The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 205: Cigarettes and Tobacco Products

• Subchapter 001: General Provisions

• § 7701. Administration of chapter

  The administration of this chapter is vested in the Commissioner. All forms necessary and proper for the enforcement of this chapter shall be prescribed and furnished by the Commissioner. The Commissioner shall appoint such agents, clerks, stenographers, and other assistants as he or she may deem necessary for effecting the purposes of this chapter, but their salaries shall be fixed by the Commissioner with the approval of the Governor. The Commissioner may require any such agent, clerk, stenographer, or other assistant to execute a bond in such sum as such Commissioner shall determine for the faithful discharge of his or her duties. Any such agent, clerk, stenographer, or other assistant may be removed by the Commissioner. The Commissioner may prescribe regulations and rulings not inconsistent with law to carry into effect the provisions of this chapter, which regulations and rulings, when reasonably designed to carry out the intent and purpose of this chapter, shall be prima facie evidence of its proper interpretation. The Commissioner, from time to time, may publish for distribution such regulations prescribed by him or her and such rulings as he or she shall deem to be of general interest.

• § 7702. Definitions

  As used in this chapter unless the context otherwise requires:

  (1) “Cigarette” means:

  (A) any roll of tobacco wrapped in paper or any substance not containing tobacco; and

  (B) any roll of tobacco wrapped in substance containing tobacco that, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subdivision (A) of this subdivision (1).

  (2) “Commissioner” shall mean the Commissioner of Taxes.

  (3) “Dealer” means any wholesale dealer and retail dealer as herein defined.

  (4) [Repealed.]

  (5) “Licensed wholesale dealer” shall mean a wholesale dealer licensed under the provisions of this chapter.

  (6) “Little cigars” means any rolls of tobacco wrapped in leaf tobacco or any substance containing tobacco, other than any roll of tobacco that is a cigarette within the meaning of subdivision (1) of this section, and as to which 1,000 units weigh not more than four and one-half pounds.

  (7) “Manufacturer” means a person who manufactures and sells cigarettes, little cigars, roll-your-own tobacco, snuff, new smokeless tobacco, and other tobacco products.

  (8) “Person” shall mean any individual, firm, fiduciary, partnership, corporation, trust, or association, however formed.

  (9) “Place of business” means any place where tobacco products are sold or where tobacco products are manufactured, stored, or kept for the purpose of sale or consumption, including any vessel, vehicle, airplane, train, or vending machine.

  (10) “Retail dealer” shall mean a person licensed pursuant to 7 V.S.A. § 1002.

  (11) “Roll-your-own tobacco” means any tobacco that, 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.

  (12) “Sale” or “sell” means any transfer, exchange, or barter in any manner or by any means whatever, of any cigarettes or tobacco products.

  (13) “Snuff” means any finely cut, ground, or powdered tobacco that is not intended to be smoked, has a moisture content of not less than 45 percent, and is not offered in individual single-dose tablets or other discrete single-use units.

  (14) “Stamp” shall mean any impression, stamp, label, or print manufactured, printed, or made as prescribed by the Commissioner.

  (15) “Other tobacco products” means any product manufactured from, derived from, or containing tobacco that is intended for human consumption by smoking, chewing, or in any other manner, including products sold as a tobacco substitute, as defined in 7 V.S.A. § 1001(8), and including any liquids, whether nicotine based or not, or delivery devices sold separately for use with a tobacco substitute, but shall not include cigarettes, little cigars, roll-your-own tobacco, snuff, new smokeless tobacco as defined in this section, or cannabis products as defined in 7 V.S.A. § 831.

  (16) “Wholesale dealer” means a person who imports or causes to be imported into the State any cigarettes, little cigars, roll-your-own tobacco, snuff, new smokeless tobacco, or other tobacco product for sale or who sells or furnishes any of these products to other wholesale dealers or retail dealers for the purpose of resale, but not by small quantity or parcel to consumers thereof.

  (17) “Wholesale dealer’s license” shall mean the license granted under the provisions of this chapter to a wholesale dealer for a wholesale outlet.

  (18) “Wholesale outlet” shall mean any premises where cigarettes, little cigars, roll-your-own tobacco, snuff, new smokeless tobacco, or other tobacco products are sold, transferred, displayed, or held for sale by a wholesale dealer.

  (19) “Wholesale price” means the price at which a licensed wholesale dealer sells or furnishes cigarettes, little cigars, roll-your-own tobacco, snuff, new smokeless tobacco, or other tobacco products to any retail dealer.

  (20) “New smokeless tobacco” means any tobacco product manufactured from, derived from, or containing tobacco that is not intended to be smoked, has a moisture content of less than 45 percent, or is offered in individual single-dose tablets or other discrete single-use units.

  (21) “Cigar” means any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco, other than any roll of tobacco that is a cigarette within the meaning of subdivision (1) of this section or is a little cigar within the meaning of subdivision (6) of this section. (Amended 1959, No. 231, § 2; 1967, No. 346 (Adj. Sess.), § 4; 1981, No. 31, § 1; 1995, No. 29, § 13, eff. April 14, 1995; 2005, No. 191 (Adj. Sess.), § 36; 2009, No. 1 (Sp. Sess.), § H.36; 2009, No. 160 (Adj. Sess.), § 34; 2011, No. 143 (Adj. Sess.), § 13a, eff. May 15, 2012; 2011, No. 166 (Adj. Sess.), § 8, eff. May 16, 2012; 2013, No. 14, § 8; 2019, No. 28, § 1; 2021, No. 105 (Adj. Sess.), § 564, eff. July 1, 2022; 2023, No. 6, § 386, eff. July 1, 2023; 2023, No. 65, § 23, eff. June 14, 2023.)

• Subchapter 002: Licenses

• § 7731. License required

  Each wholesale dealer shall secure a license from the Commissioner of Taxes before engaging in the business of selling cigarettes, roll-your-own tobacco, little cigars, snuff, new smokeless tobacco, or other tobacco products in this State. Licensed wholesale dealers shall sell these products only to other Vermont licensed wholesale dealers or to retailers licensed pursuant to 7 V.S.A. § 1002. (Amended 1959, No. 231, § 3; 1981, No. 31, § 2; 2013, No. 14, § 9.)

