Rev 1000 Tobacco Tax

CHAPTER Rev 1000 TOBACCO TAX

Statutory Authority: RSA 78:6

PART Rev 1001 DEFINITIONS

Rev 1001.01 "Bond" means an agreement between the wholesaler and the surety company whereby the surety company, upon default of the wholesaler, pays the outstanding debt of the wholesaler to the state up to the amount of the bond.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1001.02 “Department” means the New Hampshire department of revenue administration.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1001.03 “Manufacturer” means “manufacturer” as defined in RSA 78:1, III, namely “any person engaged in the business of importing, exporting, producing, or manufacturing tobacco products who sells his product only to licensed wholesalers”.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1001.04 "Regular accounting quarter" means the 4 3-month periods that coincide with the taxpayer's accounting period.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05 (formerly Rev 1001.08)

Rev 1001.05 "Reporting period" means one calendar month, unless otherwise authorized by the commissioner of the department or the commissioner's designee.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05(formerly Rev 1001.09)

Rev 1001.06 “Retailer” means “retailer” as defined in RSA 78:1,XI, namely “any person who sells tobacco products to consumers, and any vending machine in which tobacco products are sold”.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1001.07 "Smoked" means inhaled and exhaled fumes from burning tobacco products.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05(formerly Rev 1001.10)

Rev 1001.08 "Smokeless tobacco products" means any other tobacco product manufactured in such a manner as to be suitable for use by any method other than inhaling and exhaling burning tobacco products including the following:

(a) Cavendish tobacco;

(b) Plug tobacco;

(d) Any finely cut, ground or powdered tobacco such as snuff and snuff flour.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05 (formerly Rev 1001.11)

Rev 1001.09 “Snuff and snuff flour” means any finely cut, ground, or powdered tobacco that is not intended to be smoked.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05 (formerly Rev 1001.12)

Rev 1001.10 “Sub-jobber” means “sub-jobber” as defined in RSA 78:1, VII, namely “any person doing business in this state who buys stamped tobacco products from a licensed wholesaler and who sells all of his tobacco products to other sub-jobbers vending machine operators, and retailers”.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05 (formerly Rev 1001.13)

Rev 1001.11 "Usable" means cigarettes that:

(a) Are saleable;

(b) Are suitable for display;

(d) Have not been manually or mechanically damaged.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05(formerly Rev 1001.13)

Rev 1001.12 “Wholesaler” means “wholesaler” as defined in RSA 78:1, V, namely “any person doing business in this state who shall purchase all his unstamped products directly from a licensed manufacturer and who shall sell all of his products to licensed wholesalers, sub-jobbers, vending machine operators, retailers, and those persons exempted from the tobacco tax under RSA 78:7-b”.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

PART Rev 1002 STAMPS

Rev 1002.01 Requirement for Use of Stamps.

(a) Wholesalers shall be required to affix "A" or "B" stamps, acquired from the department, to unstamped cigarette packages by a heat transfer stamp method, either manually or mechanically.

(b) The "A" stamp shall:

(1) Have a value equal to the tax rate, as established in RSA 78:7 for packs of 20 cigarettes, multiplied by 125%; and

(2) Be applied only to individual packages containing 25 cigarettes.

(1) Be applied to individual packages containing 20 or less cigarettes; and

(2) Have a value equal to the tax rate, as established in RSA 78:7 for packs of 20 cigarettes.

(d) For transactions of individual packages of less than 20 cigarettes, the wholesaler shall:

(1) Maintain documentation to show how many packs were stamped and how many cigarettes were in each package;

(2) Provide a copy of a paid manufacturer's invoice to substantiate these transactions; and

(3) Submit a report of monthly transactions to the department, which shall determine the proportional credit for these transactions.

(e) For packages too small to receive the stamp, the wholesaler shall, in lieu of a stamp:

(1) Maintain documentation to show the total number of packages and how many cigarettes were in each pack; and

(2) Submit monthly to the department:

a. A summary report of the documentation required under (d)(1) and (e)(1), above;

b. A copy of a paid manufacturer's invoice; and

c. The tax due by calculating the proportional tax for the number of cigarettes contained in the total number of packages transferred to other licensees.

(f) There shall be no tax stamp affixed on smokeless tobacco products and loose tobacco products.

(g) Each invoice issued by a wholesaler shall state that the tax has been collected.

Source. #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1002.02 Sample or Gratis Tobacco Products.

(a) Manufacturers providing sample or gratis tobacco products, such as for sales or advertising campaigns, shall, prior to distributing such packages, ship them to a New Hampshire licensed wholesaler.

(b) New Hampshire licensed wholesalers receiving sample or gratis tobacco products, pursuant to (a), above, shall:

(1) Affix the appropriate tobacco tax stamps, as provided in Rev 1002.01, or

(2) Issue an invoice stating that the tax has been collected as required in Rev 1003.01.

