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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY HUGHES, COSTA, FERLO AND LEACH, JUNE 11, 2009 |
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| REFERRED TO FINANCE, JUNE 11, 2009 |
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| AN ACT |
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1 | Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An |
2 | act relating to tax reform and State taxation by codifying |
3 | and enumerating certain subjects of taxation and imposing |
4 | taxes thereon; providing procedures for the payment, |
5 | collection, administration and enforcement thereof; providing |
6 | for tax credits in certain cases; conferring powers and |
7 | imposing duties upon the Department of Revenue, certain |
8 | employers, fiduciaries, individuals, persons, corporations |
9 | and other entities; prescribing crimes, offenses and |
10 | penalties," adding provisions relating to the taxation of |
11 | tobacco products; and imposing penalties. |
12 | The General Assembly of the Commonwealth of Pennsylvania |
13 | hereby enacts as follows: |
14 | Section 1. The act of March 4, 1971 (P.L.6, No.2), known as |
15 | the Tax Reform Code of 1971, is amended by adding an article to |
16 | read: |
17 | ARTICLE XII-A |
18 | TOBACCO PRODUCTS TAX |
19 | Section 1201-A. Definitions. |
20 | The following words and phrases when used in this article |
21 | shall have the meanings given to them in this section unless the |
22 | context clearly indicates otherwise: |
23 | "Cigar." Any roll of tobacco wrapped in tobacco. |
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1 | "Cigarette." Includes any roll for smoking made wholly or in |
2 | part of tobacco, irrespective of size or shape, and whether or |
3 | not such tobacco is flavored, adulterated or mixed with any |
4 | other ingredient, the wrapper or cover of which is made of paper |
5 | or any other substance or material, excepting tobacco, and shall |
6 | not include cigars or roll your own tobacco. |
7 | "Cigarillo." A short, narrow cigar, wrapped in whole-leaf |
8 | tobacco. Filtered cigarillos are sometimes called little cigars. |
9 | "Consumer." An individual who purchases tobacco products for |
10 | personal use and not for resale. |
11 | "Contraband." Any tobacco product for which the tax imposed |
12 | by this article has not been paid. |
13 | "Dealer." A tobacco products wholesaler or retailer. Nothing |
14 | in this article shall preclude any person from being a tobacco |
15 | products wholesaler or retailer, provided the person meets the |
16 | requirements for a license in each category of dealer. |
17 | "Department." The Department of Revenue of the Commonwealth. |
18 | "Manufacturer." A person that produces tobacco products or |
19 | who first causes tobacco products to be brought into this |
20 | Commonwealth. |
21 | "Person." An individual, unincorporated association, |
22 | company, corporation, joint stock company, group, agency, |
23 | syndicate, trust or trustee, receiver, fiduciary, partnership, |
24 | conservator, any political subdivision of the Commonwealth or |
25 | any other state. Whenever used in any of the provisions of this |
26 | article prescribing or imposing penalties, the word "person" as |
27 | applied to a partnership, unincorporated association or other |
28 | joint venture, means the partners or members thereof, and as |
29 | applied to a corporation, means all the officers and directors |
30 | thereof. |
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1 | "Retailer." A person that, in the usual course of business, |
2 | purchases or receives tobacco products from any source for the |
3 | purpose of sale to a consumer, or who owns, leases or otherwise |
4 | operates one or more vending machines for the purpose of sale of |
5 | tobacco products to the ultimate consumer. The term includes a |
6 | person that buys, sells, transfers or deals in tobacco products |
7 | for profit and is not licensed as a tobacco products wholesaler |
8 | under this article. |
9 | "Roll-your-own tobacco." Any tobacco which, because of its |
10 | appearance, type, packaging or labeling, is suitable for use and |
11 | is likely to be offered to, or purchased, by, consumers as |
12 | tobacco for making cigarettes. For purposes of reporting sales |
13 | of this product under the act of June 22, 2000 (P.L.394, No.54), |
14 | known as the Tobacco Settlement Agreement Act, 0.09 ounces of |
15 | tobacco shall constitute one individual unit sold. |
16 | "Sale." Any transfer of ownership, custody or possession of |
17 | tobacco products for a consideration; any exchange, barter or |
18 | gift; or any offer to sell or transfer the ownership, custody or |
19 | possession of tobacco products for consideration. |
20 | "Tobacco products." Cigars, little cigars, cheroots, |
21 | stogies, periques, granulated, plug cut, crimp cut, ready rubbed |
22 | and other smoking tobacco, roll-your-own tobacco, snuff, dry |
23 | snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut |
24 | and other chewing tobaccos, shorts, refuse scraps, clippings, |
25 | cuttings and sweepings of tobacco and other kinds and forms of |
26 | tobacco, prepared in such manner as to be suitable for chewing |
27 | or ingesting or for smoking in a pipe or otherwise, or both for |
28 | chewing and smoking. The term does not include cigarettes. |
29 | "Tobacco products wholesaler." A person, including a |
30 | distributor, engaged in the business of selling tobacco products |
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1 | that receives, stores, sells, exchanges or distributes tobacco |