• § 7732. Application for and issuance of license

  (a) A separate application and license shall be required for each wholesale outlet when a wholesale dealer shall own or control more than one such outlet.

  (b) Such license shall be issued by the Commissioner on application without charge, on forms prescribed by him or her, stating the name and address of the applicant, the address of the place of business at which it is proposed to engage in such business, the type of business, and such other information as the Commissioner may require for the proper administration of this chapter. Each license so issued shall be prominently displayed on the premises covered by the license. (Amended 1981, No. 31, § 3; 2013, No. 14, § 10.)

• § 7733. Repealed. 1981, No. 31, § 18.

• § 7734. Penalties for sales without license

  Any licensed wholesale dealer who shall sell, offer for sale, or possess with intent to sell any cigarettes, roll-your-own tobacco, little cigars, snuff, new smokeless tobacco, or other tobacco products, or any combination thereof, without having first obtained a license as provided in this subchapter shall be fined not more than $25.00 for the first offense and not more than $200.00 nor less than $25.00 for each subsequent offense. (Amended 1959, No. 231, § 4; 1981, No. 31, § 4; 2013, No. 14, § 11; 2015, No. 57, § 73, eff. June 11, 2015.)

• § 7735. Term of licenses

  Each license issued under the provisions of this subchapter shall be valid as long as the licensee continues to do business at the place named unless revoked or suspended by the Commissioner as provided in section 7736 of this title. If the business with respect to which such license was issued shall be sold or transferred or if the licensee ceases to do business at the place named, the license shall immediately be returned to the Commissioner for cancellation. (Amended 1971, No. 73, § 26, eff. April 16, 1971; 1981, No. 31, § 5.)

• § 7736. Revocation and suspension of licenses

  The Commissioner may revoke or suspend the license of any licensed wholesale dealer for failure to comply with any provision of this chapter, for failure to comply with the provisions of 11 V.S.A. chapter 15, or for failure to comply with the provisions of 33 V.S.A. chapter 19, subchapter 1B. Any person aggrieved by such revocation or suspension may apply to the Commissioner for a hearing as provided in section 7782 of this title and may further appeal to the courts as provided in section 7783 of this title. (Amended 1971, No. 73, § 27, eff. April 16, 1971; 1981, No. 31, § 6; 2003, No. 14, § 3; 2013, No. 14, § 12.)

• § 7737. Bonding

  When the Commissioner, in his or her discretion, deems it necessary to protect the revenues to be obtained under this chapter, he or she may require any licensed wholesale dealer to file with him or her a bond, issued by a surety company authorized to transact business in this State, and approved by the Commissioner of Financial Regulation of this State as to its solvency and responsibility, in an amount fixed by the Commissioner, to secure the payment of any tax or penalties or interest due or that may become due from that licensed wholesale dealer under this chapter. In the event that the Commissioner determines that a licensed wholesale dealer is to file a bond, he or she shall give notice to him or her to that effect, specifying the amount of the bond required. The licensed wholesale dealer shall file the bond within 15 days after the giving of the notice unless within those 15 days he or she shall request in writing a hearing before the Commissioner at which the necessity, propriety, and amount of the bond shall be determined by the Commissioner. The determination shall be final and shall be complied with within 15 days after the giving of notice thereof. In lieu of a bond, securities approved by the Commissioner or cash in such amount as he or she may prescribe may be deposited, which shall be kept in the custody of the State Treasurer, who may, at any time, upon instruction from the Commissioner without notice to the depositor, apply them to any tax or interest or penalties due, and for that purpose the securities may be sold by him or her at public or private sale without notice to the depositor thereof. In determining whether a person should be required to obtain a bond, the Commissioner is specifically authorized to consider the filing and payment history, with respect to any tax administered by the Commissioner, of the person or any individual, corporation, partnership, or other legal entity with which the person is or was associated as principal, partner, officer, director, employee, agent, or incorporator. (Added 1981, No. 31, § 7; amended 1989, No. 225 (Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a); 2001, No. 140 (Adj. Sess.), § 40; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2013, No. 14, § 13.)

• Subchapter 003: Stamp Tax

• § 7771. Rate of tax

  (a) A tax is imposed on all cigarettes, little cigars, and roll-your-own tobacco held in this State by any person for sale, unless such products shall be:

  (1) in the possession of a licensed wholesale dealer;

  (2) in the course of transit and consigned to a licensed wholesale dealer or retail dealer; or

  (3) in the possession of a retail dealer who has held the products for 24 hours or less.

  (b) Payment of the tax on cigarettes under this section shall be evidenced by the affixing of stamps to the packages containing the cigarettes. Where practicable, the Commissioner may also require that stamps be affixed to packages containing little cigars or roll-your-own tobacco. Any cigarette, little cigar, or roll-your-own tobacco on which the tax imposed by this section has been paid, such payment being evidenced by the affixing of such stamp or such evidence as the Commissioner may require, shall not be subject to a further tax under this chapter. Nothing contained in this chapter shall be construed to impose a tax on any transaction the taxation of which by this State is prohibited by the constitution of the United States. The amount of taxes advanced and paid by a licensed wholesale dealer as herein provided shall be added to and collected as part of the retail sale price on the cigarettes, little cigars, or roll-your-own tobacco.

  (c) A tax is also imposed on all cigarettes, little cigars, and roll-your-own tobacco possessed in this State by any person for any purpose other than sale as follows:

  (1) This tax shall not apply to:

  (A) Products bearing a stamp affixed pursuant to this chapter.

  (B) Products bearing a tax stamp affixed pursuant to the laws of another jurisdiction with a tax rate equal to or greater than the rate set forth in this subsection (c).

  (C) Products purchased outside the State by an individual in quantities of 400 or fewer cigarettes, little cigars, and 0.0325 ounce units of roll-your-own tobacco, and brought into the State for that individual’s own use or consumption. Products that are ordered from a source outside the State and delivered into this State are not “purchased outside the State” within the meaning of this subsection (c).

