cigarette tax stamps

EFFECTIVE 2019: CIGARETTE TAX STAMPS

South Carolina Department of Revenue
Tobacco Tax
Columbia, SC 29214-0138

Phone: 803-896-1970
Email: TobaccoTax@dor.sc.gov

Effective 2019: Cigarette Tax Stamps

Cigarette Tax stamps will be required as of January 1, 2019 in accordance with Act No. 145 of 2016. The SCDOR has published Regulation 117-1600 containing provisions concerning reporting requirements under Chapters 47 and 48 of Title 11 along with provisions regarding affixing tax stamps, purchasing tax stamps, features of tax stamps, exemptions and refunds, display, storage, transfer, and transport of cigarettes.

Workshops

Check out these workshops for help understanding what is changing and how it affects you:

Workshop Dates	Times	Location
November 26	10:00-11:30 a.m. (in-class & webinar)	Hughes Main Library 25 Heritage Green Pl. Greenville, SC 29601 or online
November 27	12:30-2:00 p.m. (in-class & webinar)	Mt. Pleasant Regional Library 1133 Mathis Ferry Rd. Mt. Pleasant, SC 29464 or online
November 29	9:00-10:30 a.m. (in-class & webinar)	SCDOR Office 300A Outlet Pointe Blvd. Columbia, SC 29210 or online
December 12	1:00-2:30 p.m. (in-class & webinar)	SCDOR Office 300A Outlet Pointe Blvd. Columbia, SC 29210 or online
January 8	9:00-10:30 a.m. (in-class & webinar)	SCDOR Office 300A Outlet Pointe Blvd. Columbia, SC 29210 or online

All workshops are available in-class or online. You will receive instructions for accessing the webinar once you've registered.

To register:

Email the following information to TaxpayerEducation@dor.sc.gov (preferred method):
- Class Date
- Registrant Name
- Business Name
- Business Address
- Daytime Phone Number
A confirmation of your registration will be sent via email.
or
Call our Taxpayer Education Phone Line- 803-898-5800

FAQ

The following questions and answers provide guidance regarding the implementation of the Cigarette Stamp Tax imposed by Code Section 12-21-735, which is effective January 1, 2019. The Department will address additional questions as they arise. Please note additional questions will be addressed as they arise and as the Department finalizes its processes and procedures for the implementation of the tax.

Liability for the Cigarette Stamp Tax

Credit for purchase of the Cigarette Tax stamping machine

Is there a credit or reimbursement for the purchase of a stamping machine?

How much will the credit be?

Who qualifies for the stamping machine credit?

What is the process for obtaining approval for the stamping machine credit and determining the amount of the credit?

How long does it take to receive approval for the stamping machine tax credit?

Is there a time limit on qualifying for the stamping maching credit?

What equipment is considered part of the stamping machine and subject to the credit?

If the stamping equipment is leased instead of purchased, is the stamping machine credit still available?

If the costs for the stamping machine and related equipment exceed $175,000, may the distributor recover any costs over $175,000?

If I have multiple licensed locations or warehouses, can I qualify for more than one credit?

Are there any restrictions on where a distributor may purchase a stamping machine?

When can I begin taking the stamping machine credit?

Purchase of stamps

Can tax stamps be purchased prior to January 1, 2019?

Where can I purchase tax stamps?

What is the process for purchasing tax stamps?

Will tax stamps be available for pickup at the Department of Revenue?

Can I purchase tax stamps on credit?

How will the process of purchasing tax stamps on credit work?

Are there any requirements or restrictions for purchasing stamps on credit?

If a distributor intends to purchase stamps using the 30-day credit plan, will the Department still accept financial statements in lieu of cash or a surety bond as done in the past?

What if the distributor cannot get a bond?

May a distributor purchase rolls of stamps in increments smaller than 30,000?

Is there a limit on the number of stamps that may be purchased at any one time?

Will a distributor receive any compensation for affixing and accounting for Cigarette Tax stamps?

Stamping of cigarettes

Separate stock

Exemptions

Refunds

Under what circumstances may a distributor request a refund for stamped cigarettes?

Is a refund available for lost or stolen Cigarette Tax stamps?

What is a bad debt for purposes of obtaining a refund?

What will be the process for obtaining a refund?

What documentation is required to obtain a refund?

Sales of unstamped cigarettes between distributors

Reporting requirements

Does a distributor still need to file a tax return form with respect to cigarettes?

Since the taxes will be remitted through the purchase of Cigarette Tax stamps, a distributor will no longer remit taxes through the filing of a tax return. However, cigarette distributors must file a report for informational purposes with detailed information regarding purchases and sales of all cigarette brands for the month, including the reporting of non-participating manufacturer’s cigarettes. This informational report is required by state statutes and regulation and is needed by the Department to file the quarterly Non-Participating Manufacturer’s (NPM) report with the South Carolina Attorney General’s Office. This informational report (Form L-920, Cigarette Tax Report) must be filed monthly and is due on the 20th day of the month following the month in which the sales were made.

Therefore, distributors will file their final tax return with respect to cigarettes for all sales made in December 2018. This December 2018 tax return will be due no later than Monday, January 21, 2019.

The new informational report will apply to all cigarette sales and all stamp purchases made on or after January 1, 2019. However, cigarette stamps purchased in December 2018 will be reported as a purchase on the first informational report for January 2019. The first informational report must be filed no later than Wednesday, February 20, 2019. A new, separate tobacco products return will be required for reporting and remitting the tax with respect to sales of other tobacco products (e.g., cigars, smoking tobacco, etc.) made on or after January 1, 2019.

Note: Under the South Carolina Cigarette Tax law, Cigarette Taxes are paid through a reporting method until the end of 2018. As such, the purpose of this one-time requirement to report Cigarette Tax stamps purchased in December on the January 2019 informational report is to establish a smooth and accurate transition between the reporting method used through December 2018 and the new stamping method beginning January 1, 2019.

Other Tobacco Products (OTP)

Regulations

Other

For SC-licensed distributors reporting on the receipts method, their cigarette inventory is all Excise Taxes paid. How will those distributors obtain stamps to show taxes have been paid on their inventory as of December 31, 2018?

Will South Carolina retailers be allowed a grace period for selling tax-paid, but unstamped, cigarettes?

Will South Carolina distributors who had tax-paid cigarettes prior to January 1, 2019 be allowed a grace period for selling their tax-paid, but unstamped, cigarettes?

These are general questions only prepared to assist SC licensed tobacco distributors in complying with the South Carolina Tobacco Code and the new Cigarette Stamping requirements which begin January 1, 2019. For any questions regarding individual circumstances and compliance with the Code, please contact the South Carolina Department of Revenue’s Miscellaneous Tobacco Tax Office Section.