CHAPTER 214
CIGARETTE TAXES

Table of Contents

Sec. 12-285. Definitions.
Sec. 12-286. Dealers and distributors to be licensed. Regulations re licensing vending machines. Refusal to issue license. Penalties.
Sec. 12-288. Distributor's license.
Sec. 12-296. Imposition of tax.
Sec. 12-304. Sale of unstamped cigarettes prohibited. Penalty for violation.
Sec. 12-316. Imposition of tax.
Sec. 12-326a. Definitions. Presumptions of costs of doing business.

PART I
TAX ON CIGARETTES HELD FOR SALE

      Sec. 12-285. Definitions. (a) When used in this chapter, unless the context otherwise requires:

      (1) "Person" means any individual, firm, fiduciary, partnership, corporation, limited liability company, trust or association, however formed;

      (2) "Distributor" means (A) any person in this state engaged in the business of manufacturing cigarettes; (B) any person, other than a buying pool, as defined herein, who purchases cigarettes at wholesale from manufacturers or other distributors for sale to licensed dealers, and who maintains an established place of business, including a location used exclusively for such business, which has facilities in which a substantial stock of cigarettes and related merchandise for resale can be kept at all times, and who sells at least seventy-five per cent of such cigarettes to retailers who, at no time, shall own any interest in the business of the distributor as a partner, stockholder or trustee; (C) any person operating five or more retail stores in this state for the sale of cigarettes, or franchising five or more retail stores in this state for the sale of cigarettes who shares in the gross profits generated by such stores and who purchases cigarettes at wholesale for sale to dealers but sells such cigarettes exclusively to retail stores such person is operating or franchising; (D) any person operating and servicing twenty-five or more cigarette vending machines in this state who buys such cigarettes at wholesale and sells them exclusively in such vending machines. If a person qualified as a distributor in accordance with this subparagraph, in addition sells cigarettes other than in vending machines, such person shall be required to be qualified as a distributor in accordance with subparagraph (B) of this subdivision and have an additional distributor's license for purposes of such other sales; (E) any person who imports into this state unstamped cigarettes, at least seventy-five per cent of which are to be sold to others for resale; and (F) any person operating storage facilities for unstamped cigarettes in this state;

      (3) "Cigarette vending machine" means a machine used for the purpose of automatically merchandising packaged cigarettes through the insertion of the proper amount of coins therein by the purchaser, but does not mean a restricted cigarette vending machine;

      (4) "Restricted cigarette vending machine" means a machine used for the dispensing of packaged cigarettes which automatically deactivates after each individual sale, cannot be left operable after a sale and requires, prior to each individual sale, a face-to-face interaction or display of identification between an employee of the area, facility or business where such machine is located and the purchaser;

      (5) "Dealer" means any person other than a distributor who is engaged in this state in the business of selling cigarettes, including any person operating and servicing fewer than twenty-five cigarette vending machines, and any person who is engaged in the business of selling taxed tobacco products, as defined in section 12-330a, at retail;

      (6) "Licensed dealer" means a dealer licensed under the provisions of this chapter;

      (7) "Stamp" means any stamp authorized to be used under this chapter by the Commissioner of Revenue Services and includes heat-applied decals;

      (8) "Sale" or "sell" includes or applies to gifts, exchanges and barter; and

      (9) "Buying pool" means and includes any combination, corporation, association, affiliation or group of retail dealers operating jointly in the purchase, sale, exchange or barter of cigarettes, the profits from which accrue directly or indirectly to such retail dealers, provided any person holding a distributor's license issued prior to June 29, 1951, shall be deemed to be a distributor within the terms of this section.

      (b) For the purposes of part I and part II only of this chapter:

      (1) "Cigarette" means and includes any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and irrespective of whether the tobacco is flavored, adulterated or mixed with any other ingredient, where such roll has a wrapper or cover made of paper or any other material, except where such wrapper is wholly or in the greater part made of tobacco and such roll weighs over three pounds per thousand, provided, if any roll for smoking has a wrapper made of homogenized tobacco or natural leaf tobacco, and the roll is a cigarette size so that it weighs three pounds or less per thousand, such roll is a cigarette and subject to the tax imposed by part I and part II of this chapter; and

      (2) "Unstamped cigarette" means any package of cigarettes to which the proper amount of Connecticut cigarette tax stamps have not been affixed.

