TITLE 30

State Taxes

Commodity Taxes

CHAPTER 53. TOBACCO PRODUCT TAX

Subchapter II. Levy and Collection of Tax; License, Stamps


(a) An excise tax is imposed and assessed upon the sale or use of cigarettes within this State at the rate of 80.0 mills per cigarette. This tax shall apply only once to the same pack of cigarettes. In the event the tax computed according to this subsection results in a tax per pack or other unit of sale to which this tax applies involving a fraction of a cent, the tax applicable to that pack or other unit shall be computed by rounding the tax to the next higher whole cent.

(b) A tax is imposed and assessed upon the sale or use of all tobacco products other than moist snuff and cigarettes, and including, but not limited to, smokeless tobacco products and cigars within this State at the rate of 15% of the wholesale price on such products.

(c) A tax is imposed and assessed upon the sale or use of moist snuff within this State at the rate of 54 cents per ounce and a proportionate tax at the like rate on any fractional parts of an ounce. Such tax shall be computed based on the net weight as listed by the manufacturer.

(d) No tax imposed by this chapter shall be levied upon the possession or sale of tobacco products which this State is prohibited from taxing under the Constitution or statutes of the United States.

(e) If the seller and purchaser have registered with the Department and obtained exemption certificates, the following sales are exempt:

(1) Sales to veterans' organizations approved by the Department, if the tobacco products are being purchased by the organization for gratuitous issue to veteran patients in federal, state or state-aided hospitals;

(2) Sales to patients in Veterans' Administration Hospitals by retail dealers located in such hospitals.

(f) For purposes of this chapter:

(1) The term "cigar" means any roll for smoking which is not a cigarette and which is made wholly or in part of tobacco or any substitute therefor when the cover of the roll is made chiefly of tobacco.

(2) The term "wholesale price" shall mean the price for which a manufacturer sells a tobacco product to a distributor exclusive of any discount, rebate or other reduction; and

30 Del. C. 1953, § 5305; 54 Del. Laws, c. 296, § 1; 55 Del. Laws, c. 111, § 1; 57 Del. Laws, c. 136, § 21; 58 Del. Laws, c. 291, § 1; 64 Del. Laws, c. 231, § 1; 65 Del. Laws, c. 441, § 1; 66 Del. Laws, c. 3, §§ 1, 2; 67 Del. Laws, c. 280, §§ 1, 5, 6; 74 Del. Laws, c. 54, §§ 1, 2; 76 Del. Laws, c. 74, §§ 3, 4; 76 Del. Laws, c. 75, § 1; 77 Del. Laws, c. 73, § 1.;

The tax shall be paid and the stamp shall be affixed by the first person who has possession of tobacco products in this State.

30 Del. C. 1953, § 5306; 54 Del. Laws, c. 296, § 1; 57 Del. Laws, c. 136, § 23.;

No person shall engage in or conduct the business of manufacturing, purchasing, selling, consigning or distributing tobacco products in this State or acting as an affixing agent without having first obtained the appropriate license or licenses for that purpose as prescribed by this chapter.

30 Del. C. 1953, § 5307; 54 Del. Laws, c. 296, § 1; 57 Del. Laws, c. 136, § 23.;

(a) Wholesale license. — For each wholesale license issued there shall be paid the Department of Finance a fee of $200. If a wholesaler sells or intends to sell tobacco products at 2 or more places of business, whether established or temporary, a separate license shall be required for each place of business.

(b) Retail license. — For each retail license there shall be paid to the Department of Finance a fee of $5.00. If a retail dealer sells or intends to sell tobacco products at 2 or more places of business, whether established or temporary, or whether in the same building or not, a separate license shall be required for each place of business.

(c) Vending machine license. — Every vending machine from which tobacco products are offered for sale shall have affixed thereto an identification stamp issued by the State Tax Department for which a fee of $3.00 shall be charged. Where 2 or more vending machines are fastened together, each set of mechanisms shall require a separate vending machine license.

(d) Affixing agent license. — For each affixing agent's license issued there shall be paid to the Department of Finance a fee of $200, but only 1 license fee of $200 shall be required of any person who is both a wholesale dealer and an affixing agent.