  (2) There is allowed a credit against the tax under this subsection for cigarette, little cigars, or roll-your-own tobacco tax paid to another jurisdiction and evidenced by tax stamps affixed to the subject products pursuant to the laws of that jurisdiction.

  (3) A person taxable under this section shall, within 30 days of first possessing the products in this State, file a return with the Commissioner showing the quantity of products brought into the State. The return must be made in the form and manner prescribed by the Commissioner and be accompanied by remittance of the tax due.

  (d) The tax imposed under this section shall be at the rate of 154 mills per cigarette or little cigar and for each 0.0325 ounces of roll-your-own tobacco. The interest and penalty provisions of section 3202 of this title shall apply to liabilities under this section. (Amended 1959, No. 243, § 1; 1963, No. 226, § 1, eff. July 3, 1963; 1965, No. 41, § 1, eff. April 28, 1965; 1965, No. 131, § 1; 1969, No. 144, § 12, eff. June 1, 1969; 1981, No. 31, § 8; 1983, No. 2 (Sp. Sess.), § 3, eff. July 28, 1983; 1991, No. 32, § 23-25; 1995, No. 14, § 6, eff. April 12, 1995; 1995, No. 29, § 14, eff. April 14, 1995; 2001, No. 140 (Adj. Sess.), §§ 24, 26, eff. June 21, 2002; 2005, No. 191 (Adj. Sess.), § 37; 2005, No. 207 (Adj. Sess.), § 3, eff. May 31, 2006; 2009, No. 1 (Sp. Sess.), § H.37; 2009, No. 160 (Adj. Sess.), § 35; 2011, No. 45, § 27; 2013, No. 174 (Adj. Sess.), § 38; 2015, No. 54, § 49; 2015, No. 57, § 74, eff. June 11, 2015; 2021, No. 105 (Adj. Sess.), § 565, eff. July 1, 2022; 2023, No. 6, § 387, eff. July 1, 2023.)

• § 7772. Form and sale of stamps

  (a) The Commissioner shall secure stamps of such designs and denominations as he or she shall prescribe to be affixed to packages of cigarettes as evidence of the payment to the tax imposed by this chapter. The Commissioner shall sell such stamps to licensed wholesale dealers at a discount of two and three-tenths percent of their face value for payment at time of sale.

  (b) At the purchaser’s request, the Commissioner may sell stamps to be affixed to packages of cigarettes as evidence of the payment to the tax imposed by this chapter to licensed wholesale dealers for payment within 10 days, at a discount of one and five-tenths percent of their face value if timely paid. In determining whether to sell stamps for payment within 10 days, the Commissioner shall consider the credit history of the dealer and the filing and payment history, with respect to any tax administered by the Commissioner, of the dealer or any individual, corporation, partnership, or other legal entity with which the dealer is or was associated as principal, partner, officer, director, employee, agent, or incorporator.

  (c) The Commissioner shall keep accurate records of all stamps sold to each wholesale dealer and shall pay over all receipts from the sale of stamps to the State Treasurer. (Amended 1959, No. 243, § 3; 1963, No. 226, § 3, eff. July 3, 1963; 1965, No. 131, § 2; 1981, No. 31, § 9; 1983, No. 2 (Sp. Sess.), § 4, eff. July 28, 1983; 2001, No. 140 (Adj. Sess.), § 37; 2013, No. 73, § 9, eff. June 5, 2013; 2015, No. 57, § 75, eff. June 11, 2015.)

• § 7773. Use and redemption of stamps

  No licensed wholesale dealer shall sell or transfer any stamps issued under the provisions of this chapter. The Commissioner shall redeem at the amount paid therefor by the licensed wholesale or retail dealer any unused stamps issued under the provisions of this chapter, which are presented to him or her at his or her office in Montpelier. (Amended 1981, No. 31, § 10; 2013, No. 14, § 14; 2015, No. 57, § 76, eff. June 11, 2015.)

• § 7774. Affixing stamps

  Each licensed wholesale dealer shall affix or cause to be affixed to each individual package of cigarettes sold or distributed by him or her stamps of the proper denomination as required by section 7771 of this title and in such manner as the Commissioner may specify in regulations issued pursuant to this chapter. The stamps may be affixed by a licensed wholesale dealer at any time before the cigarettes are transferred out of his or her possession. (Amended 1971, No. 73, § 28, eff. April 16, 1971; 1981, No. 31, § 11; 2013, No. 14, § 15.)

• § 7775. Retail dealers

  Within 24 hours after coming into possession of any cigarettes not bearing proper stamps evidencing payment of the tax imposed by this chapter and before selling the same, each retail dealer shall affix or cause to be affixed stamps of the proper denomination to each individual package of cigarettes as required by section 7771 of this title and in such manner as the Commissioner may specify in regulations issued pursuant to this chapter. (Amended 2015, No. 57, § 77, eff. June 11, 2015.)

• § 7776. Collection of cigarette tax through nonresident licensed wholesale dealers

  (a) When the Commissioner of Taxes finds that the collection of the tax imposed by this chapter would be facilitated thereby, the Commissioner may, in the Commissioner’s discretion, authorize any resident or nonresident person engaged in the business of manufacturing cigarettes or any resident or nonresident person who ships cigarettes into this State for sale to retail dealers in this State as defined in section 7702 of this title and who qualifies as a licensed wholesale dealer as defined in section 7702 of this title, but need not have a place of business in this State, upon complying with the requirements of the Commissioner to affix or cause to be affixed the stamps required by this chapter on behalf of the purchasers of such cigarettes who would otherwise be taxable therefor, and the Commissioner may sell such stamps to such person as provided in section 7772 of this title.

  (b) A nonresident person shall agree to submit the nonresident person’s books, accounts, and records to examination during reasonable business hours by the Commissioner or the Commissioner’s duly authorized agent.

  (c) A nonresident person authorized pursuant to subsection (a) of this section, other than a foreign corporation that the Secretary of State has authorized to do business in this State, shall, in writing, appoint the Secretary of State and the Secretary’s successors in office to be the nonresident person’s agent for service of process. Service upon the Secretary pursuant to this subsection constitutes sufficient service upon the nonresident person and may be made by delivering duplicate attested copies of the process to the Secretary. When legal process against the nonresident person is served upon the Secretary of State, the Secretary shall notify the nonresident person in the manner specified and shall collect the fee provided in 12 V.S.A. § 852 .