      (1949 Rev., S. 1972; 1949, 1951, S. 1122d; February, 1965, P.A. 627, S. 1; 1967, P.A. 788, S. 1; 1969, P.A. 393, S. 1; P.A. 75-432; P.A. 84-525, S. 1, 8; P.A. 85-600, S. 1, 4; P.A. 95-79, S. 30, 189; P.A. 96-240, S. 1, 10; June Sp. Sess. P.A. 01-6, S. 27, 85; P.A. 03-225, S. 3; P.A. 06-194, S. 10; P.A. 11-37, S. 1.)

      History: 1965 act defined "cigarette" for purposes of parts I and II; 1967 act rephrased Subdiv. (2) of definition of "distributor" to refer to place of business which has storage facilities for cigarettes rather than which has on hand at all times a substantial stock of cigarettes, added Subdiv. (5) re importation of unstamped cigarettes and defined "unstamped cigarettes"; 1969 act deleted references to owning vending machines, referring rather to operating and servicing such machines in definitions of "distributor" and "dealer"; P.A. 75-432 added Subdiv. (6) in definition of "distributor" re storage facilities of unstamped cigarettes; P.A. 84-525 amended definition of "distributor" to provide: In Subdiv. (2), that cigarettes are to be sold to licensed dealers and that the distributor shall maintain a place of business used exclusively for the business; in Subdiv. (3), that a distributor may sell cigarettes only to stores operated by him; and in Subdiv. (4), that a person holding a vending machine distributor's license must hold another license if such person sells cigarettes other than in vending machines; P.A. 85-600 redefined "distributor" to establish a new category of distributor, for purposes of licensing requirements, comprised of any person operating five or more retail stores in Connecticut for sale of cigarettes who purchases at wholesale for sale to dealers but sells such cigarettes exclusively to retail stores he is operating; P.A. 95-79 redefined "person" to include a limited liability company, effective May 31, 1995; P.A. 96-240 added the definition of "restricted cigarette vending machine" and excluded such machines from the definition of "cigarette vending machines", effective June 6, 1996; June Sp. Sess. P.A. 01-6 divided section into Subsecs. (a) and (b), deleted provision re classification as a vending machine dealer in the definition of "dealer", redefined "stamp" to provide for authorization of Commissioner of Revenue Services, delete provision re impressions made by metering machines and include heat-applied decals, included roll-your-own tobacco in the definition of "cigarette", added a definition of "roll-your-own tobacco" and made technical and conforming changes, effective January 1, 2002; P.A. 03-225 amended Subsec. (b) to delete Subpara. (B) re roll-your-own tobacco and make a technical change in Subdiv. (1) and to delete Subdiv. (3) re definition of "roll-your-own tobacco", effective January 1, 2002; P.A. 06-194 amended Subsec. (a)(5) by adding any person engaged in the business of selling taxed tobacco products at retail to definition of "dealer", effective July 1, 2006; P.A. 11-37 amended Subsec. (a)(2) to redefine "distributor" by adding provision re any person franchising 5 or more retail stores who shares in the gross profits generated by such stores, effective July 1, 2011.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 12-286. Dealers and distributors to be licensed. Regulations re licensing vending machines. Refusal to issue license. Penalties. (a)(1) The commissioner shall, after May 25, 1994, require for an initial application for a distributor's license, in addition to such other information deemed to be necessary, the filing of three affidavits from three recognized manufacturers of cigarettes stating such manufacturers' intent to supply the distributor if the applicant is granted a license. A chain store shall be exempt from filing such affidavits. Any pending application on May 25, 1994, and any person purchasing the business of a licensed distributor shall be exempt from filing such affidavits. For purposes of this subsection, "chain store" means the operator or franchisor of five or more retail establishments.

      (2) The commissioner may make public a list of recognized manufacturers of cigarettes.

      (b) A separate license shall be required for each class of business if the applicant is engaged in business both as a distributor and dealer. The commissioner shall prescribe the form of application for a distributor's license and for a dealer's license. Each license so issued shall be conspicuously displayed on the premises covered by the license.

      (c) The commissioner shall make regulations not inconsistent with the law for the licensing of vending machines.

