of AS 43.50.710 - 14 43.50.849 is illegal and void. 15 Sec. 43.50.760. Determination of cost. (a) In determining actual cost to the 16 wholesaler or retailer, a court shall consider as establishing the cost evidence tending 17 to show that a wholesaler or retailer complained against under a provision of 18 AS 43.50.710 - 43.50.849 purchased the cigarettes involved in the complaint at a 19 fictitious price, or upon terms, in a manner, or under invoices, in a manner that 20 conceals the true cost, discounts, or terms of purchase. The court shall also consider 21 evidence of the normal, customary, and prevailing terms and discounts in connection 22 with other sales of a similar nature in the state. 23 (b) The presumptive wholesale and presumptive retail cost of cigarettes as 24 determined by the department from the manufacturer's price list is considered 25 competent evidence in a court action or proceeding as tending to prove actual cost to 26 the wholesaler or retailer complained against. A party against whom the presumptive 27 wholesale or presumptive retail cost as determined by the department is introduced in 28 evidence has the right to offer evidence tending to prove any inaccuracy of the 29 presumptive wholesale or presumptive retail cost or any statement of facts that would 30 impair its probative value. 31 Sec. 43.50.770. Determination of cost of cigarettes purchased outside of
01 ordinary channels of trade. In establishing the basic cost of cigarettes to a 02 wholesaler or retailer, the invoice cost or the actual cost of cigarettes purchased at a 03 forced, bankrupt, or closeout sale, or other sale outside the ordinary channels of trade 04 may not be used. 05 Sec. 43.50.780. Injunction. (a) The department or a person injured by a 06 violation or who would suffer from any threatened violation of AS 43.50.710 - 07 43.50.849 may maintain an action to prevent, restrain, or enjoin the violation or 08 threatened violation. If, in the action, a violation or threatened violation of 09 AS 43.50.710 - 43.50.849 is established, the court may enjoin and restrain or 10 otherwise prohibit the violation or threatened violation, and the court shall assess the 11 costs of reasonable attorney fees against the defendant. In the action, it is not 12 necessary that actual damages to the plaintiff be alleged or proved, but, if actual 13 damages are alleged and proved, the plaintiff, in addition to injunctive relief and costs, 14 including reasonable attorney fees, may recover actual damages. 15 (b) If injunctive relief is not requested or required, a person injured by a 16 violation of AS 43.50.710 - 43.50.849 may maintain an action for damages in the 17 appropriate court. 18 Sec. 43.50.790. Administration of AS 43.50.710 - 43.50.849. (a) The 19 department 20 (1) shall administer AS 43.50.710 - 43.50.849; 21 (2) may adopt regulations relating to the administration and 22 enforcement of AS 43.50.710 - 43.50.849; 23 (3) may determine the basic cost of cigarettes to a wholesaler or 24 retailer from information obtained from a manufacturer; 25 (4) may, after reasonable notice and hearing, revoke or suspend a 26 license issued under AS 43.50.010 or 43.50.035 to a person who refuses or neglects to 27 comply with a provision of AS 43.50.710 - 43.50.849. 28 (b) The Department of Community and Economic Development may, after 29 reasonable notice and hearing, revoke or suspend a license issued under AS 43.70.075 30 to a person who refuses or neglects to comply with a provision of AS 43.50.710 - 31 43.50.849.
