{"data":{"id":"us-ky/krs-138.146","jurisdiction":"us-ky","citation":"KRS 138.146","heading":"Evidence of cigarette tax payments -- Administrative regulation -- When","body":"payment for units of cigarette tax evidence shall be made -- Consequence of\nfailure to make timely payment.\n(1) The cigarette tax shall be due when any licensed wholesaler or unclassified acquirer\ntakes possession within this state of untax-paid cigarettes.\n(2) (a) The cigarette tax shall be paid by the purchase of stamps by a resident\nwholesaler within forty -eight (48) hours after the wholesaler receives the\ncigarettes.\n(b) A stamp shall be affixed to each package of an aggregate denomination not\nless than the amount of the cigarette tax on the package.\n(c) The affixed stamp shall be prima facie evidence of payment of the cigarette\ntax.\n(d) Unless stamps have been prev iously affixed, they shall be affixed by each\nresident wholesaler prior to the delivery of any cigarettes to a retail location or\nany person in this state.\n(e) The evidence of cigarette tax payment shall be affixed to each individual\npackage of cigarettes by a nonresident wholesaler prior to the introduction or\nimportation of the cigarettes into the territorial limits of this state.\n(f) The evidence of cigarette tax payment shall be affixed by an unclassified\nacquirer within twenty-four (24) hours after the  cigarettes are received by the\nunclassified acquirer.\n(3) (a) The department shall, by an administrative regulation promulgated in\naccordance with KRS Chapter 13A, prescribe the form of cigarette tax\nevidence, the method and manner of the sale and distrib ution of cigarette tax\nevidence, and the method and manner that tax evidence shall be affixed to the\ncigarettes.\n(b) All cigarette tax evidence prescribed by the department shall be designed and\nfurnished in a fashion to permit identification of the person that affixed the\ncigarette tax evidence to the particular package of cigarettes, by means of\nnumerical rolls or other mark on the cigarette tax evidence.\n(c) The department shall maintain for at least three (3) years information\nidentifying the person that affixed the cigarette tax evidence to each package\nof cigarettes. This information shall not be kept confidential o r exempt from\ndisclosure to the public through open records.\n(4) (a) Units of cigarette tax evidence shall be sold at their face value, but the\ndepartment shall allow as compensation to any licensed wholesaler an amount\nof tax evidence equal to a proportio nate rate of one and one -half cents\n($0.015) on each twenty (20) cigarettes.\n(b) The department shall have the power to withhold compensation as provided in\nparagraph (a) of this subsection from any licensed wholesaler for failure to\nabide by any provision s of KRS 138.130 to 138.205 or any administrative\nregulations promulgated thereunder. Any refund or credit for unused cigarette\ntax evidence shall be reduced by the amount allowed as compensation at the\ntime of purchase.\n(5) (a) Payment for units of cigarette tax evidence shall be made at the time the units\nare sold, unless the licensed wholesaler:\n1. Has filed with the department a bond, issued by a corporation authorized\nto do surety business in Kentucky, in an amount:\na. Determined by the department; or\nb. i. Not less than the monthly average of payments by the\nwholesaler for the units of cigarette tax evidence purchased\nin the immediately preceding calendar year, which may be\ndelayed under paragraph (b) of this subsection; and\nii. No greater than ten million dollars ($10,000,000); and\n2. Has registered and agrees to make the payment of tax to the department\nelectronically.\nThe licensed wholesaler shall not be allowed to delay any payment for units\nof cigarette tax evidence, including tax, penalty, intere st, or collection fees,\nwhich would exceed the amount of bond filed with the department.\n(b) Except as provided in paragraph (c) of this subsection, if the licensed\nwholesaler qualifies under paragraph (a) of this subsection, the licensed\nwholesaler shall have ten (10) days from the date of purchase to remit\npayment of cigarette tax, without the assessment of civil penalties under KRS\n131.180 or interest under KRS 131.183 during the ten (10) day period.\n(c) 1. The ten (10) day payment period under paragraph  (b) of this subsection\nshall not apply to the payment for units of cigarette tax evidence during\nthe last ten (10) days of the month of June during each fiscal year.\n2. All payments for units of cigarette tax evidence made under paragraph\n(b) of this subsection during the month of June shall be made the earlier\nof:\na. The ten (10) day period; or\nb. June 25.\n(d) If the licensed wholesaler does not make the payment of cigarette tax within\nthe ten (10) day period, or within the period of time under paragraph (c) of\nthis subsection, the department shall:\n1. Revoke the license required under KRS 138.195;\n2. Issue a demand for payment in an amount equal to the cigarette tax\nevidence purchased, plus all penalties, interest, and collection fees\napplicable, up to the amount of the required bond; and\n3. Require immediate payment of the bond.\n(6) (a) The bond required under subsection (5) of this section shall be on a form and\nwith a surety approved by the department.\n(b) The licensed wholesaler shall be named as the p rincipal obligor and the\ndepartment shall be named as the obligee within the bond.\n(c) The bond shall be conditioned upon the payment by the licensed wholesaler of\nall cigarette tax imposed by the Commonwealth.\n(d) The provisions of KRS 131.110 shall not apply to the demand for payment\nrequired under subsection (5)(c)2. of this section.\n(7) (a) Tax evidence shall not be affixed or used in any way by any person other than\nthe person purchasing the tax evidence from the department.\n(b) Tax evidence shall not be transferred or negotiated, and shall not, by any\nscheme or device, be given, bartere d, sold, traded, or loaned to any other\nperson.\n(c) Unaffixed tax evidence may be returned to the department for credit or refund\nfor any reason satisfactory to the department.\n(8) (a) In the event any retailer takes possession of cigarettes to which evide nce of\nKentucky tax payment is not properly affixed, the retailer shall, within\ntwenty-four (24) hours, notify the department of the receipt.\n(b) The notification to the department shall be in writing, stating the name of the\nperson from whom the cigarette s were received and the quantity of those\ncigarettes.\n(c) The written notice may be:\n1. Given to any field agent of the department; or\n2. Directed to the commissioner of the Department of Revenue, Frankfort,\nKentucky.\n(d) If the notice is given by means of  the United States mail, it shall be sent by\ncertified mail.\n(e) Any cigarettes to which evidence of Kentucky tax payment is not properly\naffixed shall be retained by the retailer, and not sold, for a period of fifteen\n(15) days after giving the notice provided in this subsection.\n(f) The retailer may, at the retailer's option, pay the tax due on those cigarettes\naccording to administrative regulations prescribed by the department, and\nproceed to sell those cigarettes after the payment.\n(9) (a) Cigarettes stamped with the cigarette tax evidence of another state shall at no\ntime be commingled with cigarettes on which the Kentucky cigarette tax\nevidence has been affixed.\n(b) Any licensed wholesaler, licensed subjobber, or licensed vending machine\noperator may hold cigarettes stamped with the tax evidence of another state\nfor any period of time, subsection (2) of this section notwithstanding.","path":["KRS Chapter 138"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57931","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:29Z","sha256":"caf406fde22a92043a1ebdbd59fd3a702e6f6dc9cd05e4e671bb3b0ae19755be","source_id":"us-ky","stale":false,"prev":"us-ky/krs-138.145","next":"us-ky/krs-138.150"},"notice":"GroundRules: Original legal text. Not legal advice."}