      (d) The commissioner may, in the commissioner's discretion, refuse to issue a license if there is reasonable ground to believe (1) that the applicant has wilfully made any false statement of substance with respect to such application for license, (2) that the applicant has neglected to pay any taxes due to this state, or (3) that the applicant has been convicted of violating any of the cigarette or other tobacco products tax laws of this or any other state or the cigarette tax laws of the United States or has such a criminal record that the commissioner reasonably believes that such applicant is not a suitable person to be issued a license, provided no refusal shall be rendered under this subdivision except in accordance with the provisions of sections 46a-80 and 46a-81.

      (e) (1) Any person who knowingly sells, offers for sale or possesses with intent to sell any cigarettes, without a license as provided in this chapter, shall be fined not more than five hundred dollars or imprisoned for not more than three months, or both, for each offense. Each day of such unauthorized operation may be deemed a separate offense. The provisions of this subdivision shall not apply to any person whose dealer's license has expired, provided the period of operation without such license is not more than ninety days after the date of expiration.

      (2) Any person who knowingly sells at retail, offers for sale at retail or possesses with intent to sell at retail any taxed tobacco products, as defined in section 12-330a, without a dealer's license as provided in this chapter, shall be fined not more than five hundred dollars or imprisoned for not more than three months, or both, for each offense. Each day of such unauthorized operation may be deemed a separate offense. The provisions of this subdivision shall not apply to any person whose dealer's license has expired, provided the period of operation without such license is not more than ninety days from the date of expiration.

      (3) Any person whose dealer's license has expired and who knowingly sells at retail, offers for sale at retail or possesses with intent to sell at retail any cigarettes or taxed tobacco products, as defined in section 12-330a, where such person's period of operation without such license is not more than ninety days from the date of expiration of such license, shall have committed an infraction and shall be fined ninety dollars.

      (1949 Rev., S. 1973; 1961, P.A. 517, S. 12; 1967, P.A. 788, S. 2; P.A. 77-614, S. 139, 610; P.A. 84-525, S. 2, 8; P.A. 85-372, S. 2, 4; 85-600, S. 2, 4; P.A. 88-314, S. 12, 54; P.A. 93-15, S. 1, 9; 93-74, S. 12, 67; P.A. 94-80, S. 1, 3; P.A. 00-174, S. 29, 83; P.A. 05-96, S. 1; P.A. 06-194, S. 11; P.A. 11-37, S. 2; 11-61, S. 62.)

      History: 1961 act increased dealer's license fee; 1967 act allowed each day of unauthorized operation to be considered a separate offense, allowed commissioner to withhold license for applicants who withhold information or submit false or misleading information etc. and deleted requirement that vending machine operators put name, address and license number on each machine; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 84-525 increased distributor's license fee from $150 to $1,000 and the dealer's license fee from $10 to $25; P.A. 85-372 expanded the grounds for refusal of a license by the commissioner, which were previously limited to withholding information or submitting false or misleading information; P.A. 85-600 provided for exceptions to the license fee requirement for distributors under which a distributor who sells exclusively to retail stores he is operating pays a lower fee than other distributors as follows: $250 annually if he operates less than fifteen retail stores, $500 annually if he operates fifteen or more retail stores but less than twenty-five and $1,000, if he operates twenty-five or more retail stores; P.A. 88-314 increased the fine and added the provision concerning imprisonment applicable to any person who, without a license as required in this section, knowingly sells or possesses cigarettes with intent to sell, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; P.A. 93-15 deleted license fee provisions, deleted provision requiring dealer or distributor to apply for license before doing business, deleted reference to vending machine license applications and made technical changes, effective July 1, 1993; P.A. 93-74 provided that commissioner shall require affidavits from three recognized domestic manufacturers; P.A. 94-80 exempted chain stores and persons purchasing the business of a licensed distributor from the required filing of affidavits, eliminated the requirement that a manufacturer supplying an affidavit be a domestic manufacturer and defined the term "chain store" for purposes of section, effective May 25, 1994; P.A. 00-174 divided existing provisions into Subsecs. (a) to (e), added Subsec. (a)(2) allowing information about manufacturers to be released by the commissioner and made technical changes for purposes of organization and gender neutrality, effective July 1, 2000; P.A. 05-96 amended Subsec. (a)(1) to remove reference to franchisor within the definition of "chain store", effective July 1, 2005; P.A. 06-194 amended Subsec. (d)(3) by adding violation of other tobacco products tax laws as grounds for refusal to issue license, and amended Subsec. (e) by designating existing provisions as Subdiv. (1) and adding Subdiv. (2) re penalty for sale, offer or possession of taxed tobacco products without a dealer's license, effective July 1, 2006; P.A. 11-37 amended Subsec. (a)(1) to redefine "chain store" by adding "or franchisor" and deleting "with common ownership and control", effective July 1, 2011; P.A. 11-61 amended Subsec. (e)(1) and (2) by excepting from the penalties therein any person whose dealer's license expired, added reference to Sec. 12-330a in Subsec. (e)(2) and added Subsec. (e)(3) re penalty for selling by person whose dealer's license expired, effective July 1, 2011.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 12-288. Distributor's license. Each person engaging in, or intending to engage in, the business of selling cigarettes in this state as a distributor shall secure a license from the Commissioner of Revenue Services before engaging or continuing to engage in such business. Subject to the provisions of section 12-286, such license shall be renewable annually. The annual fee for a distributor's license shall be one thousand two hundred fifty dollars, provided in the case of a distributor who sells cigarettes as a distributor exclusively to retail stores which such distributor is operating, the fee for such distributor's license shall be: (1) Three hundred fifteen dollars annually if such distributor operates or franchises less than fifteen such retail stores; (2) six hundred twenty-five dollars annually if such distributor operates or franchises fifteen or more but less than twenty-five such retail stores; and (3) one thousand two hundred fifty dollars annually if such distributor operates or franchises twenty-five or more such retail stores. Such license shall be valid for a period beginning with the date of license to the thirtieth day of September next succeeding the date of license unless sooner revoked by the commissioner as provided in section 12-295 or unless the person to whom such license was issued discontinues business, in either of which cases the holder of the license shall immediately return it to the Commissioner of Revenue Services.

