HOUSE BILL NO. 153
AS AMENDED BY
HOUSE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO STATE TAXES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :
Section 1. Amend Title 30 of the Delaware Code by inserting a new Chapter 53, Tobacco Product Tax, Subchapter VI, Delivery Sales of Any Tobacco Product as follows:
“Subchapter VI. Delivery Sales of Any Tobacco Product.
§ 5361. Definitions.
For purposes of this Subchapter:
(1) ‘Adult’ means a person who is at least the legal minimum purchase age.
(2) ‘Consumer’ means an individual who is not licensed as a distributor or retail dealer pursuant to Subchapter II of this Chapter.
(3) ‘Delivery sale’ means any sale of any tobacco product to a consumer in this State where either (i) the purchaser submits the order for such sale by means of a telephonic or other method of voice transmission, the mails or any other delivery service, or the Internet or other online service; or (ii) the any tobacco product are delivered by use of the mails or of a delivery service. A sale of any tobacco product shall be a delivery sale regardless of whether the seller is located within or without this State. A sale of any tobacco product not for personal consumption to a person who is a distributor or a retail dealer shall not be a delivery sale.
(4) ‘Delivery service’ means any person who is engaged in the commercial delivery of letters, packages, or other containers.
(5) ‘Department’ means the Department of Finance.
(6) ‘Legal minimum purchase age’ is the minimum age at which an individual may legally purchase any tobacco product in this State.
(7) ‘Mails’ or ‘mailing’ means the shipment of cigarettes through the United States Postal Office.
(8) ‘Person’ means the same as that term is defined in § 302(16) of Title 1.
(9) ‘Shipping container’ means a container in which cigarettes are shipped in connection with a delivery sale.
(10) ‘Shipping documents’ means bills of lading, airbills, or any other documents used to evidence the undertaking by a delivery service to deliver letters, packages, or other containers.
(11) 'Tobacco products’ means one or more cigarettes, herbal cigarettes or cigars, bidis, chewing tobacco, powdered tobacco, pipe tobacco, snuff or any other tobacco product.
§ 5362. Requirements for Delivery Sales.
(a) No person shall make a delivery sale of any tobacco product to any individual who is under the legal minimum purchase age in this State.
(b) Each person accepting a purchase order for a delivery sale shall comply with:
(1) the age verification requirements set forth in § 5363 of this Title;
(2) the disclosure requirements set forth in § 5364 of this Title;
(3) the shipping requirements set forth in § 5365 of this Title;
(4) the registration and reporting requirements set forth in § 5366 of this Title;
(5) the tax collection requirements set forth in § 5367 of this Title; and
(6) all other laws of this State generally applicable to sales of any tobacco product that occur entirely within this State, including, but not limited to, those laws imposing: (i) excise taxes, (ii) sales taxes, (iii) license and revenue-stamping requirements, and (iv) escrow payment obligations as set forth in § 6082 of this Section.
§ 5363. Age Verification Requirements.
(a) No person shall mail, ship, or otherwise deliver any tobacco product in connection with a delivery sale unless prior to the first delivery sale to such consumer:
(1) receives both a copy of a valid form of government identification showing date of birth to verify the purchaser is age eighteen (18) years or over and an attestation from the purchaser certifying that the information on the government identification truly and correctly identifies the purchaser and the purchaser’s current address. Such attestation shall also confirm (A) that the prospective consumer understands that signing another person’s name to such certification is illegal; (B) that the sale of tobacco products, including cigarettes, to individuals under the legal minimum purchase age is illegal; and (C) that the purchase of tobacco products, including cigarettes, by individuals under the legal minimum purchase age is illegal under the laws of this State;
(2) delivers the tobacco product to the address of the purchaser given on the valid form of government identification and by a postal or package delivery service method that either limits delivery to that purchaser and requires the purchaser to sign personally to receive the delivery or requires a signature of an adult at the purchaser’s address to deliver the package;
(3) provides to the prospective consumer, via e-mail or other means, a notice that meets the requirements of § 5364 of this Title; and
(4) in the case of an order for any tobacco product pursuant to an advertisement on the Internet, receives payment for the delivery sale from the prospective consumer by a credit or debit card that has been issued in such consumer’s name.
(b) Persons accepting purchase orders for delivery sales may request that prospective consumers provide their e-mail addresses.
§ 5364. Disclosure Requirements.
