Mich. Admin. Code R. 205.452 - Prescribed markings on cigarette boxes and shipping cases; resale and refund of returned cigarettes

Rule 2.

(1) Licensed wholesalers and unclassified acquirers shall submit stamp orders on the form prescribed by the department. The department shall establish guidelines for ordering and the timing of shipments, and shall determine the mode of shipment of an order. On the day of shipment, the department shall fax notice of shipment to the wholesaler or unclassified acquirer.

(2) Stamps given to a wholesaler or unclassified acquirer are on assignment from the department to the specific wholesaler or unclassified acquirer.

(3) A licensed wholesaler of cigarettes who receives cigarettes from the manufacturer at a Michigan location from which deliveries to other states will be made will report all cigarettes received into its unstamped Michigan inventory. When cigarettes destined for another state are pulled from inventory for stamping and export, the cigarettes will be reported as a deduction on schedule C of the multiple schedule. Such licensed wholesaler may have in its possession stamps from other states as needed to perform its multistate stamping duties. The stamps for other states are to be segregated from Michigan stamps, and the wholesaler must be able to provide documentation to the department and its representatives of the unaffixed stamps that are in the wholesaler's possession.

(4) A wholesaler or unclassified acquirer who possesses unaffixed stamps at the time its license is revoked or expired or at the time it discontinues the business of selling cigarettes shall return all unaffixed stamps to the department within 14 calendar days of the date of license revocation, license expiration, or discontinuance of its business.

(5) Beginning September 1, 1998, the refund to wholesalers and unclassified acquirers of the tax on cigarettes returned to manufacturers is allowed if all of the following conditions are met:

(a) A cigarette pack returned to a wholesaler or unclassified acquirer by a secondary wholesaler, retailer, or vending machine operator before September 1, 1998, for return to a manufacturer shall be kept separate from cigarettes returned to wholesalers on or after September 1, 1998.

(b) A cigarette pack returned to a wholesaler or unclassified acquirer by a secondary wholesaler, retailer, or vending machine operator on or after September 1, 1998, for return to the manufacturer must bear the stamp prescribed by the department in order to qualify for refund or credit of the tax paid.

(c) A refund claim for cigarettes held for return as of September 1, 1998, shall be submitted separately from any claims for cigarettes received for return on or after September 1, 1998.

(6) A wholesaler or unclassified acquirer is liable for the amount of the face value of any stamps which are lost through negligence, theft, or mysterious disappearance or which are not otherwise accounted for in the records of the wholesaler or unclassified acquirer. The tax due shall be less the percentage compensation under section 7(3) of the act. The tax due shall be assessed in accordance with the provisions of Act No. 122 of the Public Acts of 1941, as amended, being § 205.1et seq. of the Michigan Compiled Laws.If identifiable stamps that have been lost through negligence, theft, or mysterious disappearance are recovered within 4 years of the date of mailing by the department, then credit will be given against the tax due, less the percentage compensation under section 7(3) of the act, if adequate proofs are submitted to the department.

(7) Relating to the tax liability described under item (6) above, credit may be given against the tax due, less the percentage compensation, for the denominated value of stamps affixed to packs that have been destroyed by fire, flood, or other casualty before distribution. The wholesaler or unclassified acquirer must establish by clear and convincing evidence that the cigarettes were destroyed by fire, flood, or other casualty before distribution and must establish the denominated value of the affixed stamps. "Destroyed," as used in this subrule, refers to unaffixed stamps which can no longer be identified and affixed to cigarette packs, or stamps which are affixed to cigarette packs that no longer qualify for return to the manufacturer.

Notes

Mich. Admin. Code R. 205.452

1998 - 2000 AACS