30 Del. C. 1953, § 5308; 54 Del. Laws, c. 296, § 1; 57 Del. Laws, c. 136, §§ 22, 23; 57 Del. Laws, c. 188, § 43; 57 Del. Laws, c. 741, § 16C; 60 Del. Laws, c. 506, § 1.;

(a) Every person, desiring to engage in the sale of tobacco products at wholesale, retail or by tobacco product vending machines within this State, except those persons who are exempt under § 5305(d) of this title, and every person desiring to become an affixing agent shall file an application for a license with the Department of Finance. Every application for a tobacco product license shall be made upon a form prescribed, prepared and furnished by the Department and shall set forth the name under which the applicant transacts or intends to transact business, the location of the applicant's place of business, whether within or without the State, whether or not the applicant is the holder of a mercantile or business license in effect when the application is made and, if so, the number of such license and the county for which such license was issued and such other information as the Department may require. If the applicant has or intends to have more than 1 place of business within the State, the application shall state the location of each place of business. If the applicant is an association, the application shall set forth the names and addresses of the persons constituting the association; and if a corporation, the names and addresses of the principal officers thereof and any other information prescribed by the Department for purposes of identification. The application shall be signed and verified by oath or affirmation by the owner, if a natural person, and, in the case of an association, by a member or partner thereof and, in the case of a corporation, by an executive officer thereof, or some person specifically authorized to sign the application, to which shall be attached the written evidence of such person's authority.

(b) A single application may be filed for more than 1 license. The operator of vending machines shall list all locations at which the operator has machines at the time of the application. The operator may also request extra licenses for new machines to be placed in new locations up to 10 percent of the listed locations on file with the Department without submitting actual locations. As the new machines are placed on location for sale of tobacco products, the operator shall immediately notify the Department and the operator shall become eligible to apply for licenses for an additional 10 percent of the operator's new totals. Failure to notify the Department when and where new machines are placed in operation shall give cause for suspension and seizure of all licenses and tobacco product vending machines.

30 Del. C. 1953, § 5309; 54 Del. Laws, c. 296, § 1; 57 Del. Laws, c. 136, § 23; 57 Del. Laws, c. 741, § 16C; 70 Del. Laws, c. 186, § 1.;

Upon approval of the application and payment of the fees, the Department shall issue the proper licenses for each place of business set forth in the application. Every license shall be conspicuously displayed at the place for which issued.

30 Del. C. 1953, § 5310; 54 Del. Laws, c. 296, § 1.;

Every license shall expire on December 31 next succeeding the date upon which it was issued, unless sooner suspended, surrendered, revoked or renewed.

30 Del. C. 1953, § 5311; 54 Del. Laws, c. 296, § 1; 60 Del. Laws, c. 506, § 2.;

Whenever any license issued under this chapter is defaced, destroyed or lost, the Department of Finance may issue a duplicate to the holder of the defaced, destroyed or lost license by the payment of a fee of $1.

30 Del. C. 1953, § 5312; 54 Del. Laws, c. 296, § 1; 57 Del. Laws, c. 741, §§ 16C, 16D.;

The Department of Finance, after a hearing before the Secretary of Finance, may suspend or revoke a license issued pursuant to this chapter whenever it finds that the holder thereof has failed to comply with any of the provisions of this chapter or any regulations of the Department adopted pursuant to § 5329 of this title. Whenever the Department intends to suspend a license for any violation under this chapter, it shall immediately notify the holder in writing, stating the violations charged and giving the licensee the right of a hearing before the Secretary of Finance within 5 days after receipt of such written notice. After such hearing, the Department shall either rescind the notice of the suspension, enforce the suspension or revoke the license. Upon the suspension or revocation of any license, the holder thereof shall forthwith surrender all licenses to the Department issued to the holder under this chapter and no refund of fees shall be paid.

30 Del. C. 1953, § 5313; 54 Del. Laws, c. 296, § 1; 57 Del. Laws, c. 741, §§ 16C, 16D; 70 Del. Laws, c. 186, § 1.;

Any licensed dealer may transfer a license from 1 location to another or from 1 cigarette vending machine to another in accordance with the rules and regulations of the Department.

30 Del. C. 1953, § 5314; 54 Del. Laws, c. 296, § 1.;

(a) Within the time prescribed, every authorized affixing agent shall affix to each pack of tobacco products received by the agent and shall cancel Delaware tobacco product tax stamps to evidence payment of the tax imposed by this chapter, unless such stamps have been affixed to the packs of tobacco products and cancelled before such authorized affixing agent received them.

