Current through Register Vol. 43, No. 02, November 27, 2024
(1) The tobacco
Escrow Provisions and Tobacco Master Settlement Agreement Complementary
Legislation are codified in Title 6, Chapters 12 and 12A. These provisions
obligate tobacco manufacturers and distributors to adhere to certain
requirements.
(2) In addition to
information currently reported, each qualified wholesaler; distributor;
retailer; manufacturer; delivery seller (as defined by the PACT Act which
amended the Jenkins Act) who sales any cigarettes or smokeless tobacco to a
consumer in Alabama if the consumer submits the order via telephone or other
method of voice transmission, mail orders, Internet, or other online service
where the seller is not in the buyer's physical presence; or any other person;
firm; corporation; club or association selling, receiving, distributing,
storing or using tobacco products in the State of Alabama shall report the
excise tax on cigarettes and roll-your-own tobacco.
(3) The wholesaler, distributor, retailer,
manufacturer, delivery seller, etc. shall report the information to the Alabama
Department of Revenue, on forms prescribed by the Department, no later than the
twentieth day of each calendar month for the preceding calendar month's
activity. The following information must be reported:
(a) The month of activity.
(b) The name of the nonparticipating
manufacturer from whom the Alabama taxed cigarettes or roll-your-own tobacco
originated.
(c) The brand
code.
(d) The brand name.
(e) The number of Alabama taxed cigarettes
and roll-your-own tobacco units sold. (Units Sold is the number of individual
cigarettes sold in the state by the applicable tobacco product manufacturer
(whether directly or through a distributor, retailer, or similar intermediary
or intermediaries) during the year in question, as measured by excise taxes
collected by the state on packs (or roll-your-own tobacco containers) bearing
the excise tax stamp of the state.)
1. For the
purpose of roll-your-own tobacco, this product is taxed under the heading of
"smoking tobacco" in Alabama tobacco tax statutes Title 40, Chapter 25, Section
2(a)(9), and the excise tax is paid by monthly report. The term "cigarette"
includes roll-your-own tobacco. Roll-your-own is any tobacco which, because of
its appearance, type, packaging, or labeling is suitable for use and likely to
be offered to, or purchased by, consumers as tobacco for making cigarettes.
Roll-your-own tobacco in the amount of 0.09 ounces shall constitute one
individual cigarette.
(f) The conversion of roll-your-own tobacco
ounces to cigarettes. For the purpose of computing roll-your-own tobacco to
units sold, the tobacco must be converted to individual cigarettes by dividing
total ounces of roll-your-own tobacco by 0.09.
(4) A manufacturing company whose cigarettes
and/or roll-your-own tobacco is distributed into Alabama and that manufacturing
company elects not to participate in the Master Settlement Agreement is
required to do the following:
(a) Establish
an escrow fund in a federally or state chartered financial institution by April
15, 2000. The manufacturer may choose the institution; however, the following
conditions must be met:
1. The institution
must not be affiliated with any tobacco product manufacturer.
2. The institution must have assets of at
least one billion dollars.
3. The
escrow arrangement must require that the financial institution hold the
escrowed funds' principal for the benefit of releasing parties and prohibits
the tobacco product manufacturer placing the funds into escrow from using,
accessing, or directing the use of the funds' principal inconsistent with Act
99-395, Section 3(2).
4. The
tobacco products manufacturer may receive the interest or other appreciation on
the escrow fund.
(b)
Certify to the Commissioner of the Department of Revenue, no later than April
30, 2000 or April 30 following the year of activity that an escrow fund was
established and provide the Commissioner with a copy of the escrow agreement
signed by the tobacco product manufacturer and financial institution.
(c) Place into a qualified escrow fund by
April 15 of the year or by the last day of the month following the end of the
quarter if required to make quarterly deposits, following the below year, the
following amounts:
1. 1999: $.0094241 per
unit sold June 9, 1999 through December 31, 1999;
2. 2000: $.0104712 per unit sold;
3. 2001 and 2002: $.0136125 per unit
sold;
4. 2003 through 2006:
$.0167539 per unit sold;
5. 2007
and each year thereafter: $.0188482 per unit sold.
(d) Certify to the Commissioner of the
Department of Revenue by April 30 of each year or no later than ten (10) days
after each quarterly deposit date if required to make quarterly certifications,
stating the number of units sold in Alabama and the amount deposited into the
escrow fund. Verification of the deposit must be evidenced by a statement from
the financial institution.
Author: Loretta Nelson
Statutory Authority:
Code of Ala
1975, §§
40-2A-7(a)(5),
6-12-2(10),
6-12A-5(d),
6-12A-7(d).
