<section article="gtg" article_name="Tax - General" number="12-101" title_number="12" title_name="Tobacco Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Cigarette” means any size or shaped roll for smoking that is made of tobacco or tobacco mixed with another ingredient and wrapped in paper or in any other material except tobacco.</text> </level> <level label="c"> <text>“Manufacturer” means a person who acts as a manufacturer as defined in § 16–201 of the Business Regulation Article or as an other tobacco products manufacturer as defined in § 16.5–101 of the Business Regulation Article.</text> </level> <level label="d"> <text>“Other tobacco product” has the meaning stated for “other tobacco products” in § 16.5–101 of the Business Regulation Article.</text> </level> <level label="e"> <text>“Other tobacco products retailer” means a person authorized under § 16.5–205(b) of the Business Regulation Article to purchase other tobacco products on which the tobacco tax has not been paid.</text> </level> <level label="f"> <text>“Out–of–state seller” means a person:</text> <level label="1"> <text>located outside the State that sells, holds for sale, ships, or delivers premium cigars or pipe tobacco to consumers in the State if, during the previous calendar year or the current calendar year:</text> <level label="i"> <text>the person’s gross revenue from the sale of premium cigars or pipe tobacco in the State exceeds $100,000; or</text> </level> <level label="ii"> <text>the person sold premium cigars or pipe tobacco into the State in 200 or more separate transactions; and</text> </level> </level> <level label="2"> <text>who is required to hold a remote tobacco seller license under Title 16.9 of the Business Regulation Article.</text> </level> </level> <level label="g"> <text>“Pipe tobacco” has the meaning stated in § 16.5–101 of the Business Regulation Article.</text> </level> <level label="h"> <text>“Premium cigars” has the meaning stated in § 16.5–101 of the Business Regulation Article.</text> </level> <level label="i"> <text>“Sell” means to exchange or transfer, or to make an agreement to exchange or transfer, title or possession of property, in any manner or by any means, for consideration.</text> </level> <level label="j"> <text>“Tax stamp” means a device in the design and denomination that the Comptroller authorizes by regulation for the purpose of being affixed to a package of cigarettes as evidence that the tobacco tax is paid.</text> </level> <level label="k"> <text>“Tobacconist” means a person authorized under § 16.5–205(e) of the Business Regulation Article to purchase other tobacco products on which the tobacco tax has not been paid.</text> </level> <level label="l"> <text>“Unstamped cigarettes” means a package of cigarettes to which tax stamps are not affixed in the amount and manner required in § 12–304 of this title.</text> </level> <level label="m"> <text>“Wholesale price” means the price for which a wholesaler buys other tobacco products, exclusive of any discount, trade allowance, rebate, or other reduction.</text> </level> <level label="n"> <text>“Wholesaler” means, unless the context requires otherwise, a person who acts as a wholesaler as defined in § 16–201 of the Business Regulation Article or as an other tobacco products wholesaler as defined in § 16.5–101 of the Business Regulation Article.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="12-102" title_number="12" title_name="Tobacco Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>Except as provided in § 12–104 of this subtitle, a tax is imposed on cigarettes and other tobacco products in the State.</text> </level> <level label="b"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, a county, municipal corporation, special taxing district, or other political subdivision of the State may not impose a tax on cigarettes, other tobacco products, or electronic smoking devices as defined under § 16.7–101 of the Business Regulation Article.</text> </level> <level label="2"> <text>If a county imposed a tax on electronic smoking devices on January 1, 2020, the county may continue to impose a tax on electronic smoking devices at the same rate that was in effect on January 1, 2020.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="12-103" title_number="12" title_name="Tobacco Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>A rebuttable presumption exists that any cigarette or other tobacco product in the State is subject to the tobacco tax.</text> </level> <level label="b"> <text>Cigarettes or other tobacco products are contraband tobacco products if they:</text> <level label="1"> <text>are possessed or sold in the State in a manner that is not authorized under this title or under Title 16, Title 16.5, or Title 16.9 of the Business Regulation Article; or</text> </level> <level label="2"> <text>are transported by vehicle in the State by a person who does not have, in the vehicle, the records required by § 16–219 or § 16.5–215 of the Business Regulation Article for the transportation of cigarettes or other tobacco products.</text> </level> </level> <level label="c"> <text>A person who possesses cigarettes or other tobacco products has the burden of proving that the cigarettes or other tobacco products are not subject to the tobacco tax.