                                 CODE OF VIRGINIA

PREPARATION, DESIGN, AND SALE OF STAMPS; UNLAWFUL SALE OR PURCHASE OF STAMPS A
FELONY; PENALTY (§ 58.1-1009)

A. The Department is hereby authorized and directed to have prepared and to sell
stamps suitable for denoting the tax on all cigarettes. The Department shall
design, adopt and promulgate the form and kind of stamps to be used and may
allow for electronic purchase and payment when selling such stamps. Stamps so
adopted and promulgated shall be known as and termed &#8220;Virginia revenue
stamps,&#8221; and in any information or indictment, it shall be sufficient to
describe the stamps as &#8220;Virginia revenue stamps.&#8221;
			Any person other than the Department who sells such revenue stamps, not
affixed to cigarettes sold and delivered by them, whether the said stamps be
genuine or counterfeit, shall be guilty of a Class 6 felony. Any person who
purchases revenue stamps from anyone other than the Department, unless such
stamps are already affixed to cigarettes being purchased by and delivered to
him, or who uses or affixes, or causes to be used or affixed, any revenue stamps
not purchased from the Department by the owner of the cigarettes being handled
or stamped, whether such stamps are genuine or counterfeit, shall be guilty of a
Class 6 felony. When stamping agents have qualified as such with the Department,
as provided in &#xA7; 58.1-1011, and purchase stamps as prescribed herein for
use on taxable cigarettes sold and delivered by them, the Department shall allow
to each stamping agent on such sales of revenue stamps a discount equal to two
percent of the total charged to the stamping agent by the Department for the
purchase of the revenue stamps. 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.
			All stamps prescribed by the Department shall be designed and furnished in
such a fashion as to permit identification of the wholesale dealer or retail
dealer that affixed the stamp to the particular package of cigarettes, by means
of a serial number or other mark on the stamp. The Department shall maintain for
not less than three years information identifying which wholesale dealer or
retail dealer affixed the revenue stamp to each package of cigarettes.

B. 1. The Department shall provide Virginia revenue stamps to certain wholesale
dealers holding a current permit issued pursuant to § 58.1-1011 prior to
collecting the tax imposed under this chapter from such wholesale dealer. Such
wholesale dealers shall be allowed to obtain the stamps from the Department
without concurrent payment of the tax only if the conditions of this subsection
are satisfied.
			In order to obtain Virginia revenue stamps without concurrent payment of the
tax imposed under this chapter, a wholesale dealer shall (i) file a bond with a
corporate surety licensed to do business in Virginia, or (ii) file an
irrevocable letter of credit satisfactory to the Tax Commissioner as to the bank
or savings institution, the form and substance, and payable to the Commonwealth
in a face amount determined by the Tax Commissioner to be satisfactory to cover
possible losses resulting from the failure to remit taxes due but not exceeding
two times the anticipated average monthly amount in purchases of Virginia
revenue stamps by the wholesale dealer as determined by the Commissioner. The
letter of credit shall be from a bank incorporated or authorized to conduct
banking business under the laws of the Commonwealth or authorized to do business
in the Commonwealth under the banking laws of the United States, or a federally
insured savings institution located in the Commonwealth. Such bond or
irrevocable letter of credit shall be conditioned upon payment of the tax
imposed by this chapter relating to Virginia revenue stamps obtained by the
wholesale dealer from the Department (without concurrent payment of the tax) for
which such tax, net of any applicable discount described in subsection A, shall
be paid within the 30 days immediately following the date that the related
revenue stamp or stamps were provided by the Department to such wholesale
dealer. Any such bond shall be so written that, on timely payment of the premium
thereon, it shall continue in force from year to year unless sooner terminated.

   2. Any surety on a bond filed by any wholesale dealer shall be released and
   discharged from any and all liability to the Commonwealth accruing on such
   bond after the expiration of 60 days from the date upon which such surety
   shall have lodged with the Commissioner written request to be released and
   discharged. But such request shall not operate to relieve, release or
   discharge such surety from any liability already accrued or which shall accrue
   before the expiration of such 60-day period. The Commissioner shall, promptly
   on receipt of such notice, notify the wholesale dealer who furnished such
   bond. Unless such dealer on or before the expiration of such 60 days&#8217;
   notice files with the Commissioner a new bond or letter of credit that meets
   all the conditions described in subdivision 1, the Commissioner shall
   forthwith require the wholesale dealer to pay the tax imposed under this
   chapter concurrent with obtaining revenue stamps from the Department.
   				In the event that liability upon the bond or letter of credit filed by the
   wholesale dealer with the Commissioner shall be discharged or reduced, whether
   by judgment rendered, payment made or otherwise, or if in the opinion of the
   Commissioner any surety on the bond becomes unsatisfactory or unacceptable,
   then the Commissioner may require the filing of a new bond or letter of
   credit. Unless such new bond or letter of credit meets all the conditions
   described in subdivision 1, the Commissioner shall forthwith require the
   wholesale dealer to pay the tax imposed under this chapter concurrent with
   obtaining revenue stamps from the Department.

   3. Notwithstanding any other provision in this subsection, the Tax
   Commissioner, for good cause, shall require a wholesale dealer to pay the tax
   imposed under this chapter concurrent with obtaining revenue stamps from the
   Department, regardless of whether or not such dealer has filed or agreed to
   file the bond or letter of credit described in this subsection.

C. In addition to any other penalties provided by law, the Department may revoke
the permit issued, in accordance with &#xA7; 58.1-1011, to any person who
violates any provision of this section.

HISTORY: Code 1950, §§ 58-757.8, 58-757.10; 1960, c. 392, §§ 8, 10; 1973, c.
3; 1984, c. 675; 2000, cc. 880, 901; 2002, cc. 683, 722, 821; 2004, c. 1029;
2004, Sp. Sess. I, c. 3; 2005, c. 925; 2013, cc. 311, 381, 389.