(c) The wholesaler shall be responsible for obtaining reimbursement from the manufacturer for the cost of the tobacco tax stamp, or the tax as applied to the usual wholesale price on the smokeless tobacco product.

Source. #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05 (formerly Rev 1002.05)

PART Rev 1003 SMOKELESS TOBACCO PRODUCTS

Rev 1003.01 Smokeless Tobacco Stamp. Each invoice for smokeless tobacco stamps issued by a wholesaler shall state that the tax has been collected.

Source. #1838, eff 10-19-81; ss by #2206, eff 12-12-82; and by #2357, eff 5-1-83; ss by #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1003.02 Smokeless Tobacco Tax Liability.

(a) All wholesalers shall have the following options to report their tax liability for the collection of the tax on smokeless tobacco products by filing a Form DP-151, “Smokeless Tobacco Tax Return”:

(1) On a monthly basis; or

(2) On a quarterly basis if permission to file quarterly has been granted by the commissioner or the commissioner's designee.

(b) Wholesalers requesting to file a smokeless tobacco tax return for a quarterly period shall submit a request in writing to:

New Hampshire Department of Revenue Administration

Commissioner

P.O. Box 457

Concord, New Hampshire, 03302-0457.

(1) The wholesaler’s:

a. Name and address;

b. Federal tax identification number;

c. License number; and

d. Account number; and

(2) The reasons why a change of reporting period is requested.

(d) The request to file on a quarterly basis shall be granted if:

(1) The wholesaler's average monthly tax liability is $500.00 or less per month for the calendar quarter immediately preceding the submission of the request; and

(2) The wholesaler has no outstanding tax liability.

(e) Permission to file quarterly shall automatically be revoked by the commissioner if:

(1) The wholesaler fails to file a complete return or remit taxes on a timely basis;

(2) Any checks are returned for nonsufficient funds; or

(3) The wholesaler fails to comply with the requirements of RSA 78 or this chapter.

(f) The due date of quarterly returns shall be the 15th day of the month following the end of each calendar quarter.

(g) If, during any subsequent calendar quarter, the average tax liability of a wholesaler filing on a quarterly basis exceeds $500.00 per month, the wholesaler shall commence monthly filings.

Source. #1838, eff 10-19-81; ss by #2206, eff 12-12-82; amd by #2357, eff 5-1-83; ss by #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1003.03 Records of Retail Prices for Cigarettes. Upon request from the department, wholesalers shall provide, from their retailer invoices, the prices charged to a retailer for a carton of cigarettes.

Source. #1838, eff 10-19-81; ss by #2206, eff 12-12-82; ss by #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-06

Rev 1003.04 Credits or Refunds for Returned Smokeless Tobacco for Wholesalers.

(a) Wholesalers shall obtain credits or refunds for outdated, damaged or unsalable returned tobacco products other than cigarettes, as provided by RSA 78:10, by either of the following methods:

(1) By taking a credit of the amount due against the tax liability on their Form DP-151, “Smokeless Tobacco Tax Return”; or

(2) A written request to the department that a refund be sent to the wholesaler.

(b) The amount of credit or refund shall be calculated using the tax rate and wholesale price in effect at the time the credit or refund is taken or requested.

(c) Any 3% commission taken by the wholesaler pursuant to RSA 78:9-a, prior to its repeal, shall be deducted from the amount of the credit or refund being claimed for smokeless tobacco products purchased prior to July 1, 2003.

(d) Each wholesaler requesting a credit or refund shall also provide copies of:

(1) Invoices showing the following:

a. The name and address of the retailer returning the smokeless tobacco product to the wholesaler;

b. The date the smokeless tobacco product was sent back to the wholesaler;

c. The description and quantity of smokeless tobacco product returned by a retailer to the wholesaler; and

d. The reason the smokeless tobacco product was returned;

(2) Any documents used by the wholesaler to return the smokeless tobacco product to the manufacturer; and

(3) All affidavits from the manufacturer verifying the receipt and destruction of the smokeless tobacco product for which the credit or refund is being claimed.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

PART Rev 1004 PURCHASES OF TAX STAMPS

Rev 1004.01 Purchase of Tax Stamps. Once licensed, New Hampshire licensed wholesalers purchasing tax stamps shall:

(a) Submit a completed Form CD-15, “Cigarette Stamp Order”, to the department’s collections division;

(b) Be liable for the payment of all shipping expenses including any insurance charges; and

Source. #1838, eff 10-19-81; ss by #2206, eff 12-12-82; amd by #2541, eff 11-22-83; ss #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1004.02 Independence of Transactions.

(a) Each purchase of "A" and "B" tax stamps shall be a separate transaction.

(b) No credit or debit incurred in one transaction shall be applied to another transaction.

Source. #1838, eff 10-19-81; ss by #2206, eff 12-12-82; amd by #2541, eff 11-22-83; ss by #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1004.03 Purchases of Tax Stamps on Credit.