  (d) Any person complying with the provisions of this section shall thereupon become a licensed wholesale dealer within the meaning of this chapter and shall be subject to all provisions of the chapter applicable to wholesale dealers, including the furnishing of a bond specified in subchapter 2 of this chapter. (Amended 1959, No. 231, § 5; 1971, No. 73, § 29, eff. April 16, 1971; 1981, No. 31, § 12; 2013, No. 14, § 16; 2021, No. 105 (Adj. Sess.), § 566, eff. July 1, 2022.)

• § 7777. Records required; inspection and examination; assessment of tax deficiency

  (a) Each licensed wholesale dealer and each retail dealer shall keep complete and accurate records of all cigarettes, little cigars, and roll-your-own tobacco manufactured, produced, purchased, transferred, and sold by the dealer. The records shall be of such kind and in such form as the Commissioner may prescribe and shall be safely preserved for six years in such manner as to ensure permanency and accessibility for inspection by the Commissioner and authorized agents. The Commissioner or authorized agents of the Commissioner may enter in or upon any premises where the Commissioner or they have reason to believe that cigarettes, little cigars, or roll-your-own tobacco are possessed, stored, or sold, for the purpose of determining whether the provisions of this chapter or 33 V.S.A. chapter 19, subchapter 1A or 1B are being obeyed and may examine and copy the books, papers, records, and the stock of any licensed wholesale dealer or retail dealer, for the purpose of determining whether the tax imposed by this chapter has been fully paid.

  (b) If the Commissioner determines that a licensed wholesale dealer has not purchased sufficient stamps to cover sales of cigarettes and little cigars, or that a retail dealer has made sales of unstamped cigarettes or little cigars or untaxed roll-your-own tobacco, the Commissioner shall thereupon assess the deficiency in tax, plus interest and penalties as provided in section 3202 of this title.

  (c) In any case in which a licensed wholesale dealer cannot produce evidence of sufficient stamp purchases to cover the dealer’s receipts and sales or other disposition of cigarettes or little cigars, it shall be presumed that the cigarettes or little cigars were sold without having the proper stamps affixed. In any case in which a licensed wholesale dealer cannot produce proper evidence of payment of the tax on roll-your-own tobacco to cover the dealer’s receipts and sales or other disposition of roll-your-own tobacco, it shall be presumed that the roll-your-own tobacco was sold without the proper tax having been paid.

  (d) If a licensed wholesale dealer has failed to timely pay for stamps obtained for payment within 10 days or to pay the tax imposed on roll-your-own tobacco, the dealer shall be subject to assessment, collection, and enforcement in the same manner as provided under subchapter 4 of this chapter.

  (e) Any dealer who fails to pay the required tax to the Commissioner as required under this chapter shall be personally and individually liable for the amount of such tax, together with interest and penalties under the provisions of section 3202 of this title, and if the dealer is a corporation or other entity, the personal liability shall extend and be applicable to any officer or agent of the corporation or entity who, as an officer or agent, is under a duty to pay or transmit the tax to the Commissioner.

  (f) As an additional or alternate remedy, the Commissioner may issue a warrant directed to the sheriff of any county commanding him or her to levy upon and sell the real and personal property that may be found within the sheriff’s county of any person liable for tax under this chapter for the payment of the amount of the tax, penalties, and interest, and the cost of executing the warrant, and the sheriff shall return the warrant to the Commissioner and pay to the Commissioner the money collected by virtue thereof within 60 days after the receipt of the warrant. The sheriff shall, within five days after the receipt of the warrant, file with the county clerk a copy thereof, and thereupon the clerk shall enter in the judgment docket the name of the person mentioned in the warrant and the amount of the tax, penalties, and interest for which the warrant is issued and the date when the copy is filed. Thereupon the amount of the warrant so docketed shall become a lien upon the title to and interest in real and personal property of the person against whom the warrant is issued. The sheriff shall then proceed upon the warrant in the same manner and with like effect as that provided by law in respect to executions issued against property upon judgments of a court of record, and for services in executing the warrant, the sheriff shall be entitled to the same fees, which may be collected in the same manner. If a warrant is returned not satisfied in full, the Commissioner may from time to time issue new warrants and shall also have the same remedies to enforce the amount due thereunder as if the State had recovered judgment therefor and execution thereon had been returned unsatisfied.

  (g) If any dealer required to pay and transmit a tax under this chapter neglects or refuses to pay the same after demand, the amount, together with all penalties and interest provided for in this chapter and together with any costs that may accrue in addition thereto, shall be a lien in favor of the State of Vermont upon all property and rights to property, whether real or personal, belonging to such dealer. Such lien shall arise at the time demand is made by the Commissioner of Taxes and shall continue until the liability for such sum with interest, penalties, and costs is satisfied or becomes unenforceable. Such lien shall have the same force and effect as the lien for taxes withheld under the withholding provisions of the Vermont income tax law as provided under section 5895 of this title, and notice of such lien shall be recorded as is provided in that section. Certificates of release of such lien shall also be given by the Commissioner as in the case of the aforesaid tax liens. (Amended 1971, No. 73, § 30, eff. April 16, 1971; 1981, No. 31, § 13; 1995, No. 169 (Adj. Sess.), § 18, eff. May 15, 1996; 2001, No. 140 (Adj. Sess.), § 38; 2003, No. 14, § 4; 2013, No. 14, § 17; 2015, No. 57, § 78, eff. June 11, 2015.)

• § 7778. Unstamped packages—Penalties

  (a) No person shall possess more than 10,000 cigarettes, or possess with the intent to sell any cigarettes, that do not bear stamps evidencing payment of tax imposed by this chapter. It shall be an affirmative defense to a charge under this subsection that such cigarettes are:

  (1) in the possession of a licensed wholesale dealer;

  (2) in the course of transit and consigned to a licensed wholesale dealer or retail dealer; or

  (3) in the possession of a retail dealer who has held them for 24 hours or less.

