CHAPTER 4

CIGARETTE TAX

  Section 1. Authority. These rules are adopted pursuant to W.S. 39-6-101 and 39-6-104. The Department of Revenue has the authority to prescribe rules for cigarette tax pursuant to W.S. 39-1-303.

  Section 2. Purpose of the Rules. The express purpose of this chapter of the rules are as follows:

  (a) To provide for the administrative requirements regarding the issuance of a new cigarette tax license upon the sale, transfer, or change in location of a cigarette wholesaler’s business;

  (b) To provide rules applicable to the bonding of wholesalers’ sales of stamps and the banks acting as agents of the Department of Revenue pursuant to W.S. 39-6-101 and 39-6-104, when the cigarette wholesaler uses metering devices upon the filing of an appropriate bond, or uses cigarette stamps in lieu of metering devices upon payment of cash for such stamps;

  (c) To provide rules setting forth the tax liability of Indians, Indian Tribes, and persons conducting business with Indians on or within Indian Reservations, and to codify the mandates set forth in Stagner v. Wyoming State Tax Commission 642 P.2d 1296 (1984).

  Section 3. Transfer of License. The Wyoming cigarette wholesaler’s license is transferable between locations by the Licensee provided that consent of the Department of Revenue is obtained prior to any transfer. A change in ownership will require the issuance of a new license.

  Section 4. Cigarette Tax Meters, Bonding, Cigarette Stamps.

  (a) Metering devices.

    (i) Each meter will be initially set by the Department of Revenue.

    (ii) Each meter user will forward a letter from the bank of his choice agreeing to act as setting agent.

    (iii) Each meter will be read by the setting agent at least once per month, or by a representative of the Department of Revenue in the absence of a reading by the setting agent.

  (b) Bond.

    (i) A cash or surety bond equal to the face value of the maximum purchase of stamps is required of the wholesaler purchasing cigarette stamps with payment other than cash.

    (ii) A cash or surety bond is required of each wholesaler authorized to use the cigarette tax meter equal to twice the value of the maximum meter setting purchased unless the meter settings are purchased with cash.

  (c) The Department of Revenue will deposit rolled heat fusion cigarette tax stamps in banks within the State of Wyoming for disbursement to licensed Wyoming cigarette wholesalers whose stamping of cigarettes with Wyoming cigarette tax indicia utilizes Meyercord Equipment.

    (i) The Wyoming cigarette wholesaler must prearrange with his bank to receive and disburse rolled Wyoming cigarette tax stamps.

    (ii) The Wyoming cigarette wholesaler must make a written request to the Department of Revenue to allow his selected bank to receive and disburse Wyoming cigarette tax stamps. Such request must be accompanied by:

      (A) Letter of agreement from the bank to perform such services and to comply with requirements and instructions of the Department of Revenue relating to receipt, deposit and disbursement of cigarette stamps.

      (B) Bank designation of two officer level employees to administer the stamp disbursement program.

      (C) Copy of signature card bearing those person’s signatures authorized by the cigarette wholesaler to make remittances and receive cigarette stamps.

    (iii) Related expenses incurred will be borne by the cigarette wholesaler or bank.

    (iv) The Department of Revenue shall receive and review all requests submitted by resident Wyoming cigarette wholesalers and shall, at the Department of Revenue’s discretion, approve only one bank in each municipality. Upon approval of a selected bank, the Department of Revenue shall transport cigarette tax stamps to the selected bank in such quantity that will not exhaust within a two-month period. A receipt for the cigarette tax stamps shall be taken at the time of delivery. Receipts for stamp disbursement will be furnished by the Department of Revenue.

    (v) Cigarette tax stamps shall be disbursed in multiples of one roll (30,000 stamps). Remittances shall be made payable to the Department of Revenue and certified funds shall be mailed to the Department daily for deposit with the State Treasurer with a copy of the disbursement receipt.

    (vi) Disbursement of rolled cigarette stamps shall be made in consecutive order.

    (vii) All cigarette tax stamp disbursement forms must bear the name of the bank and the authorized employee making such disbursements of and accepting remittances for cigarette tax stamps. The order form shall also bear the number of the roll of cigarette tax stamps, the financial details of the transaction, and the signature of the person authorized by the wholesaler to purchase and receive cigarette stamps.

    (viii) Approved banks shall at all times maintain a perpetual inventory register of all cigarette tax stamps. Banks shall also maintain a current ledger of all cigarette tax stamp receipts, date of receipts, all disbursements, date of disbursements, to whom disbursed, amounts of revenue collected and all other information relative to the safeguarding of the cigarette tax stamps and revenue collected therefrom.

    (ix) The Department of Revenue shall have the authority to examine and/or audit records, etc., pertaining to the cigarette tax stamps at any time during banking hours.