(a) To open a credit account and charge purchases of stamps, wholesalers shall submit a written request to:

New Hampshire Department of Revenue Administration

Collections Division

P.O. Box 454

Concord N.H. 03302-0454

(b) The request shall be accompanied by:

(1) The wholesaler's most recent financial statement prepared in accordance with generally accepted accounting principles;

(2) The names, addresses and telephone numbers of 3 credit references; and

(3) A completed Form CD-18, “Credit Bond Certification Form”.

(c) A wholesaler shall not have an outstanding balance for more than 30 days for charged purchases in an amount not to exceed 75% of the bond amount.

(d) Wholesalers shall be required to pay for a charged order within 30 calendar days of shipment of the stamps.

(e) Wholesalers may pay for orders charged to their credit account using a noncertified company check.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1004.04 Payment Methods. Purchases of tax stamps shall be paid for by:

(a) Charging the purchase to the wholesaler's credit account; or

(b) Immediate payment for the total amount of the order by presenting the department with:

(1) Cash;

(2) A money order issued through a third-party payable to the State of New Hampshire;

(3) A cashier’s check payable to the State of New Hampshire; or

(4) A certified check payable to the State of New Hampshire; and

Source. #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

PART Rev 1005 ACCOUNTING RECORDS

Rev 1005.01 Content and Maintenance of Accounting Records.

(a) All purchase and sales records shall be maintained in a manner that readily provides the following:

(1) The total number of cigarette packages and the total count of cigarettes per package;

(2) The individual "A" and "B" tax stamp purchase requisitions;

(3) The total smokeless tobacco sales, listed by each individual taxing jurisdiction; and

(4) The records such as, but not limited to:

a. Copies of monthly filed Form AU-201, “Non-Resident Wholesaler’s Tax Report” or Form AU-202, “Resident Wholesaler’s Tax Report”;

b. Accounting policy and procedures manuals relevant to cigarette and tobacco tax;

c. Contracts, purchase agreements, or both, with all cigarette or tobacco manufacturers or importers;

d. Wholesaler shipment contracts;

e. Rules, regulations, and bylaws relating to cigarettes or tobacco products;

f. Copies of all invoices for sales of cigarettes or tobacco products to all states;

g. All invoices for purchases of cigarettes or tobacco products;

h. Monthly inventory worksheets for cigarette or tobacco products;

i. Monthly inventory of all stamp purchases;

j. Copies of all Form DP-151, “Smokeless Tobacco Tax Return”;

k. Copies of any and all cigarette or tobacco tax returns filed with other states;

l. Copies of all records pertaining to the destruction of or return of cigarette or tobacco products to the manufacturer; and

m. Copies of all shipping records and bills of lading.

(b) The following records shall be maintained by a wholesaler and retained for a period of 3 years or until the resolution of any contested matters involved in an adjudicative proceeding or litigation with the department, whichever is later:

(1) Books of account, including but not limited to:

a. The general ledger;

b. The cash receipts;

c. The cash disbursements; and

d. The sales and purchase journals;

(2) Invoices for all tobacco products:

a. Acquired;

b. Sold; or

c. Exchanged;

(3) Documentation for all cigarettes, by number of packages and number of cigarettes per package, returned to manufacturer indicating material returned and date returned;

(4) Bills of lading indicating date the tobacco products were received;

(5) Quarterly inventory for:

a. All unstamped cigarettes, usable or damaged, in the possession of a resident wholesaler with only New Hampshire sales;

b. All stamped and unstamped New Hampshire cigarettes, usable or damaged, in the possession of a resident wholesaler, with both New Hampshire and out-of-state sales; and

c. New Hampshire stamped cigarettes, which are usable or damaged, in the possession of a non-resident wholesaler;

(6) Quarterly inventory of all heat transfer stamps;

(7) Daily log of cigarette packages stamped;

(8) Invoices for all heat transfer stamps purchased;

(9) Record of invoices for all sample tobacco products received;

(10) Documentation for all smokeless tobacco, by number of units returned to the manufacturer and the date returned; and

(11) Invoices indicating New Hampshire smokeless tobacco tax charged.

Source. #1838, eff 10-19-81; ss by #2206, eff 12-12-82; ss by #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1005.02 Tobacco Product Purchases and Out-of-State Sales.

(a) All tobacco product purchases and out-of-state sales shall be recorded separately in the books of original entry and the general ledger.

(b) Out-of-state tobacco product purchases shall not be grouped with in-state purchases or out-of-state sales.

Source. #1838, eff l0-19-81; ss by #2206, eff 12-12-82; ss by #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff
12-21-05

Rev 1005.03 Out-of-State Licensees.

(a) Out-of-state wholesalers shall record tobacco product sales into New Hampshire separately from all other sales.

(b) Out-of-state wholesalers shall maintain the New Hampshire sales invoices separately.

Source. #1838, eff 10-19-81; ss by #2206, eff 12-12-82; ss by #4158, eff 11-3-86; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff
12-21-05

PART Rev 1006 REPORTS REQUIRED

Rev 1006.01 Administration.