2 | products to retailers or other wholesalers in this Commonwealth. |
3 | "Unclassified importer." A person in this Commonwealth that |
4 | acquires a tobacco product from any source on which the tax |
5 | imposed by this article was not paid and that is not a person |
6 | otherwise required to be licensed under the provisions of this |
7 | article. The term includes, but is not limited to, consumers who |
8 | purchase tobacco products using the Internet or mail order |
9 | catalogs for personal possession, use or resale in this |
10 | Commonwealth. |
11 | "Vending machine operator." A person who places or services |
12 | one or more tobacco product vending machines whether owned, |
13 | leased or otherwise operated by the person at locations from |
14 | which tobacco products are sold to the ultimate consumer. The |
15 | owner or tenant of the premises upon which a vending machine is |
16 | placed shall not be considered a vending machine operator if the |
17 | owner's or tenant's sole remuneration therefrom is a flat rental |
18 | fee or commission based upon the number or value of tobacco |
19 | products sold from the machine, unless the owner or tenant |
20 | actually owns the vending machine or leases the vending machine |
21 | under an agreement whereby the profits from the sale of the |
22 | tobacco products directly inure to the owner's or tenant's |
23 | benefit. |
24 | Section 1202-A. Incidence and rate of tax. |
25 | (a) Imposition.--The tobacco products tax shall be imposed |
26 | on the dealer or unclassified importer at the time the tobacco |
27 | product is first manufactured, purchased, imported, received or |
28 | acquired in this Commonwealth for resale or use at the rate of: |
29 | (1) Thirty-six cents per ounce and a proportionate tax |
30 | at the same rate on all fractional parts of an ounce of any |
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1 | tobacco product other than cigars and cigarillos. |
2 | (2) Three and six tenths cents per cigar and cigarillo. |
3 | (b) Exceptions.--The tax shall not be imposed on any tobacco |
4 | products that: |
5 | (1) are exported from this Commonwealth; or |
6 | (2) are not subject to taxation by the Commonwealth |
7 | pursuant to any laws of the United States. |
8 | (c) Weight.--Whenever this article refers to any |
9 | manufactured tobacco product on which the tax is based on |
10 | weight, the weight as shown by the manufacturer, or if there is |
11 | no such weight stated, the weight as shown on the Federal |
12 | internal revenue stamp shall apply. |
13 | Section 1203-A. Floor tax. |
14 | (a) Payment.--Any wholesaler or retailer that, as of the |
15 | effective date of this article, possesses tobacco products |
16 | subject to the tax imposed by section 1202-A, shall pay the tax |
17 | on the tobacco products in accordance with the rates specified |
18 | in section 1202-A. The tax shall be paid and reported on a form |
19 | prescribed by the department within 90 days of the effective |
20 | date of this section. |
21 | (b) Administrative penalty; license.--If a tobacco products |
22 | dealer fails to file the report required by subsection (a) or |
23 | fails to pay the tax imposed by subsection (a), the department |
24 | may, in addition to the interest and penalties provided in |
25 | section 1215-A, do any of the following: |
26 | (1) Impose an administrative penalty equal to the amount |
27 | of tax evaded or not paid. The penalty shall be added to the |
28 | tax evaded or not paid and assessed and collected at the same |
29 | time and in the same manner as the tax. |
30 | (2) Suspend, revoke or refuse to issue a tobacco |
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1 | products dealer's license. |
2 | (c) Criminal penalty.--In addition to any penalty imposed |
3 | under subsection (b), a person that willfully omits, neglects or |
4 | refuses to comply with a duty imposed under subsection (a) |
5 | commits a misdemeanor and shall, if convicted, be sentenced to |
6 | pay a fine of not less than $2,500 nor more than $5,000, to |
7 | serve a term of imprisonment not to exceed 30 days or both. |
8 | Section 1204-A. Remittance of tax to department. |
9 | Wholesalers and unclassified importers shall file monthly |
10 | reports by the 20th day of the month following the purchase of |
11 | tobacco products from the manufacturer or from any other source |
12 | on which the tax levied by this article has not been paid on a |
13 | form prescribed by the department. The tax is due at this time. |
14 | No discounts or reductions in tax shall be allowed for timely |
15 | filing and paying of the tax. |
16 | Section 1205-A. Limitation of tax. |
17 | Only the first sale or possession of tobacco products in this |
18 | Commonwealth shall be taxable and used in computing the amount |
19 | of tax due on tobacco products. |
20 | Section 1206-A. Procedures for claiming refund. |
21 | A dealer may make a claim for a refund of tax imposed by this |
22 | article under section 3003.1 and shall be in the form and |
23 | contain the information prescribed by the department by |
24 | regulation. |
25 | Section 1207-A. Sales or possession of tobacco product when tax |
26 | not paid. |
27 | (a) Sales or possession.--Any wholesaler or unclassified |
28 | importer that sells or possesses any tobacco product for which |
29 | the proper tax has not been paid commits a summary offense and |
30 | shall, upon conviction, be sentenced to pay costs of prosecution |
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1 | and a fine of not less than $100 not more than $1,000 or to |
