                                 CODE OF VIRGINIA

SALE OF UNSTAMPED CIGARETTES BY WHOLESALE DEALERS; PENALTY (§ 58.1-1010)

A. A wholesale dealer who is duly qualified as a wholesale dealer stamping agent
under &#xA7; 58.1-1011 may sell cigarettes without the Virginia revenue stamps
affixed thereto, provided such cigarettes are sold and shipped or delivered in
interstate commerce to a person outside this Commonwealth. Such wholesale dealer
shall have on file a record of such sale, the original purchase order, a copy of
the invoice therefor, and a receipt from a common carrier, contract carrier, or
post office showing shipment for delivery in such other state, or, if delivered
by such wholesale dealer to the purchaser at a point outside of this
Commonwealth, a receipt showing such delivery in addition to the record,
original purchase order and copy of the invoice relating to such sale.

B. Such duly qualified wholesale dealer may sell cigarettes without the Virginia
revenue stamps affixed thereto, provided:

   1. Such cigarettes are sold to a person who is engaged in business as a dealer
   in cigarettes in another state;

   2. Such cigarettes are purchased exclusively for resale in the other state;
   and

   3. Such cigarettes are at the time of sale properly stamped by the Virginia
   wholesale dealer with revenue stamps authorized and issued by the other state
   for use upon such cigarettes. A wholesale dealer shall have on file a record
   of each such sale, the original purchase order, a copy of the invoice
   therefor, a receipt from the purchaser showing that such purchase was made
   exclusively for resale in the other state, and a record showing the purchase
   and use of such revenue stamps of the other state, and shall set forth in his
   or its monthly report to the Department the quantity of cigarettes, measured
   in packs, so set aside for sale outside of the Commonwealth. If upon
   examination of invoices of any wholesale dealer, such dealer is unable to
   furnish evidence to the Department of sufficient stamp purchases from such
   other state to cover unstamped cigarettes set aside for sale in such other
   state, the prima facie presumption shall arise that such cigarettes were sold
   without the proper stamps affixed thereto in violation of &#xA7; 58.1-1003.

C. Cigarettes may be sold by duly qualified wholesale dealers, without revenue
stamps affixed thereto, when sold to the United States or to any instrumentality
thereof for resale to or for the use or consumption by members of the armed
services of the United States, or when sold to the Veterans Canteen Service of
the U.S. Department of Veterans Affairs for resale to veterans of the armed
services of the United States who are hospitalized or domiciled in hospitals and
homes of the U.S. Department of Veterans Affairs, provided the books and
records, including original purchase orders and copies of invoices showing such
sales, are kept on file and shall set forth in his or its monthly report to the
Department the quantity of cigarettes, measured in packs, so sold.

D. Cigarettes may be sold by duly qualified wholesale dealers, without revenue
stamps affixed thereto, when sold and delivered to ships regularly engaged in
foreign commerce or coastwise shipping between points in this Commonwealth and
points outside of this Commonwealth for resale to or for use or consumption upon
such ship or in foreign commerce.

E. The Department is authorized to adopt rules and regulations with respect to
the enforcement of the provisions of this section to prevent any evasion of the
tax herein imposed.
			A failure to comply with any provision of this section with respect to any
sale of unstamped cigarettes shall subject the wholesale dealer to the payment
of the tax thereon imposed by this chapter. The Department may impose a penalty,
to be assessed and collected by the Department as other taxes are collected, of
up to $500 per pack of cigarettes on any stamping agent it finds not in
compliance with any provision of this section with respect to the sale of
unstamped cigarettes. The Department may also suspend the stamping permit of
such stamping agent until the tax and penalties have been paid to the
Department. Any person who violates any of the provisions of this section shall
be guilty of a Class 2 misdemeanor.

HISTORY: Code 1950, § 58-757.9; 1960, c. 392, § 9; 1962, c. 473; 1984, c. 675;
2004, c. 1029; 2005, c. 28.