(a) For purposes of RSA 21-J:31, the required cigarette tax reports, and Form AU-202, “Resident Wholesaler's Cigarette Tax Report” or Form AU-201, “Non-Resident Wholesaler's Cigarette Tax Report”, shall be considered a return.

(b) For purposes of RSA 21-J:29, the statute of limitations for audit purposes shall be based on the taxpayer's reporting period.

(c) For purposes of RSA 21-J:28, RSA 21-J:31, and RSA 21-J:33, Form DP-151, “Smokeless Tobacco Product Return”, shall be considered a return in compliance with RSA 78:12, II.

Source. #1838, eff 10-19-81; ss by #2206, eff 12-12-82; ss by #2541, eff 11-22-83; ss by #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff
12-21-05

PART Rev 1007 SALE TO MINORS PROHIBITED

Rev 1007.01 Warning Signs.

(a) Immediately upon the issuance or renewal of a tobacco license, and before the sale of any tobacco products, each retailer of tobacco products shall post a warning sign provided by the department or a substitute sign, as provided in Rev 1007.02 below.

(b) The warning signs shall be posted in a conspicuous place to provide notice to persons selling or purchasing tobacco products.

(1) By the individual making the tobacco product sale at the location where that individual regularly makes such sales;

(2) By the individual making the tobacco product purchase;

(3) On each tobacco vending machine; and

(4) On any other retail display or tobacco product sales location within the retail facility.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1007.02 Substitute Warning Signs.

(a) Retailers of tobacco products may provide and use signs of equivalent or greater visibility than those provided by the department.

(b) The substitute signs shall contain the words:

"State law prohibits the sale of tobacco products to persons under age 18. Violators shall be subject to fine."

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1007.03 Report of Sale to a Minor.

(a) Any person or persons reporting the sale of tobacco products to a minor shall do so in writing to the commissioner providing the information as required by Rev 207.

(b) A person or persons reported to the commissioner as selling tobacco products to minors shall have a right to an adjudicative proceeding, as provided in Rev 207.

Source. #4707, eff 11-21-89; ss by #5301, eff 12-26-91; ss by #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1007.04 Penalties for Vending Machine Operators. The department shall impose a penalty pursuant to RSA 78:12-d, VII, when vending machine operators violate RSA 78:12-d, I through V.

Source. #8526, eff 12-21-05

PART Rev 1008 ADMINISTRATION

Rev 1008.01 Confidentiality of Department Records.

(a) The confidentiality of the department's records under RSA 78 shall be as follows:

(1) All “Smokeless Tobacco Tax Returns”, reports required under Rev 1006 and licensee information, other than that contained on a license, shall be confidential and shall only be disclosed in conformity with the provisions of RSA 21-J:14; and

(2) All information contained on a license issued by the department under RSA 78 shall be nonconfidential information under the provision of RSA 78:2,I-a.

(b) A licensee may authorize:

(1) The department to disclose their confidential tax information to their authorized representatives; or

(2) Their representative to act on their behalf in working with the department.

(1) A properly executed power of attorney form is on file with the department;

(2) The licensee authorizes the specific disclosure or actions to be performed by the representative in a letter to the department; or

(3) The taxpayer is physically present when such disclosure or action is occurring.

(d) If a power of attorney is provided to the department, the provider shall use one of the following formats:

(1) The department's Form DP-2848, “Power of Attorney”, described by Rev 2903.03;

(2) A letter addressed to the department containing the following:

a. The person who is granting the power of attorney:

b. Name and mailing address;

c. Federal tax identification number;

d. License number;

e. Name, mailing address and telephone number of the person to whom the power of attorney is granted;

f. The specific purpose for which the power of attorney is granted and the extent of the authority granted;

g. The period of time for which the authority is to be in effect; and

h. The dated signature of the person, or other authorized agent, granting the power of attorney, made in the presence of 2 disinterested witnesses unless the power of attorney is granted to an attorney, a certified public accountant or the preparer of the return.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1008.02 Pre-Assessment Conference.

(a) The purpose of an informal pre-assessment conference shall be to discuss the audit findings with audit division management personnel in an effort to reach an agreement on the issues of fact or audit results.

(b) At the conclusion of an audit, when the facts and circumstances of the audit review indicate to the department that an informal pre-assessment conference would benefit both the state and the licensee, the audit division shall provide an informal pre-assessment conference for the licensee, or its authorized representative.

(1) The date, time and location for the conference; and

(2) The advance information that the licensee or the authorized representatives shall be required to provide the audit division.

(d) The information required by (c)(2), above, shall include:

(1) The name, address and identification number of the licensee;

(2) An outline of the areas of agreement and disagreement;

(3) Documentation in support of the licensee’s position such as:

a. Citations of supporting case law;

b. Statutory or regulatory provisions; and

c. Documents or correspondence from unrelated parties;

(4) Responses to any outstanding questions raised by the auditor during the audit; and

(5) The names of the individuals who shall participate in the conference on behalf of the licensee.