      (1949 Rev., S. 1975; P.A. 77-614, S. 139, 610; P.A. 93-15, S. 3, 9; June Sp. Sess. P.A. 09-3, S. 155; Sept. Sp. Sess. P.A. 09-8, S. 18; P.A. 11-37, S. 3.)

      History: P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 93-15 added provisions re fee for and requirements of distributor's license, effective July 1, 1993; June Sp. Sess. P.A. 09-3 increased distributor's license fees applicable to distributors who sell exclusively to retail stores which they are operating; Sept. Sp. Sess. P.A. 09-8 increased fee for distributor's license from $1,000 to $1,250, effective October 5, 2009, and applicable to the renewal of a license that expires on or after September 30, 2009; P.A. 11-37 added references to franchises, effective July 1, 2011.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 12-296. Imposition of tax. A tax is imposed on all cigarettes held in this state by any person for sale, said tax to be at the rate of one hundred seventy mills for each cigarette and the payment thereof shall be for the account of the purchaser or consumer of such cigarettes and shall be evidenced by the affixing of stamps to the packages containing the cigarettes as provided in this chapter.

      (1949 Rev., S. 1979; 1955, S. 1128d; November, 1955, S. N136; 1957, P.A. 582, S. 1; 1961, P.A. 578, S. 12; 604, S. 6; 1963, P.A. 651, S. 3; February, 1965, P.A. 326, S. 1; 1969, P.A. 608, S. 1; June, 1969, P.A. 1, S. 44; June, 1971, P.A. 5, S. 114; 8, S. 25; June Sp. Sess. P.A. 83-1, S. 2, 15; P.A. 89-16, S. 4, 31; June Sp. Sess. P.A. 91-3, S. 131, 168; P.A. 93-74, S. 13, 14, 67; P.A. 02-1, S. 1; P.A. 03-2, S. 29; June Sp. Sess. P.A. 07-1, S. 124; June Sp. Sess. P.A. 09-3, S. 104; P.A. 11-6, S. 80.)