2 | imprisonment for not more than 60 days, or both, at the |
3 | discretion of the court. Any tobacco products purchased from a |
4 | wholesaler properly licensed under this article shall be |
5 | presumed to have the proper taxes paid. |
6 | (b) Tax evasion.--Any person that shall falsely or |
7 | fraudulently, maliciously, intentionally or willfully with |
8 | intent to evade the payment of the Pennsylvania tobacco products |
9 | tax, sell or possess any tobacco product for which the proper |
10 | tax has not been paid commits a felony and shall, upon |
11 | conviction, be sentenced to pay costs of prosecution and a fine |
12 | of not more than $15,000 or to imprisonment for not more than |
13 | five years, or both, at the discretion of the court. |
14 | Section 1208-A. Assessment. |
15 | The department is authorized and required to make the |
16 | inquiries, determinations and assessments of the tax, including |
17 | interest, additions and penalties, imposed by this article. |
18 | Section 1209-A. Mode and time of assessment. |
19 | (a) Underpayment of tax.--Within a reasonable time after any |
20 | return is filed, the department shall examine it and, if the |
21 | return shows a greater tax due or collected than the amount of |
22 | tax remitted with the return, the department shall issue an |
23 | assessment for the difference, together with an addition of 3% |
24 | of the difference, which shall be paid to the department within |
25 | ten days after a notice of the assessment has been mailed to the |
26 | taxpayer. If the assessment is not paid within ten days, there |
27 | shall be added thereto and paid to the department an additional |
28 | 3% of such difference for each month thereof during which the |
29 | assessment remains unpaid, but the total of all additions shall |
30 | not exceed 18% of the difference shown on the assessment. |
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1 | (b) Understatement of tax.--If the department determines |
2 | that any return or returns of any taxpayer understates the |
3 | amount of tax due, it shall determine the proper amount and |
4 | shall ascertain the difference between the amount of tax shown |
5 | in the return and the amount determined, such difference being |
6 | hereafter sometimes referred to as the deficiency. A notice of |
7 | assessment for the deficiency and the reasons therefore shall |
8 | then be sent to the taxpayer. The deficiency shall be paid to |
9 | the department within 30 days after a notice of the assessment |
10 | thereof has been mailed to the taxpayer. |
11 | (c) Failure to file return.--In the event that any taxpayer |
12 | fails to file a return required by this article, the department |
13 | may make an estimated assessment based on information available |
14 | of the proper amount of tax owing by the taxpayer. A notice of |
15 | assessment in the estimated amount shall be sent to the |
16 | taxpayer. The tax shall be paid within 30 days after a notice of |
17 | such estimated assessment has been mailed to the taxpayer. |
18 | Section 1210-A. Limitation on assessment and collection. |
19 | The amount of the tax imposed by this article shall be |
20 | assessed within three years after the date when the return |
21 | provided for by section 1209-A (a) or (c) is filed or the end of |
22 | the year in which the tax liability arises, whichever shall last |
23 | occur. The assessment may be made at any time during such period |
24 | notwithstanding that the department may have made one or more |
25 | previous assessments against the taxpayer for the year in |
26 | question, or for any part of such year. In any such case, no |
27 | credit shall be given for any penalty previously assessed or |
28 | paid. |
29 | Section 1211-A. Failure to file return. |
30 | Where no return is filed, the amount of the tax due may be |
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1 | assessed and collected at any time as to taxable transactions |
2 | not reported. |
3 | Section 1212-A. False or fraudulent return. |
4 | Where the taxpayer willfully files a false or fraudulent |
5 | return with intent to evade the tax imposed by this article, the |
6 | amount of tax due may be assessed and collected at any time. |
7 | Section 1213-A. Extension of limitation period. |
8 | Notwithstanding any other provision of this article, where, |
9 | before the expiration of the period prescribed for the |
10 | assessment of a tax, a taxpayer has consented, in writing, that |
11 | the period be extended, the amount of tax due may be assessed at |
12 | any time within the extended period. The period so extended may |
13 | be extended further by subsequent consents, in writing, made |
14 | before the expiration of the extended period. |
15 | Section 1214-A. Failure to furnish information, returning false |
16 | information or failure to permit inspection. |
17 | (a) Penalty.--Any dealer who fails to keep or make any |
18 | record, return, report, inventory or statement, or keeps or |
19 | makes any false or fraudulent record, return, report, inventory |
20 | or statement required by this article commits a misdemeanor and |
21 | shall, upon conviction, be sentenced to pay costs of prosecution |
22 | and a fine of $500 and to imprisonment for not more than one |
23 | year, or both, at the discretion of the court. |
24 | (b) Examination.--The department is authorized to examine |
25 | the books and records, the stock of tobacco products and the |
26 | premises and equipment of any dealer in order to verify the |
27 | accuracy of the payment of the tax imposed by this article. The |
