                                 CODE OF VIRGINIA

HOW PAID; AFFIXING OF STAMPS; RECORDS OF STAMPING AGENTS; CIVIL PENALTIES (§
58.1-1003)

A. Except as otherwise specifically provided pursuant to &#xA7; 58.1-1003.2, the
taxes imposed by this chapter shall be paid by affixing stamps equaling the
amount of the tax in the manner set forth. The stamps shall be affixed to each
individual package, bag, box or can in such a manner that their removal will
require continued application of water or steam. Every stamping agent in the
Commonwealth shall affix to any unstamped cigarettes the requisite denominations
and amount of stamp or stamps that represent the proper tax levied by this
chapter prior to shipping to other wholesale dealers or retail outlets.

B. Every wholesale dealer shall at the time of shipping or delivering any
cigarettes make and retain a true duplicate invoice of the same which shall show
full and complete details of the sale or delivery of the taxable article. All
stamping agents shall also keep a record of purchases of all cigarettes, and
retain all books, records, and memoranda pertaining to the purchase and sale of
such cigarettes for a period of five years, and such records shall be subject to
examination by the Department upon request.

C. Every stamping agent shall be required to file a report between the first and
twentieth of each month, covering all revenue stamps the stamping agent affixed
to cigarettes during the preceding month. The report shall (i) list all brands
of cigarettes to which the Virginia revenue stamp was affixed and the quantity,
measured in packs, of all such brands to which the Virginia revenue stamp was
affixed; (ii) list the name and address of both the manufacturer of the
cigarettes and the entity from which the cigarettes were obtained; and (iii)
include the required documentation for and detail the amount and source of any
bad debt deductions being taken pursuant to &#xA7; 58.1-1003.1. The Department
may allow such reports to be filed electronically.

D. 1. For the purpose of compensating stamping agents for accounting for the tax
imposed under this article on roll-your-own tobacco, such stamping agents shall
be allowed when filing a monthly return and paying the tax to deduct 2 percent
of the tax otherwise due if the amount due was not delinquent at the time of
payment.

   2. The Tax Commissioner shall prepare for each fiscal year an estimate of the
   total amount of all discounts allowed to stamping agents pursuant to this
   subsection and such amount shall be taken into consideration in preparing the
   official estimate of the total revenues to be collected during the fiscal year
   by the Virginia Health Care Fund established under &#xA7; 32.1-366. Any
   reduction in funding available for programs financed by the Virginia Health
   Care Fund as a result of such discounts shall be made up by the general fund.

E. Any stamping agent who fails or refuses to comply with any of the above
provisions shall have such agent&#8217;s permit to affix revenue stamps revoked
by the Commissioner. Additionally, a stamping agent may be subject to a civil
penalty of $500 for each day after the due date that an agent fails or refuses
to file a report required under subsection C. The penalty shall be assessed and
collected by the Department as other taxes are collected.

HISTORY: Code 1950, §§ 58-757.1, 58-757.2; 1960, c. 392, §§ 1, 2; 1962, c.
473; 1980, c. 633; 1984, c. 675; 2004, c. 1029; 2005, c. 28; 2006, cc. 64, 229,
768; 2010, c. 701; 2013, c. 381.