      History: 1961 acts increased rate, decreased allocation to soldiers, sailors and marines fund from 1/6 to 1/10 of proceeds, and changed fund's upper limit to a market value of $30,000,000; 1963 act further increased rate and deleted provision for allocating any of the proceeds to said fund; 1965 act increased tax rate from 3 to 4 mills per cigarette; 1969 acts temporarily increased rate to 7.25 mills per cigarette from July 1, 1969, to June 30, 1971, and further increased temporary rate to 8 mills; 1971 acts extended closing date for higher rate to June 30, 1973, and then permanently increased rate to 10.5; June Sp. Sess. P.A. 83-1 increased the rate of tax to 13 mills for each cigarette; P.A. 89-16 increased the rate of tax to 20 mills for each cigarette, effective March 23, 1989, and applicable to cigarettes held for sale on or after April 1, 1989; June Sp. Sess. P.A. 91-3 increased the rate of tax to 22.5 mills for each cigarette, effective August 22, 1991, and applicable to cigarettes held for sale on or after October 1, 1991; P.A. 93-74, S. 13, increased the rate of tax to 23.5 mills for each cigarette, effective May 19, 1993, and applicable to sales of cigarettes occurring on and after July 1, 1993, and P.A. 93-74, S. 14, increased the rate of tax to 25 mills for each cigarette, effective May 19, 1993, and applicable to sales of cigarettes occurring on and after July 1, 1994; P.A. 02-1 increased the rate of tax to 55.5 mills for each cigarette, effective April 3, 2002; P.A. 03-2 changed rate to 75.5 mills, effective February 28, 2003, and applicable to sales occurring on or after March 15, 2003; June Sp. Sess. P.A. 07-1 increased rate of tax from 75.5 mills to 100 mills for each cigarette, effective July 1, 2007, and applicable to sales occurring on or after that date; June Sp. Sess. P.A. 09-3 increased rate of tax from 100 mills to 150 mills for each cigarette, effective September 9, 2009, and applicable to sales occurring on or after October 1, 2009; P.A. 11-6 increased rate of tax from 150 mills to 170 mills for each cigarette, effective July 1, 2011, and applicable to sales occurring on or after that date.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 12-304. Sale of unstamped cigarettes prohibited. Penalty for violation. (a)(1) No distributor shall sell, and no other person shall sell, offer for sale, display for sale or possess with intent to sell, any cigarettes (A) which do not bear stamps evidencing the payment of the tax imposed by this chapter, or (B) the stamping of which is prohibited by subsection (b) of section 12-302 or subsection (b) of section 12-303, provided a licensed dealer may keep on hand, at the location for which such dealer's license is issued, unstamped cigarettes, other than cigarettes, the stamping of which is prohibited by subsection (b) of section 12-303, for a period not exceeding twenty-four hours. Any unstamped cigarettes in the possession of a dealer shall be presumed to have been held by such dealer for more than twenty-four hours unless proof is shown to the contrary.

      (2) Except as provided in subdivision (3) of this subsection, any person who knowingly violates any provision of subdivision (1) of this subsection shall be fined not more than one thousand dollars or imprisoned not more than one year or both.

      (3) Any licensed dealer who knowingly violates any provision of subdivision (1) of this subsection shall have committed an infraction and shall be fined ninety dollars, provided (A) the quantity of unstamped cigarettes in the possession of such dealer does not exceed six hundred cigarettes, and (B) it is such dealer's first violation of the provisions of this subsection.

      (b) (1) Any person, whether or not previously convicted of a violation of any provision of this section, who possesses, transports for sale, sells or offers for sale twenty thousand or more cigarettes, (A) subject to the tax imposed by this chapter in any unstamped or unlawfully packaged stamped packages, or (B) the stamping of which is prohibited by subsection (b) of section 12-302 or subsection (b) of section 12-303, and (2) any person, whether or not previously convicted of violation of any provision of this section, who wilfully attempts to evade the taxes imposed by this chapter or the payment thereof on twenty thousand or more cigarettes, shall be fined not more than five thousand dollars or imprisoned not less than one year nor more than five years or both.

      (1949 Rev., S. 1986; 1967, P.A. 788, S. 8; P.A. 75-275, S. 1, 2; P.A. 88-314, S. 16, 54; P.A. 99-109, S. 3, 8; P.A. 11-61, S. 63.)

      History: 1967 act imposed minimum fine of $100 for first offense; P.A. 75-275 increased fines for first offense to minimum of $250 and maximum of $1,000 (up from $500) and for subsequent offenses increased minimum fine from $200 to $500 and maximum fine from $2,000 fine to fine and/or one year's imprisonment and added Subsec. (b) re offenses involving 20,000 or more cigarettes; P.A. 88-314 amended the penalty provision for violation of any requirement of this section and added the provision that the violation must occur with knowledge, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; P.A. 99-109 amended Subsecs. (a) and (b) to add provisions re cigarettes the stamping of which is prohibited by Sec. 12-302 or 12-303 and to make technical changes, effective July 1, 1999; P.A. 11-61 amended Subsec. (a) by designating existing provisions re sale of unstamped cigarettes as Subdiv. (1) and penalty for violation thereof as Subdiv. (2), adding Subdiv. (3) re penalty for licensed dealer's first violation that does not involve more than 600 cigarettes, and making technical changes, effective July 1, 2011.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART II
TAX ON USE OR STORAGE OF UNSTAMPED CIGARETTES

