Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-04 - Miscellaneous Tax Division
Chapter 1320-04-03 - Unfair Cigarette Sales Law and Tobacco Tax Rules
Section 1320-04-03-.03 - UNSTAMPED TOBACCO PRODUCTS

(1) The term "unstamped tobacco products" shall be defined to mean any package of cigarettes subject to the tax imposed under the provision of the Tennessee Tobacco Tax Law which does not bear an official Tennessee cigarette tax stamp that is completely legible and identifiable as a valid tax stamp. Such term shall also include cigarettes bearing tax stamps of another state, as well as cigars and other tobacco products subject to tax on which applicable tax has not been paid.

(2) Before a license may legally stock any unstamped cigarettes, he shall make application to the Commissioner for permission to stock, warehouse, distribute, sell and/or dispose of such products. Such application shall be by certified statement setting forth his ordinary requirements as defined herein. The quantity approved by the Commissioner hereunder shall be shown on the license issued or in a supplemental letter if a larger quantity is allowed under provisions contained herein.

(3) Stocks of unstamped cigarettes which include those bearing cigarette tax stamps of other states shall be stacked separate and apart from Tennessee stamped stock. The act of persons intermingling unstamped products with stamped products shall be grounds for revocation of license and agency appointment upon proper show cause order.

(4) Licensees who have qualified with the Commissioner will be permitted to stock unstamped cigarettes for exclusive export purposes and for sale to authorized armed forces installation, government hospitals or to qualified retailers domiciled in another state in such quantity to cover the licensees' "ordinary requirements" for such purposes.

(5) The term "ordinary requirements" shall mean a specified number of cigarettes which shall not exceed one-twelfth (1/12) of the total quantity of such unstamped products sold during the preceding calendar year. Should a licensee's requirements later exceed the maximum quantity allowance as established under the provisions herein, the Commissioner may at his discretion grant a larger quantity upon written supplemental application.

(6) In no instance shall a licensee have in his possession for a period greater than 72 hours unstamped cigarettes greater than the quantity established and approved hereunder. Quantities of such unstamped stock in excess of the maximum allowable quantity shall be grounds for revocation of license upon proper show cause hearing. The tax applicable to sales of unstamped cigarettes in excess of the maximum stock allowance shall be assessed against the seller.