Q & A on the Cigarette Tax Increase That is Effective March 15, 2003, for Licensed Cigarette Distributors
Purpose: This Informational Publication describes recently enacted legislation increasing the cigarette tax rate effective March 15, 2003. The legislation also imposes a tax, as of the close of business on March 14, 2003, on each licensed cigarette distributor’s inventory of packages of cigarettes, including those in cartons, that have an old cigarette tax stamp attached.
Effective Date: March 15, 2003.
Statutory Authority: Conn. Gen. Stat. §§12-296 and 12-316, as amended by 2003 House Bill No. 6495, §§29 and 30; and §31 of the same bill.
Tax Rate Increase: The cigarette tax rate will increase from 55.5 mills to 75.5 mills per cigarette on March 15, 2003.
|Packages||Tax before 3-15-2003||Tax on or after 3-15-2003|
|20 cigarettes per package||
|25 cigarettes per package||1.3875||1.8875|
|Cartons||Tax before 3-15-2003||Tax on or after 3-15-2003|
|5 packs per carton (20s)||$5.55||$7.55|
|10 packs per carton (20s)||11.10||15.10|
|8 packs per carton (25s)||11.10||15.10|
|10 packs per carton (25s)||13.875||18.875|
Tax on Cigarette Inventory as of Close of Business on March 14, 2003: As of the close of business on March 14, 2003, if you have any packages of cigarettes, including those in cartons, that have an old cigarette tax stamp attached to them, you are liable for a tax (known as a floor tax) on those packages. The floor tax is the difference between the old cigarette tax rate and the new cigarette tax rate.
Close of Business on March 14, 2003: If your business closes after 11:59 p.m. on March 14, 2003, you must take the cigarette inventory as of 11:59 p.m. on March 14, 2003.
1. When do I take the inventory of packages of cigarettes that have old cigarette tax stamps attached?
Old cigarette tax stamp means either a green $1.11 Connecticut cigarette tax stamp (for packages of 20 cigarettes) or a blue $1.3875 Connecticut cigarette tax stamp (for packages of 25 cigarettes).
2. Am I required to purchase and affix floor tax stamps to packages of cigarettes in inventory as of the close of business on March 14, 2003?
3. What if I have packages of cigarettes in inventory at the close of business on March 14, 2003, that have new cigarette tax stamps already attached?
4. When do I file form AU-930?
You must file the original form AU-930 and pay the tax to DRS no later than April 15, 2003. You must file form AU-930 whether or not you have packages of cigarettes in your inventory that have old cigarette tax stamps attached. If you fail to file form AU-930 with DRS on or before April 15, 2003, your dealer’s license may be revoked.
5. When do I pay the floor tax?
Make your check payable to Commissioner of Revenue Services and remit the tax with form AU-930 on or before April 15, 2003. Mail your payment and form AU-930 to:
Department of Revenue Services
PO Box 2997
Hartford CT 06104-2997
6. What if I do not comply with the requirements described in this Informational Publication?
7. How do I report those who are in violation of the law? Additional Information for Stampers:
Additional Information for Stampers:
8. When will the new cigarette tax stamps be available for purchase?
Continue to use your existing invoice book to purchase cigarette stamps until you are issued a new invoice book with the new rates. Old cigarette tax stamps and new cigarette tax stamps may not be ordered on the same invoice. Stampers must use one invoice for old cigarette tax stamps purchases and a separate invoice for new cigarette tax stamps purchases.
Use the following lines to purchase old cigarette tax stamps:
Use Line 1 for packages of 20 @ $1.11
Use Line 2 for packages of 25 @ $1.3875
Use the following lines to purchase new cigarette tax stamps (on a separate invoice):
Use Line 3 for packages of 20 @ $1.51
Use Line 4 for packages of 25 @ $1.8875
9. How long will the old cigarette tax stamps be available for purchase?
10. How does a distributor return unaffixed old cigarette tax stamps?
11. Will the monthly reports for distributors be revised? The following monthly reports that stampers are required to file with DRS for the month of March 2003 are being revised by DRS to cover the periods March 1, 2003, through March 14, 2003, and March 15, 2003, through March 31, 2003, respectively, and will be mailed by DRS to stampers:
Form CT-15, Monthly Tax Stamp and Cigarette Report/Resident Distributor
Form CT-31, Cigarette and Unaffixed Stamp Inventory Report for Resident Distributors
Form CT-39, Record of Cigarette Stamps Purchased/Resident Distributor
- Form CT-15A, Monthly Tax Stamp and Cigarette Report/Nonresident Distributor
- Form CT-31A, Cigarette and Unaffixed Stamp Inventory Report for Nonresident Distributors
- Form CT-38, Record of Cigarette Stamps Purchased/Nonresident Distributor
12. Should distributors who stamp cigarettes increase their surety bond?
12. Should distributors who stamp cigarettes increase their surety bond?Due to the cigarette tax increase, each stamper may wish to consider increasing the amount of its surety bond. In general, a stamper’s purchases of cigarette tax stamps on credit may not exceed the amount of the stamper’s surety bond.
Effect on Other Documents: None affected.
Effect of This Document: An Informational Publication is a document issued by DRS that addresses frequently asked questions about a current position, policy, or practice, usually in a less technical question and answer format.
For Further Information: Please call DRS Monday through Friday:
1-800-382-9463 (in-state), or
860-297-5962 (from anywhere)
TTY, TDD, and Text Telephone users only may transmit inquiries 24 hours a day by calling 860-297-4911.
Forms and Publications: Forms and publications are available all day, seven days a week:
Internet: Preview and download forms and publications from the DRS Web site: http://www.ct.gov/drs
Telephone: Call 860-297-4753 (from anywhere), or 1-800-382-9463 (in-state) and select Option 2 from a touch-tone phone.
Paperless Filing Method (fast, easy, free, and confidential):
For business returns: Use Fast-File to electronically file sales and use taxes, business use tax, room occupancy tax, or withholding tax returns over the internet or telephone. Visit the DRS Web site at: http://www.ct.gov/drs and click on Fast-File Program.
For resident income tax returns: Use WebFile to file personal income tax returns over the Internet. Visit the DRS Web site at: http://www.ct.gov/drs and click on Income Tax WebFiling.