28 | person subject to an examination shall give to the department or |
29 | its duly authorized representative, the means, facilities and |
30 | opportunity for the examination. Willful refusal to cooperate |
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1 | with or permit an examination to the satisfaction of the |
2 | department shall be sufficient grounds for the suspension or |
3 | revocation of a tobacco products dealer's license. In addition, |
4 | a person who willfully refuses to cooperate with or permit an |
5 | examination to the satisfaction of the department commits a |
6 | misdemeanor and shall, upon conviction, be sentenced to pay |
7 | costs of prosecution and a fine of $500 or to imprisonment for |
8 | not more than one year, or both, at the discretion of the court. |
9 | (c) Records; licensed dealer.--A licensed dealer shall keep |
10 | and maintain for a period of four years records in the form |
11 | prescribed by the department by regulation. The records shall be |
12 | maintained at the location for which the license is issued. |
13 | (d) Reports.--A licensed dealer shall file reports at times |
14 | and in the form prescribed by the department by regulation. |
15 | (e) Records; licensed manufacturer.--A licensed manufacturer |
16 | located or doing business in this Commonwealth who sells tobacco |
17 | products to a wholesale license holder in this Commonwealth |
18 | shall keep records showing: |
19 | (1) The number and kind of tobacco products sold. |
20 | (2) The date the tobacco products were sold. |
21 | (3) The name and license number of the distributor the |
22 | tobacco products were sold to. |
23 | (4) The total weight of each of the tobacco products |
24 | sold to the license holder. |
25 | (5) The place where the tobacco products were shipped. |
26 | (6) The name of the common carrier. |
27 | (f) Manufacturer.--A manufacturer who sells tobacco products |
28 | to a license holder in this Commonwealth shall file with the |
29 | department, on or before the 20th of each month, a report |
30 | showing the information listed in subsection (e) for the |
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1 | previous month. |
2 | Section 1215-A. Other violations. |
3 | (a) Criminal penalty.--Any person who willfully omits, |
4 | neglects or refuses to comply with any duty imposed on the |
5 | person by this article or does anything prohibited by this |
6 | article for which no specific penalty is otherwise provided, |
7 | commits a summary offense and shall, upon conviction, be |
8 | sentenced to pay costs of prosecution and a fine of not more |
9 | than $500, and, in default of payment, to imprisonment for not |
10 | more than 30 days. |
11 | (b) Additional liability.--Any person who willfully omits or |
12 | neglects to pay any tax imposed by this article, or attempts in |
13 | any manner to evade or defeat the tax or payment shall, in |
14 | addition to any other penalty provided in this article, be |
15 | liable to a penalty equal to the amount of tax evaded or not |
16 | paid, which penalty shall be added to the tax and assessed and |
17 | collected at the same time in the same manner as a part of the |
18 | tax. |
19 | (c) Interest.--Any person who fails to pay tax at the time |
20 | prescribed shall, in addition to any other penalty provided in |
21 | this article, be liable to a penalty of 5% of the tax due but |
22 | unpaid for each month or fraction thereof the tax remains unpaid |
23 | together with the interest at the rate established pursuant to |
24 | section 806 of the act of April 9, 1929 (P.L.343, No.176), known |
25 | as The Fiscal Code, on the tax from the time the tax became due. |
26 | The interest and penalties provided in this subsection shall be |
27 | added to the tax and assessed and collected at the same time in |
28 | the same manner and as a part of the tax. |
29 | Section 1216-A. Peace officers. |
30 | Employees of the department are officially designated by the |
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1 | Secretary of Revenue as field investigators, and who carry |
2 | identification of such capacity, are hereby declared to be peace |
3 | officers and they, as well as other peace officers of the |
4 | Commonwealth are hereby given police powers and authority |
5 | throughout this Commonwealth to arrest on view, except in |
6 | private homes, without warrant, any person actually engaged in |
7 | the unlawful sale of any tobacco product for which the proper |
8 | tax has not been paid, or any person unlawfully having in the |
9 | person's possession any tobacco product for which the proper tax |
10 | has not been paid contrary to the provisions of this article. A |
11 | peace officer has authority upon reasonable and probable cause |
12 | to search for and seize without warrant or process, except in |
13 | private homes, any tobacco product for which the proper tax has |
14 | not been paid which is unlawfully possessed. |
15 | Section 1217-A. Fines and penalties payable to Commonwealth. |
16 | All fines and penalties imposed and collected under this |
17 | article shall be payable to the Commonwealth and are |
18 | appropriated to the department to be used in enforcing this |
19 | article. |
20 | Section 1218-A. Enforcement; regulations. |
21 | The department is hereby charged with the enforcement of the |
22 | provisions of this article, and it is authorized to promulgate |
23 | regulations relating to the administration and enforcement of |
24 | the provisions of this article. The violation of a regulation |
25 | promulgated under the authority of this article shall be |