      Sec. 12-316. Imposition of tax. A tax is hereby imposed at the rate of one hundred seventy mills for each cigarette upon the storage or use within this state of any unstamped cigarettes in the possession of any person other than a licensed distributor or dealer, or a carrier for transit from without this state to a licensed distributor or dealer within this state. Any person, including distributors, dealers, carriers, warehousemen and consumers, last having possession of unstamped cigarettes in this state shall be liable for the tax on such cigarettes if such cigarettes are unaccounted for in transit, storage or otherwise, and in such event a presumption shall exist for the purpose of taxation that such cigarettes were used and consumed in Connecticut.

      (1949 Rev., S. 1998; November, 1955, S. N141; 1961, P.A. 578, S. 13; 604, S. 8; 1963, P.A. 651, S. 5; February, 1965, P.A. 326, S. 3; 1967, P.A. 788, S. 14; 1969, P.A. 608, S. 3; June, 1969, P.A. 1, S. 46; June, 1971, P.A. 5, S. 116; 8, S. 27; June Sp. Sess. P.A. 83-1, S. 3, 15; P.A. 89-16, S. 5, 31; June Sp. Sess. P.A. 91-3, S. 132, 168; P.A. 93-74, S. 15, 16, 67; P.A. 02-1, S. 2; P.A. 03-2, S. 30; June Sp. Sess. P.A. 07-1, S. 125; June Sp. Sess. P.A. 09-3, S. 105; P.A. 11-6, S. 81.)

      History: 1961 acts increased tax rate, reduced fraction of proceeds to be allocated to soldiers, sailors and marines fund, and reduced maximum limit on fund; 1963 act increased tax rate and deleted provision for allocating any fraction of proceeds to said fund; 1965 act increased tax rate from 3 to 4 mills; 1967 act made persons last having possession of unstamped cigarettes in state liable for tax if cigarettes unaccounted for; 1969 acts temporarily raised tax rate to 7.25 mills for period between July 1, 1969, and June 30, 1971, and further increased temporary rate to 8 mills; 1971 acts extended closing date for temporary increase to June 30, 1973, and later increased rate to 10.5 mills permanently; June Sp. Sess. P.A. 83-1 increased the rate of tax to 13 mills for each cigarette; P.A. 89-16 increased the rate of tax to 20 mills for each cigarette, effective March 23, 1989, and applicable to cigarettes held for sale on or after April 1, 1989; June Sp. Sess. P.A. 91-3 increased the rate of tax to 22.5 mills for each cigarette, effective August 22, 1991, and applicable to cigarettes held for sale on or after October 1, 1991; P.A. 93-74, S. 15, increased the rate of tax to 23.5 mills for each cigarette, effective May 19, 1993, and applicable to sales of cigarettes occurring on and after July 1, 1993, and P.A. 93-74, S. 16, increased the rate of tax to 25 mills for each cigarette, effective May 19, 1993, and applicable to sales of cigarettes occurring on and after July 1, 1994; P.A. 02-1 increased the rate of tax to 55.5 mills for each cigarette, effective April 3, 2002; P.A. 03-2 changed rate to 75.5 mills, effective February 28, 2003, and applicable to sales occurring on or after March 15, 2003; June Sp. Sess. P.A. 07-1 increased rate of tax from 75.5 mills to 100 mills for each cigarette, effective July 1, 2007, and applicable to the storage or use of unstamped cigarettes occurring on or after that date; June Sp. Sess. P.A. 09-3 increased rate of tax from 100 mills to 150 mills for each cigarette, effective September 9, 2009, and applicable to sales occurring on or after October 1, 2009; P.A. 11-6 increased rate of tax from 150 mills to 170 mills for each cigarette, effective July 1, 2011, and applicable to sales occurring on or after that date.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART III
REGULATION OF SALE OF CIGARETTES