  (b) No person shall sell or transfer or offer for sale or display for sale any cigarettes that do not bear stamps evidencing payment of the tax imposed by this chapter.

  (c) No person shall use more than once any stamp provided for and required by this chapter.

  (d) Any person who shall violate any provision of this section shall, if the tax that may be imposed on such cigarettes is $500.00 or less, be imprisoned not more than one year or fined not more than $1,000.00, or both, or, if the tax that may be imposed on such cigarettes is more than $500.00, be imprisoned not more than three years or fined not more than $10,000.00, or both. (Amended 1965, No. 194, § 10, operative February 1, 1967; 1971, No. 73, § 31, eff. April 16, 1971; 1973, No. 249 (Adj. Sess.), § 103, eff. April 9, 1974; 1981, No. 31, § 14; 1995, No. 29, § 15, eff. April 14, 1995.)

• § 7779. Seizure

  (a) Any cigarettes found at any place in this State without stamps affixed thereto as required by this chapter or any tobacco products found at any place in this State upon which the tax imposed by this chapter has not been paid, are declared to be contraband goods and may be seized without a warrant by the Commissioner, the Commissioner’s agents or employees, or by any peace officer of this State when directed by the Commissioner to do so, unless such cigarettes or tobacco products shall be in the possession of a licensed wholesale dealer, or unless they shall be in the course of transit and consigned to a licensed wholesale dealer or a retail dealer, or unless they shall have been received by a retail dealer within 24 hours. Nothing herein shall be construed to require the Commissioner to confiscate unstamped cigarettes or tobacco products when the Commissioner shall have reason to believe that the owner thereof has possession of the same for personal consumption or is not willfully or intentionally evading the tax imposed by this chapter.

  (b) Any cigarettes found at any place in this State with stamps affixed thereto which stamps have not been paid for as required by this chapter, are declared to be contraband goods and may be seized without a warrant by the Commissioner, the Commissioner’s agents or employees, or by any peace officer of this State when directed by the Commissioner to do so.

  (c) Any cigarettes or tobacco products seized under the provisions of this chapter shall be destroyed by the Commissioner. The seizure of any cigarettes or tobacco products under the provisions of this section shall not relieve any person from a fine or other penalty for violation of this chapter. (Amended 1981, No. 31, § 15; 1995, No. 29, § 16, eff. April 14, 1995; 2001, No. 140 (Adj. Sess.), § 39.)

• § 7780. Hearing

  When any cigarettes or tobacco products shall have been seized under the provisions of section 7779 of this title, any person claiming an interest in such cigarettes or tobacco products who has not previously been heard or who has not waived hearing may make written application to the Commissioner for a hearing, stating an interest in the cigarettes or tobacco products and reasons why they should not be forfeited. Further proceedings on such application for hearing shall be taken as provided in sections 7782 and 7783 of this title. No cigarettes or tobacco products seized under the provisions of section 7779 of this title shall be destroyed while an application for a hearing is pending before the Commissioner, but the pendency of an appeal under the provisions of section 7783 of this title shall not prevent destruction of the cigarettes or tobacco products unless the appellant shall post a satisfactory bond, with surety, in an amount double the estimated value of the cigarettes or tobacco products conditioned upon the successful termination of the appeal. (Amended 1995, No. 29, § 17, eff. April 14, 1995.)

• § 7781. Powers of officer conducting hearings

  The Commissioner and any agent of the Commissioner duly authorized to conduct any inquiry, investigation, or hearing hereunder shall have power to administer oaths and take testimony under oath relative to the matter of inquiry or investigation. At any hearing ordered by the Commissioner, the Commissioner or his or her agent authorized to conduct such hearing and having authority by law to issue such process may subpoena witnesses and require the production of books, papers, and documents pertinent to such inquiry. No witness under subpoena authorized to be issued by the provisions of this chapter shall be excused from testifying or from producing books or papers on the ground that such testimony or the production of such books or other documentary evidence would tend to incriminate him or her, but such evidence or the books or papers so produced shall not be used in any criminal proceeding against him or her. Officers who serve subpoenas issued by the Commissioner or under his or her authority and witnesses attending hearings conducted by him or her hereunder shall receive fees and compensation at the same rates as officers and witnesses in causes before a Criminal Division of the Superior Court, to be paid on vouchers of the Commissioner on order of the Commissioner of Finance and Management from the proper appropriation for the administration of this chapter. (Amended 1965, No. 194, § 10, operative February 1, 1967; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 1983, No. 195 (Adj. Sess.), § 5(b); 1983, No. 230 (Adj. Sess.), § 16; 2009, No. 154, § 238.)

• § 7782. Application for hearing

  Any person aggrieved by any action of the Commissioner or his or her authorized agent under this chapter for which hearing is not elsewhere provided may apply in writing to the Commissioner within 10 days after the notice of such action is delivered or mailed to him or her for a hearing, setting forth the reasons why such hearing should be granted and the manner of relief sought. The Commissioner shall promptly consider each such application and may grant or deny the hearing requested. If the hearing be denied, the applicant shall be notified thereof forthwith. If it be granted, the Commissioner shall notify the applicant of the time and place fixed for such hearing. After such hearing, the Commissioner may make such order in the premises as may appear to him or her just and lawful and shall furnish a copy of such order to the applicant. The Commissioner may, at any time and by notice in writing, order a hearing on his or her own initiative and require the taxpayer or any other individual whom he or she believes to be in possession of information concerning any manufacture, importation, possession, or sale of cigarettes or tobacco products, or both, which have escaped taxation to appear before him or her or his or her duly authorized agent with any specific books of account, paper, or other documents for examination relative thereto. (Amended 1959, No. 231, § 6.)

• § 7783. Appeals

  Any person aggrieved because of any action or decision of the Commissioner under the provisions of this chapter may appeal therefrom within 30 days to the Superior Court of the county in which such person resides. The appellant shall give security, approved by the Commissioner, conditioned to pay the tax levied, if it remains unpaid, with interest and costs. (Amended 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 1997, No. 161 (Adj. Sess.), § 22, eff. Jan. 1, 1998; 2013, No. 73, § 11, eff. June 5, 2013.)