26 | considered to be a violation of this article. |
27 | Section 1219-A. Records of shipments and receipts of tobacco |
28 | products required. |
29 | The department may, in its discretion, require reports from |
30 | any common or contract carrier who transports tobacco products |
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1 | to any point or points within this Commonwealth, and from any |
2 | bonded warehouseman or bailee who has in the possession of the |
3 | warehouseman or bailee any tobacco products. The reports shall |
4 | contain the information concerning shipments of tobacco products |
5 | that the department determines to be necessary for the |
6 | administration of this article. All common and contract |
7 | carriers, bailees and warehousemen shall permit the examination |
8 | by the department or its authorized agents of any records |
9 | relating to the shipment or receipt of tobacco products. |
10 | Section 1220-A. Licensing of tobacco products dealers. |
11 | (a) Prohibition.--No person, unless all sales of tobacco |
12 | products are exempt from Pennsylvania tobacco products tax, |
13 | shall sell, transfer or deliver any tobacco products in this |
14 | Commonwealth without first obtaining the proper license provided |
15 | for in this article. |
16 | (b) Application.--An applicant for a dealer's license shall |
17 | complete and file an application with the department. The |
18 | application shall be in the form and contain information |
19 | prescribed by the department by regulation and shall set forth |
20 | truthfully and accurately the information desired by the |
21 | department. If the application is approved, the department shall |
22 | license the dealer for a period of one year and the license may |
23 | be renewed annually thereafter. |
24 | Section 1221-A. Licensing of tobacco products manufacturers. |
25 | Any manufacturer doing business within this Commonwealth |
26 | shall first obtain a license to sell tobacco products by |
27 | submitting an application to the department containing the |
28 | information requested by the department and designating a |
29 | process agent. If a manufacturer designates no process agent, |
30 | the manufacturer shall be deemed to have made the Secretary of |
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1 | State its agent for the service of process in this Commonwealth. |
2 | Section 1222-A. Licensing of wholesalers. |
3 | (a) Requirements.--Applicants for a wholesale license or |
4 | renewal of that license shall meet the following requirements: |
5 | (1) The premises on which the applicant proposes to |
6 | conduct business are adequate to protect the revenue. |
7 | (2) The applicant is a person of reasonable financial |
8 | stability and reasonable business experience. |
9 | (3) The applicant, or any shareholder controlling more |
10 | than 10% of the stock if the applicant is a corporation or |
11 | any officer or director if the applicant is a corporation, |
12 | shall not have been convicted of any crime involving moral |
13 | turpitude. |
14 | (4) The applicant shall not have failed to disclose any |
15 | material information required by the department, including |
16 | information that the applicant has complied with this article |
17 | by providing a signed statement under penalty of perjury. |
18 | (5) The applicant shall not have made any material false |
19 | statement in the application. |
20 | (6) The applicant shall not have violated any provision |
21 | of this article. |
22 | (7) The applicant shall have filed all required State |
23 | tax reports and paid any State taxes not subject to a timely |
24 | perfected administrative or judicial appeal or subject to a |
25 | duly authorized deferred payment plan. |
26 | (b) Multiple locations.--The wholesale dealer's license |
27 | shall be valid for one specific location only. Wholesale dealers |
28 | with more than one location shall obtain a license for each |
29 | location. |
30 | Section 1223-A. Licensing of retailers. |
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1 | Applicants for retail license or renewal of that license |
2 | shall meet the following requirements: |
3 | (1) The premises in which the applicant proposes to |
4 | conduct business are adequate to protect the revenues. |
5 | (2) The applicant shall not have failed to disclose any |
6 | material information required by the department. |
7 | (3) The applicant shall not have any material false |
8 | statement in the application. |
9 | (4) The applicant shall not have violated any provision |
10 | of this article. |
11 | (5) The applicant shall have filed all required State |
12 | tax reports and paid any State taxes not subject to a timely |
13 | perfected administrative or judicial appeal or subject to a |
14 | duly authorized deferred payment plan. |
15 | Section 1224-A. License for tobacco products vending machines. |
16 | Each tobacco products vending machine shall have a current |
17 | license which shall be conspicuously and visibly placed on the |
18 | machine. There shall be conspicuously and visibly placed on |
19 | every tobacco products vending machine the name and address of |
20 | the owner and the name and address of the operator. |
21 | Section 1225-A. License fees and issuance and display of |
22 | license. |
23 | (a) At the time of making any application or license renewal |
24 | application: |
25 | (1) An applicant for a tobacco products manufacturers |
26 | license shall pay the department a license fee of $1,500. |
27 | (2) An applicant for a wholesale tobacco products |