      Sec. 12-326a. Definitions. Presumptions of costs of doing business. (a) As used in sections 12-326a to 12-326h, inclusive, (1) "stamping agent" means a licensed distributor other than a buying pool, who purchases cigarettes at wholesale from manufacturers or other distributors for sale to licensed dealers and who maintains an established place of business, including a location used exclusively for such business, which has facilities in which a substantial stock of cigarettes and related merchandise for resale can be kept at all times, and who sells at least seventy-five per cent of such cigarettes to retailers who, at no time, shall own any interest in the business of the distributor as a partner, stockholder or trustee; (2) "subjobber" means a licensed distributor who purchases stamped cigarettes at wholesale for sale to licensed dealers who, at no time, shall own any interest in the business of the distributor as a partner, stockholder or trustee; (3) "chain store" means a licensed distributor (A) operating five or more retail stores with common ownership and control in this state for the sale of cigarettes, or franchising five or more retail stores in this state for the sale of cigarettes who shares in the gross profits generated by such stores and who purchases cigarettes at wholesale either from another distributor or direct from the manufacturer for sale to dealers but sells such cigarettes exclusively in or to retail stores such person is operating or franchising, or (B) operating and servicing twenty-five or more cigarette vending machines in this state who buys such cigarettes at wholesale and sells them exclusively in such vending machines; (4) "cost" means the basic cost of cigarettes plus the cost of doing business; (5) "basic cost of cigarettes" means (A) the lower of (i) the invoice cost of the cigarettes to the distributor or dealer, as the case may be, or (ii) the replacement cost in the quantity last purchased, plus (B) the full face value of any stamps which may be required by this chapter, if not already included in the invoice cost, minus (C) all trade discounts, if any, other than cash discounts; (6) "cost of doing business" means the costs, as computed for federal income tax purposes, that are related to the sale of cigarettes, including but not limited to labor costs, including salaries of executives and officers, rent, depreciation, selling costs, maintenance of equipment, delivery costs, interest, licenses, taxes, insurance, advertising, preopening expenses and any central and regional administrative expenses, expressed as a percentage of the basic cost of cigarettes and applied thereto. In applying such percentage to the basic cost of cigarettes, any fractional part of a cent equal to one-tenth or more of one cent per carton of ten packages of cigarettes shall be rounded to the next higher cent.

      (b) In the absence of the filing with the Commissioner of Revenue Services of satisfactory proof of a lesser or higher cost of doing business, such cost shall be presumed to be (1) in the case of a stamping agent who is selling cigarettes to subjobbers and chain stores, (A) seven-eighths of one per cent of the basic cost of cigarettes to such stamping agent plus (B) the cost of cartage to such subjobbers and chain stores, if performed or paid for by such stamping agent, which, absent satisfactory proof to the contrary shall be presumed to be three-fourths of one per cent of the basic cost of cigarettes to such stamping agent; or (2) in the case of a stamping agent who is selling cigarettes to dealers, (A) five and three-fourths per cent of the basic cost of cigarettes to such stamping agent plus (B) the cost of cartage to such dealers, if performed or paid for by such stamping agent, which, absent satisfactory proof to the contrary shall be presumed to be three-fourths of one per cent of the basic cost of cigarettes to such stamping agent; (3) in the case of a subjobber who is selling cigarettes to dealers, (A) four and seven-eighths per cent of the basic cost of cigarettes to the stamping agent plus (B) the cost of cartage to such dealers, if performed or paid for by such subjobber, which, absent satisfactory proof to the contrary shall be presumed to be three-fourths of one per cent of the basic cost of cigarettes to the stamping agent; (4) in the case of a dealer, eight per cent of the sum of (A) the basic cost of cigarettes to the stamping agent plus (B) the cost of doing business by the stamping agent with respect to cigarettes sold to dealers; and (5) in the case of sales at retail by a stamping agent, subjobber or chain store, the cost to the stamping agent, subjobber or chain store, as the case may be, shall be the same as the cost to the dealer.

      (P.A. 90-293, S. 1; P.A. 05-96, S. 2; P.A. 11-37, S. 4.)

      History: P.A. 05-96 amended Subsec. (a)(3) to remove franchising from the definition of "chain store" and to include requirement of common ownership and control within definition, effective July 1, 2005; P.A. 11-37 amended Subsec. (a)(3) by redefining "chain store" to include licensed distributors franchising 5 or more retail stores who share in gross profits generated by such stores, effective July 1, 2011.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)