• § 7784. Counterfeiting stamps

  Any person who shall fraudulently make or utter or who shall forge or counterfeit any stamp prescribed by the Commissioner under the provisions of this chapter, or who shall cause or procure the same to be done, or who shall willfully utter, publish, pass, or render as true any false, altered, forged, or counterfeit stamp, or who shall knowingly possess any such false, altered, forged, or counterfeit stamp for the purpose of evading the tax hereby imposed shall be imprisoned for not more than five years nor less than one year. (Amended 1971, No. 199 (Adj. Sess.), § 17.)

• § 7785. Monthly report

  Each licensed wholesale dealer shall file with the Commissioner, on or before the 15th day of each month, a report for the calendar month immediately preceding, in a form prescribed by the Commissioner, showing the amount and source of cigarettes acquired; the amount of stamps purchased; a list identifying the brand families of a tobacco product manufacturer, as that term is defined in 33 V.S.A. chapter 19, subchapters 1A and 1B; the total number of cigarettes upon which stamps were affixed or, in the case of roll-your-own tobacco, the equivalent stick count, as determined by the formula set forth in 33 V.S.A. chapter 19, subchapter 1A, upon which the applicable tax was paid; and such other information as the Commissioner may require. (Added 1981, No. 31, § 16; amended 2003, No. 14, § 5; 2013, No. 14, § 18.)

• § 7786. Gray marketed cigarettes

  (a) No person shall affix a cigarette stamp to or sell or offer for sale in this State any package or container of cigarettes if:

  (1) the container or package does not comply with all the requirements of the federal Cigarette Labeling and Advertising Act (15 U.S.C. § 1331 et seq.) for the placement of labels, warnings, or any other information upon a package of cigarettes that is to be sold within the United States;

  (2) the container or package has been imported into the United States after January 1, 2000, in violation of 26 U.S.C. § 5754;

  (3) the container or package, including a container of individually stamped containers or packages is labeled “For Export Only,” “U.S. Tax Exempt,” “For Use Outside U.S.,” or similar wording indicating that the manufacturer did not intend that the product be sold in the United States; or

  (4) the container or package has been altered by marking or deleting the wording described in subdivision (3) of this subsection.

  (b) Any cigarettes described in subdivision (a)(1), (2), (3), or (4) of this section and found in this State are declared to be contraband goods and may be seized without a warrant by the Commissioner, the Commissioner’s agents or employees, or by any peace officer of this State when directed by the Commissioner to do so, unless the owner of the cigarettes produces sufficient evidence that the cigarettes are in transit through the State for sale outside the United States. Nothing herein shall be construed to require the Commissioner to confiscate cigarettes when the Commissioner shall have reason to believe that the owner thereof has possession of the same for personal consumption. Any cigarettes seized under this section shall be destroyed by the Commissioner. The seizure of any cigarettes under the provisions of this section shall not relieve any person from a fine or other penalty for violation of this chapter.

  (c) A violation of any provision of this section shall also constitute an unfair or deceptive act and practice in commerce prohibited under 9 V.S.A. § 2453 and shall be subject to enforcement and to the rights and remedies provided for under 9 V.S.A. chapter 63.

  (d) Any person may bring an action for appropriate injunctive or other equitable relief for a violation of this section; actual damages, if any, sustained by reason of the violation; and, as determined by the court, interest on the damages from the date of the complaint, taxable costs, and reasonable attorney’s fees. If the trier of fact finds that the violation is flagrant, it may increase recovery to any amount not in excess of three times the actual damages sustained by reason of the violation. (Added 1999, No. 101 (Adj. Sess.), § 2.)

• Subchapter 004: Tobacco Products Tax

• § 7811. Imposition of tobacco products tax

  (a) There is hereby imposed and shall be paid a tax on all other tobacco products, snuff, and new smokeless tobacco possessed in the State of Vermont by any person for sale on and after July 1, 1959 that were imported into the State or manufactured in the State after that date, except that no tax shall be imposed on tobacco products sold under such circumstances that this State is without power to impose such tax, or sold to the United States, or sold to or by a voluntary unincorporated organization of the U.S. Armed Forces operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States. The tax is intended to be imposed only once upon the wholesale sale of any other tobacco product and shall be at the rate of 92 percent of the wholesale price for all tobacco products except snuff, which shall be taxed at $2.57 per ounce or fractional part thereof; new smokeless tobacco, which shall be taxed at the greater of $2.57 per ounce or, if packaged for sale to a consumer in a package that contains less than 1.2 ounces of the new smokeless tobacco, at the rate of $3.08 per package; and cigars with a wholesale price greater than $2.17, which shall be taxed at the rate of $2.00 per cigar if the wholesale price of the cigar is greater than $2.17 and less than $10.00 and at the rate of $4.00 per cigar if the wholesale price of the cigar is $10.00 or more. Provided, however, that upon payment of the tax within 10 days, the distributor or dealer may deduct from the tax two percent of the tax due. It shall be presumed that all other tobacco products, snuff, and new smokeless tobacco within the State are subject to tax until the contrary is established and the burden of proof that any other tobacco products, snuff, and new smokeless tobacco are not taxable hereunder shall be upon the person in possession thereof. Licensed wholesalers of other tobacco products, snuff, and new smokeless tobacco shall state on the invoice whether the price includes the Vermont tobacco products tax.

  (b) The tax established in this section shall not be imposed on:

  (1) cannabis-related supplies sold by a dispensary registered under 7 V.S.A. chapter 37 to registered patients and registered caregivers, as those terms are defined in 7 V.S.A. § 972;

  (2) cannabis products, as defined in 7 V.S.A. § 831, that do not contain tobacco; or

  (3) hemp or hemp products, as defined in 6 V.S.A. § 562, that do not contain tobacco. (Added 1959, No. 231, § 7; amended 1995, No. 14, § 7, eff. April 12, 1995; 2005, No. 191 (Adj. Sess.), § 38; 2007, No. 81, § 6, eff. June 11, 2007; 2009, No. 1 (Sp. Sess.), § H.38; 2009, No. 160 (Adj. Sess.), § 36; 2011, No. 45, § 22; 2013, No. 14, § 19, eff. June 30, 2013; 2013, No. 174 (Adj. Sess.), § 39; 2015, No. 54, § 50; 2019, No. 28, § 2; 2023, No. 3, § 91, eff. July 1, 2023.)