28 | dealer's license shall pay to the department a license fee of |
29 | $1,500. |
30 | (3) An applicant for a retail tobacco products dealer's |
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1 | license shall pay to the department a license fee of $25. |
2 | (4) An applicant for a vending machine tobacco products |
3 | dealer's license shall pay to the department a license fee of |
4 | $25. |
5 | (b) Proration.--Fees shall not be prorated. |
6 | (c) Issuance and display.--On approval of the application |
7 | and payment of the fees, the department shall issue the proper |
8 | license which must be conspicuously displayed at the location |
9 | for which issued. |
10 | Section 1226-A. Electronic filing. |
11 | The department may at its discretion require that any or all |
12 | returns, reports or registrations that are required to be filed |
13 | under this article be filed electronically. Failure to |
14 | electronically file any return or information the department may |
15 | direct to be filed electronically shall subject the taxpayer to |
16 | a penalty of 5% of the tax due on the return, up to a maximum of |
17 | $1,000, but not less than $10. This penalty shall be assessed at |
18 | any time and collected in the manner provided in this article. |
19 | This penalty shall be in addition to any civil penalty imposed |
20 | in this article for failure to furnish information or file a |
21 | return. The criminal penalty for failure to file a return |
22 | electronically shall be the same as the criminal penalty for |
23 | failure to furnish information or file a return under this |
24 | article. |
25 | Section 1227-A. Expiration of license. |
26 | (a) Expiration.--A license shall expire on the last day of |
27 | June next succeeding the date upon which it was issued unless |
28 | the department at an earlier date suspends, surrenders or |
29 | revokes the license. |
30 | (b) Violation.--After the expiration date of the license or |
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1 | sooner if the license is suspended, surrendered or revoked, it |
2 | shall be illegal for any dealer to engage directly or indirectly |
3 | in the business heretofore conducted by the dealer for which the |
4 | license was issued. Any licensee who shall, after the expiration |
5 | date of the license, engage in the business theretofore |
6 | conducted by the licensee either by way of purchase, sale, |
7 | distribution or in any other manner directly or indirectly |
8 | engaged in the business of dealing with tobacco products for |
9 | profit shall be in violation of this article and be subject to |
10 | the penalties provided in this article. |
11 | Section 1228-A. Administration powers and duties. |
12 | (a) Department.--The administration of this article is |
13 | hereby vested in the department. The department shall adopt |
14 | rules and regulations for the enforcement of this article. The |
15 | department may impose fees as may be necessary to cover the |
16 | costs incurred in administering this section. |
17 | (b) Joint administration.--The department is authorized to |
18 | jointly administer this article with other provisions of this |
19 | act, including joint reporting of information, forms, returns, |
20 | statements, documents or other information submitted to the |
21 | department. |
22 | Section 1229-A. Sales without license. |
23 | (a) Penalty.--Any dealer or other person who shall, without |
24 | being the holder of a proper unexpired dealer's license, engage |
25 | in the business of purchasing, selling, distributing or in any |
26 | other manner directly or indirectly engaging in the business of |
27 | dealing with tobacco products for profit commits a summary |
28 | offense and shall, upon conviction, be sentenced to pay costs of |
29 | prosecution and a fine of not less than $250 nor more than |
30 | $1,000, or to imprisonment for not more than 30 days, or both, |
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1 | at the discretion of the court. |
2 | (b) Prima facie evidence.--Open display of tobacco products |
3 | in any manner shall be prima facie evidence that the person |
4 | displaying such tobacco products is directly or indirectly |
5 | engaging in the business of dealing with tobacco products for |
6 | profit. |
7 | Section 1230-A. Violations and penalties. |
8 | (a) Suspension.--The license of any tobacco products dealer |
9 | or wholesaler or retailer who violates this article may be |
10 | suspended after due notice and opportunity of hearing for a |
11 | period of not less than five days or more than 30 days for a |
12 | first violation and shall be revoked or suspended for any |
13 | subsequent violation. |
14 | (b) Fine.--In addition to the provisions of subsection (a), |
15 | upon adjudication of a first violation, the tobacco products |
16 | dealer shall be fined not less than $2,500 nor more than $5,000. |
17 | For subsequent violations, the agent, wholesaler or retailer |
18 | shall, upon adjudication thereof, be fined not less than $5,000 |
19 | nor more than $15,000. |
20 | (c) Civil penalty.--A person who violates section 1214-A |
21 | (b), (c), or (d), or 1225-A(c), shall be subject to a civil |
22 | penalty not to exceed $300 per violation but shall not be |
23 | subject to subsections (a) and (b). |
24 | Section 1231-A. Property rights. |
25 | (a) Vending machines.--No property rights shall exist in any |
26 | vending machine in which untaxed tobacco products are found, nor |
27 | shall any property rights exist in any vehicle containing $2,500 |
28 | worth or more of untaxed tobacco products or containing more |
