{"data":{"id":"us-ky/krs-138.132","jurisdiction":"us-ky","citation":"KRS 138.132","heading":"Contraband products -- Property used in substantial connection with","body":"knowing violation of KRS 138.130 to 138.205 -- Seizure -- Sale -- Remission of\nforfeiture -- Appeal.\n(1) It is the declared legislative intent of KRS 138.130 to 138.205  that any untax-paid\ntobacco products or vapor products held, owned, possessed, or in control of any\nperson other than as provided in KRS 138.130 to 138.205 are contraband and\nsubject to seizure and forfeiture as set out in this section.\n(2) (a) If a retai ler, who is not a licensed retail distributor, purchases tobacco\nproducts or vapor products from a licensed distributor and the purchase\ninvoice does not contain the separate identification and display of the tobacco\nproducts tax or vapor products tax, the  retailer shall, within twenty -four (24)\nhours, notify the department in writing.\n(b) The notification shall include the name and address of the person from whom\nthe tobacco products or vapor products were purchased and a copy of the\npurchase invoice.\n(c) The tobacco products or vapor products for which the required information\nwas not included on the invoice shall be retained by the retailer, and not sold,\nfor a period of fifteen (15) days after giving the proper notice as required by\nthis subsection.\n(d) After the fifteen (15) day period, the retailer may pay the tax due on the\ntobacco products or vapor products described in paragraph (c) of this\nsubsection according to administrative regulations promulgated by the\ndepartment, and after which may proceed to sell the tobacco products or vapor\nproducts.\n(3) If a retailer, who is not a licensed retail distributor, purchases tobacco products or\nvapor products for resale from a person not licensed under KRS 138.195(7), which\nis prohibited by KRS 138.140(2), the retailer may not sell those tobacco products or\nvapor products until the retailer applies for and is granted a retail distributor's\nlicense under KRS 138.195(7)(b).\n(4) If, upon examination, the department determines that the retailer has failed to\ncomply with the provisions of subsection (3) of this section, the retailer shall pay all\ntax and interest and applicable penalties due and the following shall apply:\n(a) For the first offense, an additional penalty shall be assessed equal to ten\npercent (10%) of the tax due;\n(b) For a second offense within three (3) years or less of the first offense, an\nadditional penalty shall be assessed equal to twenty -five percent (25%) of the\ntax due; and\n(c) For a third offense or subsequent offense within three (3) years o r less of the\nfirst offense, the tobacco products or vapor products shall be contraband and\nsubject to seizure and forfeiture as provided in subsection (5) of this section.\n(5) (a) Whenever a representative of the department finds contraband tobacco\nproducts or contraband vapor products within the borders of this state, the\ntobacco products or vapor products shall be immediately seized and stored in\na depository to be determined by the representative.\n(b) At the time of seizure, the representative shall del iver to the person in whose\ncustody the tobacco products or vapor products are found a receipt for the\nseized products. The receipt shall state on its face that any inquiry concerning\nany tobacco products or vapor products seized shall be directed to the\ncommissioner of the Department of Revenue, Frankfort, Kentucky.\n(c) Immediately upon seizure, the representative shall notify the commissioner of\nthe nature and quantity of the tobacco products or vapor products seized. Any\nseized tobacco products or vapor products shall be held for a period of twenty\n(20) days, and if aft er that period no person has claimed the tobacco products\nor vapor products as his or her property, the commissioner shall cause the\ntobacco products or vapor products to be destroyed.\n(6) All fixtures, equipment, materials, and personal property used in s ubstantial\nconnection with the sale or possession of tobacco products or vapor products\ninvolved in a knowing and intentional violation of KRS 138.130 to 138.205 shall be\ncontraband and subject to seizure and forfeiture as follows:\n(a) The department's representative shall seize the property and store the property\nin a safe place selected by the representative; and\n(b) The representative shall proceed as provided in KRS 138.165(2). The\ncommissioner shall cause the property to be sold after notice published\npursuant to KRS Chapter 424. The proceeds from the sale shall be applied as\nprovided in KRS 138.165(2).\n(7) The owner or any person having an interest in the fixtures, materials, or personal\nproperty that has been seized as provided by subsection (6) of th is section may\napply to the commissioner for remission of the forfeiture for good cause shown. If it\nis shown to the satisfaction of the commissioner that the owner or person having an\ninterest in the property was without fault, the department shall remit the forfeiture.\n(8) Any party aggrieved by an order entered under this section may appeal to the Board\nof Tax Appeals pursuant to KRS 49.220.","path":["KRS Chapter 138"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=51510","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:29Z","sha256":"7a71b4ae2df5f0982d87be8f3b4373e41a257d2ea11c28c79d5319ecc5a7b3eb","source_id":"us-ky","stale":false,"prev":"us-ky/krs-138.130","next":"us-ky/krs-138.135"},"notice":"GroundRules: Original legal text. Not legal advice."}