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="12-104" title_number="12" title_name="Tobacco Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>“Consumer” means a person who possesses cigarettes or other tobacco products for a purpose other than selling or transporting the cigarettes or other tobacco products.</text> </level> <level label="b"> <text>The tobacco tax does not apply to:</text> <level label="1"> <text>cigarettes that a licensed wholesaler under Title 16 of the Business Regulation Article is holding for sale outside the State or to a United States armed forces exchange or commissary;</text> </level> <level label="2"> <text>other tobacco products that an other tobacco products wholesaler licensed under Title 16.5 of the Business Regulation Article is holding for sale outside the State or to a United States armed forces exchange or commissary; or</text> </level> <level label="3"> <text>cigarettes or other tobacco products that:</text> <level label="i"> <text>a consumer brings into the State:</text> <level label="1"> <text>if the quantity brought from another state does not exceed other tobacco products having a retail value of $100 or 5 cartons of cigarettes; or</text> </level> <level label="2"> <text>if the quantity brought from a United States armed forces installation or reservation does not exceed other tobacco products having a retail value of $100 or 5 cartons of cigarettes;</text> </level> </level> <level label="ii"> <text>a person is transporting by vehicle in the State if the person has, in the vehicle, the records required by § 16–219 or § 16.5–215 of the Business Regulation Article for the transportation of cigarettes or other tobacco products; or</text> </level> <level label="iii"> <text>are held in storage in a licensed storage warehouse on behalf of a licensed cigarette manufacturer or an other tobacco products manufacturer.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="12-105" title_number="12" title_name="Tobacco Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>The tobacco tax rate for cigarettes is:</text> <level label="1"> <text>$5.00 for each package of 20 cigarettes; and</text> </level> <level label="2"> <text>25 cents for each cigarette in a package of more than 20 cigarettes.</text> </level> </level> <level label="b"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, the tobacco tax rate for other tobacco products is 60% of the wholesale price of the tobacco products.</text> </level> <level label="2"> <level label="i"> <text>In this paragraph, “pipe tobacco” and “premium cigars” have the meanings stated in § 16.5–101 of the Business Regulation Article.</text> </level> <level label="ii"> <level label="1"> <text>Except as provided in subsubparagraph 2 of this subparagraph, the tobacco tax rate for cigars is 70% of the wholesale price of the cigars.</text> </level> <level label="2"> <text>The tobacco tax rate for premium cigars is 15% of:</text> </level> <level label="A"> <text>the wholesale price of the premium cigars; or</text> </level> <level label="B"> <text>for premium cigars sold by an out–of–state seller, the price determined under subsection (c) of this section.</text> </level> </level> <level label="iii"> <text>The tobacco tax rate for pipe tobacco is 30% of:</text> <level label="1"> <text>the wholesale price of the pipe tobacco; or</text> </level> <level label="2"> <text>for pipe tobacco sold by an out–of–state seller, the price determined under subsection (c) of this section.</text> </level> </level> </level> </level> <level label="c"> <level label="1"> <text>For premium cigars and pipe tobacco sold by an out–of–state seller, the tobacco tax rate applies to:</text> <level label="i"> <text>the actual price paid by an out–of–state seller for a stock keeping unit; or</text> </level> <level label="ii"> <text>if the actual price paid by an out–of–state seller for a stock keeping unit is not available, the average of the actual price paid by an out–of–state seller for a stock keeping unit over the 12 calendar months before January 1 of the year in which the sale occurs.</text> </level> </level> <level label="2"> <text>The Comptroller shall adopt regulations to implement this subsection.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="12-201" title_number="12" title_name="Tobacco Tax" subtitle_number="2" subtitle_name="Returns and Records"> <level label="a"> <text>A manufacturer shall complete and file with the Comptroller a tobacco tax return:</text> <level label="1"> <text>on or before the 15th day of the month that follows the month in which the manufacturer distributes in the State free sample cigarettes of the manufacturer; and</text> </level> <level label="2"> <text>if the Comptroller so specifies, by regulation, on other dates for each month in which the manufacturer does not distribute any sample cigarettes.</text> </level> </level> <level label="b"> <text>A licensed other tobacco products manufacturer shall file the information return that the Comptroller requires.</text> </level> <level label="c"> <text>A licensed storage warehouse operator and a licensed other tobacco products storage warehouse operator shall file the information return that the Comptroller requires.