29 | than $250 worth of untaxed tobacco products if the owner has |
30 | been previously convicted of the illegal sale, possession or |
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1 | transportation of untaxed tobacco products in this or any other |
2 | jurisdiction. The vending machine, all tobacco products |
3 | contained in the vending machine, and the vehicle which |
4 | contained the untaxed tobacco products shall be deemed |
5 | contraband and shall be confiscated at the discretion of the |
6 | Secretary of Revenue, forfeited to the Commonwealth as provided |
7 | in subsections (e) and (f). No such property, when in the |
8 | custody of the department, the police or other proper peace |
9 | officers shall be seized or taken therefrom by any writ of |
10 | replevin or other judicial process unless a petition for |
11 | forfeiture is not timely filed. |
12 | (b) Disposal.--Upon forfeiture or confiscation, the |
13 | department shall dispose of any forfeited machine or forfeited |
14 | tobacco products in accordance with subsections (e) and (f). |
15 | (c) Tobacco products; nonlicensed sale.--No property rights |
16 | shall exist in any tobacco products which have been possessed, |
17 | sold or offered for sale by any person without a proper license |
18 | or any tobacco products possessed, sold or offered for sale by |
19 | any person not possessing proper documentation showing legal |
20 | purchase of the tobacco products, and all such tobacco products |
21 | shall be deemed contraband, shall be confiscated and forfeited |
22 | to the Commonwealth without further proceedings and delivered to |
23 | the agents of the department at the time of conviction. |
24 | (d) Tobacco products; tax evasion.--No property rights shall |
25 | exist in any tobacco products confiscated in connection with the |
26 | operation of any scheme designed to evade the payment of proper |
27 | Pennsylvania tobacco products tax. The tobacco products shall be |
28 | confiscated and at the discretion of the Secretary of Revenue |
29 | shall be forfeited to the Commonwealth in accordance with the |
30 | provisions of this article. |
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1 | (e) Sale or destruction.--The department shall dispose of |
2 | tobacco products forfeited under this article by the sale or |
3 | destruction of the tobacco products pursuant to regulations |
4 | promulgated by the department. |
5 | (f) In rem action.--The proceedings for the forfeiture of |
6 | any tobacco products vending machine, motor vehicle or other |
7 | means of transportation, in which are found untaxed tobacco |
8 | products shall be in rem. The Commonwealth shall be the |
9 | plaintiff and the property shall be the defendant. A petition |
10 | shall be filed within ten days after confiscation in the court |
11 | of common pleas of the county in which the property or vehicle |
12 | was taken by agents of the department, the police or other |
13 | authorized peace officer, verified by oath or affirmation of any |
14 | tobacco products tax enforcement officer, police officer or |
15 | other person. In the event that the petition is not filed within |
16 | the time prescribed, the confiscated vending machine or motor |
17 | vehicle shall be immediately returned to the person from whom |
18 | confiscated or the owner thereof. |
19 | (g) Contents of petition.--The petition shall contain the |
20 | following: |
21 | (1) The description of the property or vehicle seized. |
22 | (2) A statement of the time when and place where seized. |
23 | (3) The name and address of the owner, if known. |
24 | (4) The name and address of the person in possession, if |
25 | known. |
26 | (5) The statement of the circumstances under which the |
27 | property was found and the number and description of all |
28 | untaxed tobacco products found therein. |
29 | (6) A prayer for an order forfeiting the property to the |
30 | Commonwealth, unless cause be shown to the contrary. |
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1 | (h) Service.--A copy of the petition shall be served in any |
2 | manner provided by law for service of process or complaint in an |
3 | action in assumpsit on the owner if the owner can be found |
4 | within this Commonwealth. If the owner cannot be found within |
5 | this Commonwealth, a copy of the petition shall be served on the |
6 | owner by registered mail or certified mail, return receipt |
7 | requested, addressed to the last known address of the owner. The |
8 | person in possession and all encumbrance holders having a |
9 | perfected security interest in the property confiscated shall be |
10 | notified in like manner. The copies shall have endorsed thereon |
11 | a notice substantially similar to the following: |
12 | "To the claimant of the within property: You are required |
13 | to file an answer to this petition setting forth your |
14 | title in and right to possession of said property, within |
15 | 20 days from the service hereof, and you are also |
16 | notified that if you fail to file said answer, a decree |
17 | of forfeiture will be entered against the property." |
18 | (i) Signature.--The notice shall be signed by the petitioner |
19 | or the petitioner's attorney or the district attorney or |
20 | Attorney General. |
21 | (j) Owner unknown.--If the owner of the property is unknown, |
22 | notice of the petition shall also be given by an advertisement |
23 | in only one newspaper of general circulation published in the |
24 | county where the property was seized, once a week for two |
25 | successive weeks. No other advertisement of any sort shall be |