• § 7812. Liability for collection of tax

  The licensed wholesale dealer shall be liable for the payment of the tax on tobacco products that he or she imports or causes to be imported into the State or that he or she manufactures in this State, and every licensed wholesale dealer authorized by the Commissioner to make returns and pay the tax on tobacco products sold, shipped, or delivered by him or her to any person in the State shall be liable for the collection and payment of the tax on all tobacco products sold, shipped, or delivered. Every retail dealer shall be liable for the collection of the tax on all tobacco products in his or her possession at any time, upon which the tax has not been paid by a licensed wholesale dealer, and the failure of any retail dealer to produce and exhibit to the Commissioner or his or her authorized representative, upon demand, an invoice by a licensed wholesale dealer for any tobacco products in his or her possession shall be presumptive evidence that the tax thereon has not been paid and that such retail dealer is liable for the collection of the tax thereon. The amount of taxes advanced and paid by a licensed wholesale dealer or retail dealer as hereinabove provided shall be added and collected as part of the sales price of the tobacco products. (Added 1959, No. 231, § 7; amended 1971, No. 73, § 32, eff. April 16, 1971; 2015, No. 57, § 79, eff. June 11, 2015.)

• § 7813. Returns and payment of tax by licensed wholesale dealer

  Every licensed wholesale dealer shall, on or before the 15th day of each month, file with the Commissioner a return on forms to be prescribed and furnished by the Commissioner showing the quantity and wholesale price of all tobacco products sold, shipped, or delivered by him or her to any person in the State during the preceding calendar month. Such returns shall contain such further information as the Commissioner of Taxes may require. Every licensed wholesale dealer shall pay to the Commissioner with the filing of such return the tax on tobacco products for such month imposed under this subchapter. When the licensed wholesale dealer files the return and pays the tax within the time specified in this section, he or she may deduct therefrom two percent of the tax due. (Added 1959, No. 231, § 7; amended 1967, No. 346 (Adj. Sess.), § 5; 2015, No. 57, § 80, eff. June 11, 2015.)

• § 7814. Floor stock tax

  (a) Snuff. A floor stock tax is hereby imposed upon every retail dealer of snuff in this State in the amount by which the new tax exceeds the amount of the tax already paid on the snuff. The tax shall apply to snuff in the possession or control of the retail dealer at 12:01 a.m. on July 1, 2015, but shall not apply to retail dealers who hold less than $500.00 in wholesale value of such snuff. Each retail dealer subject to the tax shall, on or before July 25, 2015, file a report to the Commissioner in such form as the Commissioner may prescribe showing the snuff on hand at 12:01 a.m. on July 1, 2015, and the amount of tax due thereon. The tax imposed by this section shall be due and payable on or before August 25, 2015, and thereafter shall bear interest at the rate established under section 3108 of this title. In case of timely payment of the tax, the retail dealer may deduct from the tax due two percent of the tax. Any snuff with respect to which a floor stock tax has been imposed and paid under this section shall not again be subject to tax under section 7811 of this title.

  (b) Cigarettes, little cigars, or roll-your-own tobacco. Notwithstanding the prohibition against further tax on stamped cigarettes, little cigars, or roll-your-own tobacco under section 7771 of this title, a floor stock tax is hereby imposed upon every dealer of cigarettes, little cigars, or roll-your-own tobacco in this State who is either a wholesaler or a retailer who, at 12:01 a.m. on July 1, 2015, has more than 10,000 cigarettes or little cigars or who has $500.00 or more of wholesale value of roll-your-own tobacco, for retail sale in his or her possession or control. The amount of the tax shall be the amount by which the new tax exceeds the amount of the tax already paid for each cigarette, little cigar, or roll-your-own tobacco in the possession or control of the wholesaler or retail dealer at 12:01 a.m. on July 1, 2015, and on which cigarette stamps have been affixed before July 1, 2015. A floor stock tax is also imposed on each Vermont cigarette stamp in the possession or control of the wholesaler at 12:01 a.m. on July 1, 2015 and not yet affixed to a cigarette package, and the tax shall be at the rate of $0.33 per stamp. Each wholesaler and retail dealer subject to the tax shall, on or before July 25, 2015, file a report to the Commissioner in such form as the Commissioner may prescribe showing the cigarettes, little cigars, or roll-your-own tobacco and stamps on hand at 12:01 a.m. on July 1, 2015 and the amount of tax due thereon. The tax imposed by this section shall be due and payable on or before July 25, 2015, and thereafter shall bear interest at the rate established under section 3108 of this title. In case of timely payment of the tax, the wholesaler or retail dealer may deduct from the tax due two and three-tenths of one percent of the tax. Any cigarettes, little cigars, or roll-your-own tobacco with respect to which a floor stock tax has been imposed under this section shall not again be subject to tax under section 7771 of this title. (Added 1959, No. 231, § 7; amended 1995, No. 14, § 10, eff. April 12, 1995; 2001, No. 140 (Adj. Sess.), § 25; 2001, No. 140 (Adj. Sess.), § 27, eff. July 1, 2003; 2005, No. 191 (Adj. Sess.), § 39; 2009, No. 1 (Sp. Sess.), § H.39; 2011, No. 45, § 27a; 2013, No. 174 (Adj. Sess.), § 40; 2015, No. 54, § 51.)

• § 7815. Licensed wholesale dealers

  All resident licensed wholesale dealers within the State are required to pay the tax on tobacco products for which they may be liable. A person outside this State who ships or transports tobacco products to retailers in this State, to be sold by those retailers, may make application for license as a nonresident licensed wholesale dealer, be granted such license by the Commissioner, and thereafter be subject to all the provisions of this chapter so far as the same pertain to tobacco products, and be entitled to act as a licensed wholesale dealer, provided he or she files proof with his or her application that he or she has appointed the Secretary of State as his or her agent for service of process relating to any matter or issue arising under this chapter. Such nonresident person shall also agree to submit his or her books, accounts, and records to examination during reasonable business hours by the Commissioner or his or her duly authorized agent. (Added 1959, No. 231, § 7; amended 1981, No. 31, § 17; 2013, No. 14, § 20.)