</text> </level> <level label="d"> <text>An out–of–state seller shall file the information return that the Comptroller requires.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="12-202" title_number="12" title_name="Tobacco Tax" subtitle_number="2" subtitle_name="Returns and Records"> <level label="a"> <text>A wholesaler shall complete and file with the Comptroller a tobacco tax return:</text> <level label="1"> <text>for cigarettes:</text> <level label="i"> <text>on or before the 21st day of the month that follows the month in which the wholesaler has the first possession, in the State, of unstamped cigarettes for which tax stamps are required; and</text> </level> <level label="ii"> <text>if the Comptroller so specifies, by regulation, on other dates for each month in which the wholesaler does not have the first possession of any unstamped cigarettes in the State; and</text> </level> </level> <level label="2"> <text>for other tobacco products, on or before the 21st day of the month that follows the month in which the wholesaler has possession of other tobacco products on which the tobacco tax has not been paid.</text> </level> </level> <level label="b"> <text>Each return shall state the quantity of cigarettes or the wholesale price of other tobacco products sold during the period that the return covers.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="12-202.1" title_number="12" title_name="Tobacco Tax" subtitle_number="2" subtitle_name="Returns and Records"> <text>For periods beginning after December 31, 2026, a person shall file a tobacco tax return electronically. </text> </section> <section article="gtg" article_name="Tax - General" number="12-203" title_number="12" title_name="Tobacco Tax" subtitle_number="2" subtitle_name="Returns and Records"> <level label="a"> <text>Each wholesaler shall:</text> <level label="1"> <text>keep an invoice for each purchase of tax stamps;</text> </level> <level label="2"> <text>maintain a daily record of the tax stamps affixed to cigarette packages; and</text> </level> <level label="3"> <text>maintain a complete and accurate record of each sale of cigarettes or other tobacco products for resale outside of the State.</text> </level> </level> <level label="b"> <text>A wholesaler shall:</text> <level label="1"> <text>keep the records required under subsection (a) of this section for a period of 6 years or for a shorter period that the Comptroller authorizes; and</text> </level> <level label="2"> <text>allow the Comptroller or the Executive Director to examine the records.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="12-204" title_number="12" title_name="Tobacco Tax" subtitle_number="2" subtitle_name="Returns and Records"> <level label="a"> <text>The Comptroller shall adopt regulations that:</text> <level label="1"> <text>require an out–of–state seller to maintain records of the cost of premium cigars and pipe tobacco acquired for sale into the State; and</text> </level> <level label="2"> <text>specify the period for which an out–of–state seller must maintain the records required under item (1) of this subsection.</text> </level> </level> <level label="b"> <text>An out–of–state seller shall allow the Comptroller or the Executive Director to examine the records maintained in accordance with subsection (a) of this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="12-301" title_number="12" title_name="Tobacco Tax" subtitle_number="3" subtitle_name="Tax Payment"> <text>In this subtitle, “licensed wholesaler” means a wholesaler who is licensed under Title 16, Subtitle 2 of the Business Regulation Article to act as a wholesaler or under Title 16.5, Subtitle 2 of the Business Regulation Article to act as an other tobacco products wholesaler.</text> </section> <section article="gtg" article_name="Tax - General" number="12-302" title_number="12" title_name="Tobacco Tax" subtitle_number="3" subtitle_name="Tax Payment"> <level label="a"> <text>A manufacturer of sample cigarettes shall pay the tobacco tax on those cigarettes distributed in the State without charge, in the manner that the Comptroller requires by regulation, with the return that covers the period in which the manufacturer distributed those cigarettes.</text> </level> <level label="b"> <text>The wholesaler who first possesses in the State unstamped cigarettes for which tax stamps are required shall pay the tobacco tax on those cigarettes by buying and affixing tax stamps.</text> </level> <level label="c"> <text>The tobacco tax on other tobacco products shall be paid by the wholesaler who sells the other tobacco products to a retailer in the State.</text> </level> <level label="d"> <level label="1"> <text>A licensed other tobacco products retailer or a licensed tobacconist shall pay the tobacco tax on other tobacco products on which the tobacco tax has not been paid by filing a quarterly tax return, with any supporting schedules, on forms provided by the Comptroller on the following dates covering tax liabilities in the preceding quarter:</text> <level label="i"> <text>January 21;</text> </level> <level label="ii"> <text>April 21;</text> </level> <level label="iii"> <text>July 21; and</text> </level> <level label="iv"> <text>October 21.