(e) Upon completing the review of material provided during the pre-assessment conference, the audit division shall issue a tax notice, notice of refund or no change letter which shall begin the period for formal appeal to the commissioner under RSA 21-J:28-b and Rev 200.

(f) If a taxpayer does not agree with the departments findings, they may request a pre-assessment conference.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1008.03 Tobacco License.

(a) A New Hampshire tobacco license shall be required of a:

(1) Manufacturer;

(2) Wholesaler;

(3) Sub-jobber;

(4) Retailer; or

(5) Vending machine operator.

(b) Wholesalers, retailers and sub-jobbers shall apply for a separate license for each location where they sell cigarettes.

(c) Any person whose license has been discontinued, expired or revoked and who want to sell tobacco products shall apply for a new license.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1008.04 Tobacco License Application.

(a) An applicant shall:

(1) Complete and file Form DP-31, “Application for Tobacco License”, with the department’s document processing division; and

(2) Remit the applicable statutory fee pursuant to RSA 78:2.

Source. #8526, eff 12-21-05

Rev 1008.05 Posting the License.

(a) The license shall be posted in a conspicuous place by the licensee.

(b) Vending machine operators shall apply either a sticker or the license to the vending machine and a sign relative to selling to minors by the locking device.

(d) If a sealed machine is tampered with, the penalty pursuant to RSA 78:3, shall be imposed.

Source. #8526, eff 12-21-05

Rev 1008.06 Discontinuing Operations.

(a) A licensee that discontinues operations subject to the provisions of RSA 78 shall return the license to the department’s collections division by:

(1) Mailing it to:

New Hampshire Department of Revenue Administration

P. O. Box 457

Concord New Hampshire 03302-0457; or

(2) Delivering it to Governor Hugh J. Gallen Office Park South, 109 Pleasant Street, Medical and Surgical Building, Concord, NH.

(b) License fees shall not be refundable if business operations cease prior to the expiration date of the license.

Source. #8526, eff 12-21-05

Rev 1008.07 Suspension of Tobacco Tax License.

(a) If the department finds that the licensee has willfully violated or neglected the statute or the rules administering the tobacco tax, it shall commence an emergency action to suspend or revoke the license.

(b) An adjudicative proceeding pursuant to Rev 200 shall be commenced within 10 days of the notice of intent to suspend or revoke.

(c) The licensee shall have an opportunity to appear at the proceeding and show cause why the suspension or revocation should not be granted.

(d) Any valid license held by a licensee shall remain in full force and effect pending the issuance of a final order on the notice of intent to suspend or revoke.

(e) The commissioner shall suspend a license upon the presiding officer's determination that the license holder has violated the statute or rules administering the tobacco tax by actions such as, but not limited to:

(1) Failing to file a tobacco tax return or report;

(2) Failing to timely remit tobacco taxes to the department;

(3) Making a payment that is rejected by the licensee's financial institution for insufficient funds;

(4) Violating the provisions of RSA 78:14 regarding sale of unstamped tobacco products;

(5) Violating the provisions of RSA 78:3 regarding tampering with a seal affixed by the department to tobacco products vending machines; or

(6) Violating the provisions of RSA 126-K relative to the sale of tobacco products to minors.

(f) The commissioner shall revoke a license upon the presiding officer's determination that the license holder has repeatedly violated the statute or rules administering the tobacco tax by actions such as, but not limited to:

(1) Failing to file tobacco tax returns or reports;

(2) Failing to timely remit tobacco taxes to the department;

(3) Making a payment that is rejected by the licensee's financial institution for insufficient funds;

(4) Violating the provisions of RSA 78:14 regarding sale of unstamped tobacco products;

(5) Violating the provisions of RSA 78:3 regarding tampering with a seal affixed by the department to tobacco products vending machines; or

(6) Violating the provisions of RSA 126-K relative to the sale of tobacco products to minors.

(g) An aggrieved licensee may appeal, pursuant to RSA 21-J:28-b, any adverse order by filing such appeal with the board of tax and land appeals or the superior court of the county in which the licensee resides or has a place of business within 10 days of receipt of the order.

(h) A license affected by the order shall be temporarily reinstated during the pendency of the appeal.

Source. #8526, eff 12-21-05

PART Rev 1009 FORMS AND REPORTS

Rev 1009.01 Availability of Tax Returns, Forms and Related Documents. All returns, forms and related documents may be obtained by:

(a) Accessing the department’s website at: www.nh.gov/revenue;

(b) Calling the department forms line at 603-271-2192; or

New Hampshire Department of Revenue Administration

P.O. Box 457

Concord, New Hampshire 03302-0457.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1009.02 Manufacturer’s Report.