The notice required under § 5363(a)(3) of this Title shall include:
(a) a prominent and clearly legible statement that any tobacco product sales to consumers below the legal minimum purchase age are illegal;
(b) a prominent and clearly legible statement that sales of cigarettes are restricted to those consumers who provide verifiable proof of age in accordance with § 5363 of this Title; and
(c) a prominent and clearly legible statement that any tobacco product sales are subject to tax under § 5305 of this Title, and an explanation of how such tax has been, or is to be, paid with respect to such delivery sale.
§ 5365. Shipping Requirements.
(a) Each person who mails, ships, or otherwise delivers any tobacco product in connection with a delivery sale shall become affixing agents as defined by § 5301 of this Title and shall be eligible to receive commissions pursuant to § 5318 and further shall:
(1) include as part of the bill of lading or other shipping documents a clear and conspicuous statement providing as follows: ‘Any Tobacco Product: Delaware Law Prohibits Shipping to Individuals Under 18, and Requires the Payment of all Applicable Taxes’;
(2) use a method of mailing, shipping, or delivery that obligates the delivery service to require (i) the consumer placing the purchase order for the delivery sale, or another adult of legal minimum purchase age residing at the consumer’s address, to sign to accept delivery of the shipping container, and (ii) proof, in the form of a valid, government-issued identification bearing a photograph of the individual who signs to accept delivery of the shipping container, demonstrating that he or she is either the addressee or another adult of legal minimum purchase age residing at the consumer’s address. However, proof of the legal minimum purchase age shall be required only if such individual appears to be under 27 years of age; and
(3) provide to the delivery service retained for such delivery sale evidence of full compliance with § 5367 of this Title.
(b) If the person accepting a purchase order for a delivery sale delivers the any tobacco product without using a delivery service, such person shall comply with all requirements of this Subchapter applicable to a delivery service and shall be in violation of the provisions of this Subchapter if he or she fails to comply with any such requirement.
§ 5366. Registration and Reporting Requirements.
(a) Prior to making delivery sales or mailing, shipping, or otherwise delivering any tobacco product in connection with any such sales, every person shall file with the Department a statement setting forth such person’s name, trade name, and the address of such person’s principal place of business and any other place of business.
(b) Not later than the tenth day of each calendar month, each person that has made a delivery sale or mailed, shipped, or otherwise delivered any tobacco product in connection with any such sale during the previous calendar month shall file with the Department a memorandum or a copy of the invoice that provides for each and every such delivery sale:
(1) the name and address of the consumer to whom such delivery sale was made;
(2) the brand or brands of the any tobacco product that were sold in such delivery sale; and
(3) the quantity of cigarettes that were sold in such delivery sale.
(c) Any person that satisfies the requirements of Section 376 of Title 15 of the United States Code shall be deemed to satisfy the requirements of this Section.
§ 5367. Collection of Taxes.
Each person accepting a purchase order for a delivery sale shall collect and remit to the Department all any tobacco product taxes imposed by this State with respect to such delivery sale, except that such collection and remission shall not be required to the extent such person has obtained proof (in the form of the presence of applicable tax stamps or otherwise) that such taxes already have been paid to the State.
§ 5368. Penalties.
(a) Except as otherwise provided in this Section, a first violation of any provision of this Subchapter shall be punishable by a fine of $1,000 or five (5) times the retail value of the any tobacco product involved, whichever is greater. A second or subsequent violation of any provision of this Subchapter shall be punishable by a fine of $5,000 or five (5) times the retail value of the cigarettes involved, whichever is greater.
(b) Any person who knowingly violates any provision of this Subchapter, or who knowingly and falsely submits a certification under § 5363(a)(1) of this Title in another person’s name, shall, for each such offense, be fined $10,000 or five (5) times the retail value of the cigarettes involved, whichever is greater, or imprisoned not more than five (5) years, or both.
(c) Any person failing to collect or remit to the Department any tax required in connection with a delivery sale shall be assessed, in addition to any other penalty, a penalty of five (5) times the retail value of the any tobacco product involved.
(d) (1) Any cigarettes sold or attempted to be sold in a delivery sale that do not meet the requirements of this Subchapter shall be forfeited to the State and destroyed.
(2) All fixtures, equipment, and all other materials and personal property on the premises of any person who, with the intent to defraud the State, violates any of the requirements of this Subchapter, shall be forfeited to the State.
§ 5369. Enforcement.
The Attorney General or his or her designee, or any person who holds a valid permit under 26 U.S.C. § 5712, may bring an action in the appropriate court in this State to prevent or restrain violations of this Subchapter by any person or any person controlling such person.”.
Approved June 30, 2003