</text> </level> </level> <level label="2"> <text>A licensed other tobacco products retailer or a licensed tobacconist required to file a tax return under paragraph (1) of this subsection shall pay a tobacco tax at the rate provided in § 12–105(b) of this title based on the invoice amount charged by the licensed other tobacco products manufacturer, exclusive of any discount, trade allowance, rebate, or other reduction.</text> </level> </level> <level label="e"> <level label="1"> <text>An out–of–state seller shall pay the tobacco tax on pipe tobacco or premium cigars on which the tobacco tax has not been paid.</text> </level> <level label="2"> <text>An out–of–state seller shall pay the tobacco tax on pipe tobacco and premium cigars by filing a tax return, with any supporting schedules, on forms provided by the Comptroller:</text> <level label="i"> <text>on or before the 21st day of the month after a sale of premium cigars or pipe tobacco is made; or</text> </level> <level label="ii"> <text>on dates specified by the Comptroller by regulation.</text> </level> </level> <level label="3"> <text>For the period that the return covers, the return shall state:</text> <level label="i"> <text>the stock keeping unit number for any premium cigars and pipe tobacco sold; and</text> </level> <level label="ii"> <text>for each stock keeping unit:</text> <level label="1"> <text>the quantity of premium cigars and pipe tobacco sold during the return period; and</text> </level> <level label="2"> <text>the price of the premium cigars and pipe tobacco sold, as determined under § 12–105(c) of this title.</text> </level> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="12-303" title_number="12" title_name="Tobacco Tax" subtitle_number="3" subtitle_name="Tax Payment"> <level label="a"> <level label="1"> <text>A licensed wholesaler may buy tax stamps, in the manner and at the time that the Comptroller requires by regulation.</text> </level> <level label="2"> <text>Tax stamps may not be bought from a person other than the Comptroller unless the buyer:</text> <level label="i"> <text>has written permission from the Comptroller to do so; or</text> </level> <level label="ii"> <text>is acting in accordance with the regulations of the Comptroller for stamping floor stock.</text> </level> </level> </level> <level label="b"> <text>The Comptroller shall allow a licensed wholesaler a discount of 0.82% of the purchase price of tax stamps.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="12-304" title_number="12" title_name="Tobacco Tax" subtitle_number="3" subtitle_name="Tax Payment"> <level label="a"> <text>A manufacturer that pays the tobacco tax shall indicate prominently on each package of cigarettes that:</text> <level label="1"> <text>the package contains sample cigarettes that are not for sale; and</text> </level> <level label="2"> <text>all applicable tobacco taxes on those cigarettes have been paid.</text> </level> </level> <level label="b"> <level label="1"> <text>Except as provided in subsection (c) of this section, within 72 hours after receiving cigarettes in the State and before selling or attempting to sell the cigarettes, a licensed wholesaler who first possesses the cigarettes shall affix, to the smallest cigarette package, tax stamps:</text> <level label="i"> <text>in a total amount that at least equals the tobacco tax due on the number of cigarettes in the package; and</text> </level> <level label="ii"> <text>in the manner that the Comptroller requires, including placing the tax stamps on the cigarette package so that the stamps are visible to a buyer.</text> </level> </level> <level label="2"> <text>If a tax stamp has been affixed to a package of cigarettes, a person may not affix the same tax stamp to another package of cigarettes.</text> </level> </level> <level label="c"> <text>A licensed wholesaler is not required to affix tax stamps to:</text> <level label="1"> <text>sample cigarettes if the cigarette package is marked in accordance with subsection (a) of this section; or</text> </level> <level label="2"> <text>cigarettes that are segregated or marked to indicate that the cigarettes:</text> <level label="i"> <text>were received within the immediately preceding 72 hours; or</text> </level> <level label="ii"> <text>are being held for a sale or use that is exempt under this title.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>Except as provided in subsection (c)(2) of this section, a rebuttable presumption exists that any unstamped cigarettes in the possession of a licensed wholesaler are possessed in violation of this title.</text> </level> <level label="2"> <text>The licensed wholesaler who possesses unstamped cigarettes has the burden of proving that the cigarettes are not possessed in violation of this title.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="12-305" title_number="12" title_name="Tobacco Tax" subtitle_number="3" subtitle_name="Tax Payment"> <level label="a"> <text>Unless otherwise authorized under this title, a person may not possess, sell, or attempt to sell unstamped cigarettes in the State.</text> </level> <level label="b"> <text>A person may not make, cause to be made, or procure an altered or counterfeited tax stamp.</text> </level> <level label="c"> <text>A person may not knowingly or willfully use, transfer, or possess an altered or counterfeited tax stamp.</text> </level> </section>