• § 7816. Records to be kept; examination

  At the time of delivering other tobacco products, snuff, or new smokeless tobacco to any person, each licensed wholesale dealer shall make a true duplicate invoice showing the date of delivery; and the items; and the wholesale price of each item in each shipment of other tobacco products, snuff, and new smokeless tobacco delivered; and the name of the purchaser to whom delivery is made and shall retain the same for a period of three years, subject to the use and inspection of the Commissioner. Each licensed wholesale dealer shall procure and retain invoices showing the items and wholesale price of each item in each shipment of other tobacco products, snuff, or new smokeless tobacco received by him or her; the date of receipt; and the name of the shipper and shall retain the same for a period of three years, subject to the use and inspection of the Commissioner. The Commissioner, by regulation, may provide that whenever other tobacco products, snuff, or new smokeless tobacco are shipped into the State, the railroad company, express company, trucking company, or other carrier transporting any shipment thereof shall file with the Commissioner a copy of the freight bill within 10 days after the delivery in the State of each shipment. All licensed wholesale dealers shall maintain and keep for a period of three years such other records of tobacco products received, sold, or delivered within the State as may be required by the Commissioner. The Commissioner or authorized agents of the Commissioner are hereby authorized to examine the books, papers, invoice, and other records; stock of other tobacco products, snuff, and new smokeless tobacco in and upon any premises where the same are placed, stored, and sold; and equipment of any such dealer pertaining to the sale and delivery of other tobacco products, snuff, and new smokeless tobacco taxable under this subchapter. To verify the accuracy of the tax imposed and assessed by this subchapter, each such person is hereby directed and required to give to the Commissioner or authorized agents of the Commissioner the means, facilities, and opportunity for such examinations as are herein provided for and required. (Added 1959, No. 231, § 7; amended 2013, No. 14, § 21.)

• § 7817. Determination of tax on failure to file return

  (a) When the Commissioner discovers, by examination of the records of the taxpayer as provided in section 7816 of this title or otherwise, that a person required to file a return under this subchapter has filed an incorrect or insufficient return, the Commissioner may, at any time within three years after the date the return was due, determine the correct amount of tax and shall give notice to the taxpayer of the amount of any deficiency in such tax, together with penalty and interest as hereinafter provided. If no return has been filed as provided by law, the tax may be assessed at any time. When, before the expiration of the period prescribed herein for assessment of an additional tax, a taxpayer has consented in writing that the period be extended, the amount of the additional tax due may be determined at any time within the extended period. The period so extended may be further extended by subsequent consents in writing made before the expiration of the extended period.

  (b) A determination by the Commissioner in accordance with subsection (a) of this section shall fix the tax, unless the person against whom it is assessed shall, within 60 days after receiving the notice of such determination, apply to the Commissioner for a hearing as is herein provided. The decision of the Commissioner after the hearing may be reviewed as provided in this chapter. (Added 1959, No. 231, § 7; amended 1971, No. 73, § 33, eff. April 16, 1971; 1989, No. 222 (Adj. Sess.), § 13; 2007, No. 81, § 5, eff. June 11, 2007; 2013, No. 73, § 10, eff. June 5, 2013.)

• § 7818. Tax as debt to the State

  A tax on tobacco products imposed by this subchapter and all increases, interest, and penalties thereon shall become, from the date it is due and payable, a personal debt from the person liable to pay the same to the State of Vermont, to be recovered in a civil action under this section. (Added 1959, No. 231, § 7.)

• § 7819. Refunds

  Whenever any tobacco products upon which the tax has been paid have been sold and shipped into another state for sale or use there, or have become unfit for use and consumption or unsalable, or have been destroyed, the licensed wholesale dealer shall be entitled to a refund of the actual amount of tax paid with respect thereto. If the Commissioner is satisfied that any licensed wholesale dealer is entitled to a refund, he or she shall so certify to the Commissioner of Finance and Management who shall issue his or her warrant in favor of the licensed wholesale dealer entitled to receive such refund. (Added 1959, No. 231, § 7; amended 1983, No. 195 (Adj. Sess.), § 5(b); 2015, No. 57, § 81, eff. June 11, 2015.)

• § 7820. Repealed. 1997, No. 156 (Adj. Sess.), § 37, eff. January 1, 1999.

• § 7821. Criminal penalties

  Any person who shall fail, neglect, or refuse to comply with or shall violate the provisions of this chapter relating to the tax on tobacco products or the rules adopted by the Commissioner under this chapter relating to such tax shall be guilty of a misdemeanor and upon conviction for a first offense shall be sentenced to pay a fine of not more than $250.00 or to be imprisoned for not more than 60 days, or both, such fine and imprisonment in the discretion of the court, and for a second or subsequent offense shall be sentenced to pay a fine of not less than $250.00 nor more than $500.00 or be imprisoned for not more than six months, or both, such fine and imprisonment in the discretion of the court. This section shall not apply to violations of sections 7731–7734 and 7776 of this title. (Added 1959, No. 231, § 7; amended 2015, No. 57, § 82, eff. June 11, 2015; 2021, No. 105 (Adj. Sess.), § 567, eff. July 1, 2022.)

• § 7822. Application of provisions

  The provisions of subchapters 1-3 of this chapter shall apply to the tobacco products tax imposed by this subchapter unless they are clearly applicable only to the tax on cigarettes and the enforcement thereof. (Added 1959, No. 231, § 7.)

• § 7823. Deposit of revenue

  The revenue generated by the taxes imposed under this chapter shall be credited to the General Fund. (Added 1995, No. 14, § 8; amended 1999, No. 152 (Adj. Sess.), § 272a; 2005, No. 215 (Adj. Sess.), § 314; 2009, No. 1 (Sp. Sess.), § E.307.3, eff. June 2, 2009; 2011, No. 75 (Adj. Sess.), § 109; 2019, No. 6, § 70, eff. April 22, 2019.)