(a) On or before the 30th day following the end of each month, every manufacturer shall send the department’s audit division a written report of unstamped cigarettes and gratis cigarettes transported into this state containing:

(1) Name and address of wholesaler receiving tobacco products;

(2) Manufacturer’s federal tax identification number; and

(3) Manufacturer's account number;

(4) Invoice number;

(5) Invoice date;

(6) Shipping code;

(7) Number of cigarettes by package size;

(8) Number of sample or gratis tobacco products, on which the tax value is to be applied by the wholesaler; and

(9) The invoice number, invoice date, and shipping code of smokeless tobacco by:

a. Product type;

b. Quantity shipped; and

c. List price.

(b) The report shall be mailed to:

New Hampshire Department of Revenue Administration

Audit Division

PO Box 457

Concord, New Hampshire 03302-0457.

(c) All records supporting the information in the manufacturer's report shall be retained for 3 years or until the resolution of any contested matters involved in an adjudicative proceeding or litigation with the department, whichever is later.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1009.03 Form AU-201, Non-Resident Wholesaler's Cigarette Tax Report.

(a) Every non-resident wholesaler shall complete and file with the department’s audit division Form AU-201, “Non-resident Wholesaler's Cigarette Tax Report”, on or before the 30th day following the end of their regular accounting quarter by providing:

(1) Their name;

(2) Their license number;

(3) The period of time starting and ending dates;

(4) The number of:

a. Packages, itemized by number of cigarettes in a package, of all cigarette sales, including sample or gratis cigarette packages, transported into New Hampshire during the accounting period;

b. New Hampshire stamped cigarettes packages, itemized by number of cigarettes in a package, on hand at the end of the period;

c. Stamps, itemized by type, purchased during the period;

d. Stamps, itemized by type, on hand at the end of the period;

e. New Hampshire stamped cigarette packages returned to the manufacturers for credit;

f. The total purchases of stamps during the period; and

g. The total number of New Hampshire cigarette package sales;

(5) The accounts payable due New Hampshire, as of the date of the report, for purchases of tax stamps;

(6) A statement by a company/corporate officer, certifying:

“I certify the above information to be true and correct”; and

(7) A dated signature, in ink.

(b) The information required on Form AU-201, “Non-Resident Wholesaler’s Cigarette Tax” shall agree with the distributor's accounting records for the reporting period.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1009.04 Form AU-202, Resident Wholesaler's Cigarette Tax Report.

(a) Every resident wholesaler shall complete and file with the department Form AU-202, “Resident Wholesaler's Cigarette Tax Report”, on or before the 30th day following the end of their regular accounting quarter by providing:

(1) Their Name;

(2) Their license number;

(3) The number of:

a. Packages of unstamped cigarettes, itemized by number of cigarettes in a package, purchased or received during the accounting period;

b. Packages, itemized by number of cigarettes in a package, of unstamped cigarettes on hand at the end of the period and are:

1. Damaged; or

2. Saleable;

c. Stamps on hand at the end of the period for all taxing jurisdictions;

d. Stamps purchased from all taxing jurisdictions for the period;

e. Unstamped cigarette packages returned to the manufacturer for credit; and

f. Non-taxable package sales to the New Hampshire veterans home under RSA 78:7-b;

(4) A statement, by a company/corporate officer, certifying:

“I certify the above information to be true and correct”;

(5) The accounts payable due New Hampshire as of the date of the period ending for purchases of stamps; and

(6) Dated signature, in ink.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1009.05 Form CD-15, Cigarette Stamp Order.

(a) Form CD-15, “Cigarette Stamp Order”, shall be filed in triplicate by New Hampshire licensed wholesalers to purchase tobacco tax stamps through the department by providing:

(1) The date;

(2) Their account number;

(3) The name and address of the licensed wholesaler;

(4) The quantity and denomination of each type of the stamps being ordered;

(5) Any discount applicable;

(6) An indication whether payment will be by cash or charged to their account; and

(7) The signature of the New Hampshire licensed wholesaler or authorized agent.

(b) Form CD-15, “Cigarette Stamp Order”, shall be accompanied by payment, made in accordance with Rev 1004.04.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1009.06 Form CD-18, Tobacco Tax Credit Bond. Form CD-18, “Tobacco Tax Credit Bond”, shall be completed and filed by wholesalers licensed in New Hampshire to establish a charge account with the department by providing:

(a) Name of the licensed wholesaler;

(b) Name of the surety company providing the bond;

(d) Term for which the bond has been issued;

(e) Signatures of the licensed wholesaler and the surety company; and

(f) Date the bond was issued.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1009.07 Form CD-92, Notice of Intent to Ship Return of Damaged or Obsolete Cigarettes to Manufacturer.

(a) A wholesaler shall complete and file Form CD-92, “Notice of Intent to Ship Return of Damaged or Obsolete Cigarettes to Manufacturer”, to notify the department’s collections division, at least 5 days prior to shipping, of the wholesaler’s intent to return damaged or obsolete packages of cigarettes to the manufacturer by providing:

(1) The name and address of the wholesaler;

(2) The date on which the form was prepared;

(3) The name of the manufacturer;

(4) The number of packages being returned categorized by tax value and the tax value of such returned packages;

(5) The total tax value of all packages returned: and

(6) The printed name of the person to contact at the wholesaler including his or her telephone and fax numbers and email address if applicable.