(b) Stamps in an amount not less than the tax thereon shall be affixed to each pack of tobacco products in such manner that they will be visible to the purchaser. The authorized affixing agent, affixing such stamps, shall cancel them immediately in such manner as may be prescribed by the Department.

30 Del. C. 1953, § 5315; 54 Del. Laws, c. 296, § 1; 57 Del. Laws, c. 136, § 23; 70 Del. Laws, c. 186, § 1.;

(a) Delaware tobacco product tax stamps shall be adhesive stamps, tax meter impressions or other stamps, labels or prints of such designs and denominations as may be prescribed by the Department.

(b) The Department shall make provisions for the sale of Delaware tobacco product tax stamps in such places and at such times as it deems necessary. All stamps shall be paid for at the time of purchase; however, an authorized affixing agent may enter into an agreement with the Department of Finance providing for deferred payment for tobacco product stamps or for amounts added to tobacco product tax meters during a month to a date not later than 30 days from the date of purchase or addition to a cigarette meter; provided, that bond to assure payment is furnished in such amount as required by the Secretary of Finance; and provided, that all amounts due for the month of June shall be paid by June 30. No persons shall purchase tobacco product stamps from any person other than the Department of Finance or its authorized agents, except in accordance with the Finance Department's regulations relating to the stamping of floor stock.

30 Del. C. 1953, § 5316; 54 Del. Laws, c. 296, § 1; 57 Del. Laws, c. 136, § 23; 57 Del. Laws, c. 741, § 16C; 58 Del. Laws, c. 291, § 2.;

(a) Within 72 hours after receipt thereof and prior to the sale of such unstamped tobacco products, unless such tobacco products are exempt by other provisions of this chapter, the authorized affixing agent shall affix the required amount of Delaware tobacco product tax stamps. Whenever any tobacco products are found in the place of business of the authorized affixing agent without the stamps affixed as herein provided, or not segregated or marked as having been received within the preceding 72 hours, or not segregated or marked as exempt from requirement of Delaware tobacco product tax stamp under other provisions of this chapter, a prima facie presumption shall arise that such tobacco products are possessed in violation of this chapter.

(b) Between noon local time and midnight on each July 31 and December 31, no affixing agent shall have in its possession cigarettes without the stamps affixed as herein provided or not segregated or marked as exempt from the requirement of Delaware tobacco product tax stamps and shall accurately report to the Director of Revenue the quantity of cigarettes bearing stamps and the balance remaining in any device used for affixation of stamps at that time. Failure to comply with this provision shall be prima facie cause for suspension or revocation of licenses under § 5313 of this title.

30 Del. C. 1953, § 5317; 57 Del. Laws, c. 136, § 23; 67 Del. Laws, c. 280, § 2; 70 Del. Laws, c. 186, § 1.;

(a) The Department may appoint any manufacturer of tobacco products or wholesaler within this State and may appoint any other person within or without this State as its agent to affix Delaware tobacco product tax stamps. Tax affixing agents located outside the State must apply the stamps to all taxable tobacco products before bringing them into this State.

(b) Whenever the Department shall sell, consign or deliver Delaware tobacco product tax stamps to any authorized stamp affixing agent, such agent shall be entitled to receive as compensation for such agent's services and expenses a commission at the rate of 3/10 of 1 cent for affixing the tax stamp to each package of 20 or more cigarettes. The commission is to be retained out of the moneys to be paid by such agent for such stamps purchased from the Department.

30 Del. C. 1953, § 5318; 54 Del. Laws, c. 296, § 1; 55 Del. Laws, c. 175; 57 Del. Laws, c. 136, § 23; 58 Del. Laws, c. 291, § 3; 65 Del. Laws, c. 118, § 4; 70 Del. Laws, c. 186, § 1.;

If in the judgment of the Department the collection of the excise tax imposed in § 5305 of this title upon tobacco products other than cigarettes will be more efficiently and economically collected by a system which does not employ tax stamps as authorized by this chapter, such alternative system may be utilized by the Department at its discretion. The alternative system may include self-assessment by any wholesale or retail tobacco products dealer on forms supplied by the Department. If instituted, the alternative collection system shall be set forth in the rules and regulations of the Department, which shall be distributed to all affected dealers at least 90 days in advance of the effective date of such rules and regulations.

30 Del. C. 1953, § 5319; 57 Del. Laws, c. 136, § 24.;