    (x) Approved banks shall be held responsible for the safeguard of all cigarette tax stamps and revenue held by same, as if the stamps and revenue were its own personal property. The approved bank shall be held accountable for any discrepancy between the inventory and sale of stamps by the bank.

    (xi) The bank must request, in writing, an additional supply of cigarette tax stamps at such time as its present supply has diminished to not more than six rolls (180,000) of cigarette tax stamps.

  Section 5. Taxable Sales of Cigarettes on Indian Reservations.

  (a) Definitions.

    (i) The term “Indian Reservation” as used herein shall include all lands, notwithstanding the issuance of any patent within the exterior boundaries of the Wind River Reservation and meeting at least one of the following criteria:

      (A) The land is owned by the United States in trust for the Shoshone and Arapaho Tribes;

      (B) The land is owned by one or both of the Shoshone and Arapaho Tribes;

      (C) The land is owned in full by enrolled members of the Shoshone or Arapaho Tribes; provided, however, that lands within the Riverton Reclamation withdrawal and the City of Riverton are not included within the term.

    (ii) The term “Indian Tribe” as used herein shall mean only the Shoshone Tribe and the Northern Arapaho Tribe of the Wind River Indian Reservation.

    (iii) The term “Indian” as used herein shall mean any enrolled member of the Shoshone Tribe or the Northern Arapaho Tribe of the Wind River Indian Reservation.

    (iv) “Department” means the Department of Revenue or its authorized agent.

    (v) “Indian or Tribal Vendor” means an Indian or Indian Tribe as defined herein, engaged in selling cigarettes.

    (vi) “United States” means the government of the United States and all its departments and agencies.

  (b) Sales of cigarettes made on the Wind River Indian Reservation to non-Indians by Indians, Indian Tribes or non-Indians are subject to the cigarette tax, since the tax is levied upon the non-Indian purchaser. The wholesaler, as defined in W.S. 39-6-101, is obligated to make pre-collection of the tax. All Indian, tribal vendors or non-Indian wholesalers shall keep complete and accurate records in this state of all cigarettes purchased and sold for three years. Such records will consist of purchase invoices, freight bills, sales invoices and record of cigarette stamp purchases. All records will be available for inspection by the Department at any reasonable time.

  (c) The non-Indian making or intending to make sales to non-Indian customers must purchase stock of cigarettes with the Wyoming Tax indicia affixed from a Wyoming wholesaler.

  (d) The Indian or Tribal Vendor may purchase cigarettes without the Wyoming Tax indicia and remit the taxes due on sales to non-Indian customers in the following manner:

    (i) Report total sales of cigarettes for month, less the exempt sales as defined by these rules, equals total cigarettes subject to the tax at the rate of $.004 per cigarette. Reports, returns, exempt logs, etc., must be filed with payment of the tax to the Department of Revenue by the last day of the month following the month of sale. A statement of exemption must be taken from the purchaser by the seller to establish that a sale is exempt from the cigarette tax. The statement must be retained by the seller as part of the records he makes, keeps and preserves as required. The seller must maintain an approved log in which each exempt sale of cigarettes is documented by the signature of the exempt Indian purchaser. Log forms shall be printed and distributed by the Department of Revenue and shall be used to document the name and enrollment number of each enrolled Shoshone or Arapaho tribal member purchasing cigarettes, together with the quantity and date of each purchase. The forms shall be forwarded along with tax due on the previous months taxable sales to the Department of Revenue each month; or

    (ii) The Department of Revenue may enter into an agreement annually with the tribal vendor which allows the tax to be paid on a percentage basis. The Indian vendor shall provide the Department with information which justifies a proposed percentage and upon acceptance by the Department said percentage shall represent a rebuttable presumption as to the volume of sales to non-Indians and non- exempt Indians. The tax shall be remitted to the Department pursuant to the terms and conditions of the agreement.

  (e) Sales of cigarettes to Indians outside of the Wind River Indian Reservation are subject to the tax and indicia of payment of tax must be affixed to each package sold.

  (f) Sales of cigarettes made on the Wind River Indian Reservation by an Indian, Indian Tribes or non-Indians to Indian customers are exempt from Wyoming cigarette tax.

  (g) Indian or Indian tribal vendors who are holding a valid Trader’s License issued by the United States Department of the Interior, Bureau of Indian Affairs, may purchase unstamped cigarettes from Wyoming cigarette wholesalers for sale pursuant to these rules. Failure of a vendor to comply with these rules will result in treatment of all unstamped cigarettes consigned or shipped to the vendor as contraband and subject to seizure as provided by Wyoming law. Each Indian or Indian Tribal vendor selling within the Indian reservation shall be considered for all purposes related to this section to be a wholesaler, and, upon compliance with these rules, shall be issued one or more licenses without fee. Licensed non-Indian wholesalers doing business within the Indian Reservation may also purchase unstamped cigarettes for sale to Indians upon compliance with these rules.