01 Sec. 43.50.800. Presumptions applicable to determination of cost. (a) For 02 purposes of AS 43.50.710 - 43.50.849, 03 (1) the basic cost of cigarettes is equal to the lower of the two 04 following amounts: 05 (A) the invoice cost of cigarettes to the wholesaler or retailer 06 less all trade discounts except customary discounts for cash, plus the full face 07 value of any tax that may be required by this chapter if not already included in 08 the invoice cost of the cigarettes to the wholesaler or retailer; or 09 (B) the lowest replacement cost of cigarettes to the wholesaler 10 or retailer, within 30 days before the date of sale, in the quantity last 11 purchased, within or before the 30-day period, less all trade discounts except 12 customary discounts for cash, plus the full face value of any tax that may be 13 required by this chapter if not already included in the invoice cost of the 14 cigarettes to the wholesaler or retailer; 15 (2) the actual cost to the wholesaler is equal to the basic cost of the 16 cigarettes acquired by the wholesaler plus the cost of doing business by the 17 wholesaler, as evidenced by the standards and methods of accounting regularly 18 employed by the wholesaler, and includes labor costs, rent, depreciation, selling costs, 19 maintenance of equipment, delivery costs, all types of licenses, taxes, insurance, and 20 advertising; 21 (3) in the absence of proof of a lesser or higher cost of doing business 22 by the wholesaler making the sale, the cost of doing business by the wholesaler is 23 presumed to be four and one-half percent of the basic cost of the cigarettes to the 24 wholesaler; a fraction of a cent used in computing the cost of doing business shall be 25 rounded off to the next highest cent; 26 (4) the actual cost to the retailer is equal to the basic cost of the 27 cigarettes plus the cost of doing business by the retailer; the cost of doing business 28 may be proven by the standards and methods of accounting regularly employed by the 29 retailer and must include labor costs, rent, depreciation, selling costs, maintenance of 30 equipment, delivery costs, all types of licenses, taxes, insurance, and advertising; 31 (5) in the absence of proof of a lesser or higher cost of doing business
01 by the retailer making the sale, the cost of doing business by the retailer is presumed to 02 be six percent of the basic cost of cigarettes to the retailer; a fraction of a cent used in 03 computing the cost of doing business shall be rounded off to the next highest cent. 04 (b) In the absence of proof of a lesser or higher actual cost to the 05 (1) wholesaler, the actual cost is presumed to be the presumptive 06 wholesale cost as determined by the department; and 07 (2) retailer, the actual cost is presumed to be the presumptive retail 08 cost as determined by the department. 09 (c) In the absence of the manufacturer's list price for a particular brand of 10 cigarettes, the department may determine the presumptive wholesale cost or the 11 presumptive retail cost of the cigarettes from the average price of cigarettes for other 12 similar brands for which the department has the manufacturer's list price. 13 Sec. 43.50.849. Definitions. In AS 43.50.710 - 43.50.849, 14 (1) "basic wholesale cost" means the manufacturer's list price less trade 15 discounts, except discounts for cash, plus the full face value of any tax required by this 16 chapter; 17 (2) "cigarette" has the meaning given in AS 43.50.170; 18 (3) "department" means the Department of Revenue; 19 (4) "direct-buying retailer" has the meaning given in AS 43.50.170; 20 (5) "person" has the meaning given in AS 43.50.170; 21 (6) "presumptive retail cost" means the presumptive wholesale cost 22 plus six percent of the presumptive wholesale cost; 23 (7) "presumptive wholesale cost" means the basic wholesale cost plus 24 four and one-half percent of the basic wholesale cost; 25 (8) "retailer" has the meaning given in AS 43.50.170 and includes a 26 person licensed or required to be licensed as a direct-buying retailer under this chapter 27 and a person who holds or is required to hold a license endorsement under 28 AS 43.70.075; 29 (9) "sale" has the meaning given in AS 43.50.170; 30 (10) "sell at retail," "sale at retail," or "retail sales" means a sale for 31 consumption or use made in the ordinary course of trade or usual conduct of the
01 seller's business; 02 (11) "sell at wholesale," "sale at wholesale," or "wholesale sales" 03 means a sale made in the ordinary course of trade or usual conduct by a wholesaler to 04 a retailer for the purpose of resale; 05 (12) "trade discount" means a price reduction that is offered by a 06 cigarette manufacturer on the date of sale, is reflected on the invoice as a deduction 07 from the manufacturer's list price, and is fully earned and determinable on the date of 08 sale; 09 (13) "wholesaler" means a person licensed or required to be licensed 10 under AS 43.50.010 or AS 43.50.035 and who sells cigarettes to a retailer for the 11 purpose of resale. 12 * Sec. 20. AS 43.50.080 is repealed. 13 * Sec. 21. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 TRANSITION: REGULATIONS. Notwithstanding sec. 24 of this Act, the 16 Department of Revenue may immediately proceed to adopt regulations necessary to 17 implement the changes made by this Act. The regulations take effect under AS 44.62 18 (Administrative Procedure Act), but not before the effective date of the respective statutory 19 changes. 20 * Sec. 22. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 TRANSITION: ACTIVITIES INVOLVING UNSTAMPED CIGARETTES 23 THROUGH MARCH 31, 2004. (a) Notwithstanding the requirements of AS 43.50.500 - 24 43.50.700, enacted by sec. 19 of this Act, a person may acquire, hold, own, import, possess, 25 sell, distribute, or consume unstamped cigarettes in this state on or after January 1, 2004, and 26 on or before March 31, 2004, if the cigarettes were in this state before January 1, 2004. 27 (b) In this section, "unstamped cigarettes" has the meaning given in AS 43.50.700, 28 enacted by sec. 19 of this Act. 29 * Sec. 23. Section 21 of this Act takes effect immediately under AS 01.10.070(c). 30 * Sec. 24. Except as provided in sec. 23 of this Act, this Act takes effect January 1, 2004.