26 | necessary, any other law to the contrary notwithstanding. The |
27 | notice shall contain a statement of the seizure of the property, |
28 | with the description thereof, the place and date of seizure, and |
29 | shall direct any claimants thereof to file a claim therefor, on |
30 | or before a date given in the notice, which shall not be less |
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1 | than ten days from the date of the last publication. |
2 | (k) Date of hearing.--Upon the filing of any claim for the |
3 | property setting forth a right of possession thereof, the case |
4 | shall be deemed at issue and a hearing shall be held within ten |
5 | days thereof. |
6 | (l) Conduct of hearing.--At the time of the hearing, if the |
7 | Commonwealth shall prove by competent evidence to the |
8 | satisfaction of the court that the machine or motor vehicle in |
9 | question was found to contain untaxed tobacco products, then and |
10 | in that event the claimant shall show that the claimant is the |
11 | owner of the tobacco products vending machine or other |
12 | equipment, motor vehicle or tobacco products, and that all |
13 | tobacco products found in the machine, or any other place from |
14 | which the tobacco products were seized, were properly taxed, or |
15 | that the claimant is otherwise not subject to the provisions of |
16 | this section as the result of any exemption or allowance |
17 | provided for in other sections of this article. |
18 | (m) Burden of proof.--The claimant shall have the burden of |
19 | proving that the claimant is not subject to the provisions of |
20 | this section, but the burden of proof shall be upon the |
21 | Commonwealth to prove all other facts necessary for the |
22 | forfeiture of a tobacco products vending machine or motor |
23 | vehicle. In the event that the Commonwealth has not met its |
24 | burden by a preponderance of the evidence, or the claimant has |
25 | proved that the claimant is not subject to the provisions of |
26 | this section, the court shall order the machine, motor vehicle |
27 | or other equipment returned to the claimant; otherwise, the |
28 | court shall order the same forfeited to the Commonwealth. |
29 | However, in the case of a motor vehicle, if the claimant proves |
30 | to the satisfaction of the court that the claimant is the |
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1 | registered owner of the motor vehicle and that the claimant did |
2 | not know, nor have reason to know, that it was being used to |
3 | carry untaxed tobacco products, the court in its discretion may |
4 | order the same returned to the claimant. |
5 | (n) Motor vehicles.--In the case of a motor vehicle, should |
6 | the claimant prove that the claimant holds a valid encumbrance |
7 | upon the motor vehicle, notice of which encumbrance has been |
8 | duly noted on the certificate of title to the motor vehicle in |
9 | accordance with the provisions of 75 Pa.C.S. (relating to |
10 | vehicles), the forfeiture shall be subject to the encumbrance as |
11 | of the date of the seizure less prepaid or unearned interest and |
12 | before the motor vehicle may be sold, exchanged or otherwise |
13 | transferred or retained for use by the Commonwealth, the |
14 | outstanding amount of the encumbrance shall be paid to the |
15 | claimant; or possession of the motor vehicle shall be turned |
16 | over to the claimant who shall expose the same to public sale |
17 | and shall pay over to the Commonwealth any amount realized in |
18 | excess of the outstanding amount of the encumbrance less the |
19 | reasonable costs incurred by the claimant in conducting the |
20 | sale. |
21 | Section 1232-A. Sample of tobacco products. |
22 | (a) Samples.--The department shall, by regulation, govern |
23 | the receipt, distribution of and payment of tax on sample |
24 | tobacco products issued for free distribution. |
25 | (b) Construction.--Nothing in this article or the |
26 | regulations promulgated under this article shall prohibit the |
27 | bringing into this Commonwealth by a manufacturer samples of |
28 | tobacco products to be delivered and distributed only through |
29 | licensed dealers or the manufacturers or their sales |
30 | representatives. The tax shall be paid by the manufacturer |
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1 | provided all such packs bear the legend "all applicable State |
2 | taxes have been paid." Under no circumstances shall any untaxed |
3 | tobacco products be sold within this Commonwealth. |
4 | Section 1233-A. Labeling and packaging. |
5 | It shall be unlawful to knowingly possess, sell, give, |
6 | transfer or deliver to any person, any tobacco product where the |
7 | packaging of which has been modified or altered by a person |
8 | other than the original manufacturer. Modification or alteration |
9 | shall include the placement of a sticker, writing or mark to |
10 | cover information on the packages. For purposes of this section, |
11 | a tobacco product package shall not be construed to have been |
12 | modified or altered by a person other than the manufacturer if |
13 | the most recent modification or alteration was made by the |
14 | manufacturer or person authorized by the manufacturer and |
15 | approved by the department. |
16 | Section 1234-A. Information exchange. |
17 | The department is authorized to exchange information with any |
18 | other Federal, State or local enforcement agency for purposes of |
19 | enforcing this article. |
20 | Section 2. This act shall take effect August 1, 2009. |
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