(b) Form CD-92, “Notice of Intent to Ship Return of Damaged or Obsolete Cigarettes to Manufacturer” shall be accompanied by forms provided by the manufacturer for:

(1) An affidavit describing the unsaleable of returned cigarettes; and

(2) Return of goods form.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1009.08 Form DP-31, Application for Tobacco License.

(a) Form DP-31, “Application for Tobacco License”, shall be completed and filed by the following to apply to the department for a tobacco license to sell cigarettes, smokeless tobacco products, or both by providing:

(1) An indication whether the license is new or a renewal;

(2) Trade name;

(3) Owner name;

(4) New Hampshire business address and, if different, mailing address;

(5) Business phone number;

(6) If a new owner, the name of the former owner and date of purchase;

(7) Type of organization;

(8) Federal tax identification number as provided by RSA 21-J:27-a;

(9) An indication of:

a. Manufacturer, as defined in RSA 78:1, III;

b. Wholesaler, as defined in RSA 78:1,V;

c. Sub-jobber, as defined in RSA 78:1, VII;

d. Vending machine operator, as defined in RSA 78:1,IX; and

e. Retailer, as defined in RSA 78:1, XI;

(10) The number of vending machines to be licensed, if applicable; and

(11) Dated signature, in ink.

(b) The taxpayer shall remit the statutory fee for the license, with Form DP-31, “Application for Tobacco Licnese”, when it is submitted.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1009.09 Form DP-151, Smokeless Tobacco Tax Return.

(a) Form DP-151, “Smokeless Tobacco Tax Return”, shall be completed and filed with the department by all licensed wholesalers complying with the filing requirements of RSA 78:12,II by the 15th day following the end of the reporting period:

(1) The tax period;

(2) Wholesaler’s name and address;

(3) Federal tax identification number;

(4) Filing status;

(5) An indication whether the return is:

a. Initial;

b. Amended; or

c. Final;

(6) The tobacco account number of the business;

(7) The total smokeless tobacco sales made by the business;

(8) The smokeless tobacco sales that are exempt from New Hampshire tax;

(9) The calculation of the tax due;

(10) The calculation of interest or penalties due under RSA 21-J, if applicable;

(11) A statement declaring:

“Under penalties of perjury, I declare that I have examined this return and to the best of my belief it is true correct and complete. If prepared by a person other than the taxpayer, this declaration is based on all information of which the preparer has knowledge.”; and

(12) Dated signature of:

a. Taxpayer; or

b. Preparer with title, preparer identification number and address.

(b) A tax payment shall accompany the return.

(c) A statement shall be attached to the amended Form DP-151 providing an explanation of the adjustments made to the original return.

(d) Form DP-151, “Smokeless Tobacco Tax Return”, shall be filed and all taxes due remitted on a monthly basis, unless the commissioner has authorized the wholesaler to file quarterly pursuant to Rev 1003.02.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

PART Rev 1010 APPLICATION OF PENALTIES

Rev 1010.01 Understatement of Taxpayer's Liability by Tax Preparer.

(a) For purposes of RSA 21-J:33-b,I, "substantial portion" means any instance where the efforts of the tax preparer have affected more than 25% of the licensee's tax liability.

(b) An individual or company providing more than typing, reproducing or other mechanical assistance shall be deemed to be a tax preparer when the individual or company uses computer software which makes determinations about the applicability of tax laws or the allowability of deductions or credits.

(1) The result of a tax preparer's willful neglect; or

(2) Intentional disregard of the statute or department rules unless the individual or company shall have adequately disclosed the tax treatment of an item on the return or in a statement attached to the front of the return as provided in Rev 1010.03.

(d) Affirmative defenses against an allegation of a tax preparer being willfully negligent, or intentionally disregarding a statute or rule, shall be:

(1) The tax preparer had substantial authority as provided in Rev 1010.03 for the tax treatment of the item; or

(2) The tax preparer exercised due care in an effort to apply the statute and rules to the information given to the preparer by the licensee unless the preparer knew or should have recognized that such information was incorrect or incomplete.

(e) The penalty provided in RSA 21-J:33-b, IV shall be applied when any part of an understatement of tax is the result of a preparer's willful attempt to understate the licensee's tax liability.

(f) A tax preparer shall be deemed to have willfully attempts to understate a tax liability of a licensee by:

(1) Disregarding or misstating information furnished by the licensee or other person in an attempt to wrongfully reduce the tax liability; or

(2) Not making inquiries of the licensee or other person when the information provided is incorrect or incomplete, and the preparer knows or should have known that the information was incorrect or incomplete.

(g) If, in an adjudicative proceeding or a judicial decision, it is established that there was no understatement of liability and if previously paid by the preparer, then the penalty imposed by RSA 21-J:33-b shall be abated and refunded.

(h) The refund of the penalty shall be made without any consideration of any period of limitation for the issuance of a refund.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1010.02 Aiding and Abetting an Understatement of Tax Liability.

(a) An individual or company providing more than typing, reproducing or other mechanical assistance shall be deemed to be a tax preparer, as defined in RSA 21-J:33-b, when the individual or company uses computer software which makes determinations about the applicability of tax laws or the allowability of deductions or credits.

(b) In accordance with RSA 21-J:33-c, the penalty shall be assessed against any person who aids, assists in, procures or advises in the preparation of any return or other document in connection with the tax on tobacco, RSA 78, or department rules if:

(1) The person knows that the information provided will be used in the preparation of any material document; and

(2) The person knows that if used, the information will result in an understatement of tax liability.

(c) The penalty shall not be assessed in instances where the licensee adequately disclosed the relevant facts regarding the tax treatment of the item in the manner provided in Rev 1010.03.

(d) If, in an adjudicative proceeding or a judicial decision, it is established that there was no understatement of liability and if previously paid by the preparer, then the penalty imposed by RSA 21-J:33-c shall be abated and refunded.

(e) The refund of the penalty shall be made without any consideration of any period of limitation for the issuance of a refund.

Source. #6662, eff 12-25-97; ss by #8526, eff 12-21-05

Rev 1010.03 Adequate Disclosure and Substantial Authority Requirements.

(a) For purposes of meeting the requirements of RSA 21-J:33-b and RSA 21-J:33-c, a licensee shall have adequately disclosed the tax treatment of an item on the return or in a statement attached to the front of the return if all of the following criteria are met:

(1) The statement contains a prominent caption identifying the statement as a disclosure of the tax treatment for the understatement of taxpayer's liability by tax preparer penalty provided in RSA 21-J:33-b and the penalty for aiding and abetting an understatement of tax liability provided in RSA 21-J:33-c;

(2) The item for which the disclosure is made is clearly identified;

(3) The dollar amount of the item is disclosed; and

(4) The statement contains those facts affecting the tax treatment of the item that reasonably will apprise the department of the nature of the potential controversy or a concise description of the legal issues presented by the facts in question.

(b) In determining whether a licensee has substantial authority, the department shall consider the following as being authoritative sources:

(1) The tax statutes on tobacco and any other New Hampshire statutes that have a bearing on the tax statutes;

(2) Rules issued by the department;

(3) Declaratory rulings requested by and issued to the licensee making the disclosure;

(4) Technical information releases issued by the department;

(5) Superior court and board of tax and land appeals decisions;

(6) Federal district court and first circuit court of appeals decisions;

(7) United States and New Hampshire supreme court decisions;

(8) Legislative committee reports specifying legislative intent; and

(9) Written advice from the department issued to the licensee about the tax treatment of the item in question.

(1) Opinions by tax professionals;

(2) Tax publication opinions or narrative statements; or

(3) Articles contained in any professional or tax periodicals.

(d) The existence of substantial authority for a particular item shall be determined as of the date the return containing the item was filed.

Source. #6662, eff 12-25-97; ss by #8526, 12-21-05

APPENDIX

RULE	STATUTE

Rev 1001.01 - Rev 1001.02	RSA 78:6
Rev 1001.03	RSA 78:6; RSA 78:1, III
Rev 1001.04- Rev 1001.05	RSA 78:6
Rev 1001.06	RSA 78:6; RSA 78:1,XI
Rev 1001.07 – Rev 1001.09	RSA 78:6
Rev 1001.10	RSA 78:6, RSA 78:1,V
Rev 1001.11- Rev 1001.12	RSA 78:6
Rev 1002.01	RSA 78:6 and RSA 78:7
Rev 1002.02	RSA 78:6
Rev 1003.01	RSA 78:6; RSA 21-J:14
Rev 1003.02 –Rev 1003.03	RSA 78:6
Rev 1003.04	RSA 78:6; RSA 78:9-a, RSA 78:10
Rev 1004.01 – Rev 1004.03.	RSA 78:6
Rev 1004.04	RSA 78:6; RSA 21-J:28

Rev 1005.01	RSA 78:6, RSA 541-C
Rev 1005.02 – Rev 1005.03	RSA 78:6
Rev 1006.01	RSA 78:6; RSA 21-J:31 & 29 & 28 & 33
Rev 1007.01—Rev 1007.03	RSA 78:6
Rev 1007.04	RSA 78:6; RSA 78:12-d,VII
Rev 1008.01 – Rev 1008.06	RSA 78:6; RSA 21-J:13
Rev 1008.07	RSA 78:6; RSA 21-J:13;RSA 78;14 and RSA 78:3

Part Rev 1009	RSA 78:6

Rev 1010.01	RSA 78:6, RSA 21-J:33-b
Rev 1010.02 – Rev 1010.03	RSA 78:6, RSA 21-J:33-b and c