Nebraska State Statutes (as of 4/24/07)

Tobacco Products Tax Act

Contact: Nebraska Department of Revenue

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Section 77-4001
Act, how cited.

Sections 77-4001 to 77-4025 shall be known and may be cited as the Tobacco Products Tax Act.

Source:

Laws 1987, LB 730, ? 1

Section 77-4002
Definitions; where found.

For purposes of the Tobacco Products Tax Act, unless the context otherwise requires, the definitions found in sections 77-4003 to 77-4007 shall be used.

Source:

Laws 1987, LB 730, ? 2

Section 77-4003
Cancel, defined.

Cancel shall mean to discontinue for up to five years all rights and privileges under a license.

Source:

Laws 1987, LB 730, ? 3

Section 77-4004
First owner, defined.

First owner shall mean any person:

(1) Engaged in the business of selling tobacco products in this state who brings or causes to be brought into this state from outside this state any tobacco products for sale in this state, including a retailer who purchases directly from suppliers outside this state who are not licensed pursuant to subsection (2) of section 77-4009;

(2) Who makes, manufactures, or fabricates tobacco products in this state for sale in this state; or

(3) Engaged in business outside this state who ships or transports tobacco products to retailers in this state and who becomes licensed pursuant to subsection (2) of section 77-4009.

Source:

Laws 1987, LB 730, ? 4

Section 77-4005
Revoke, defined.

Revoke shall mean to permanently void and recall all rights and privileges of a person to obtain a license.

Source:

Laws 1987, LB 730, ? 5

Section 77-4006
Suspend, defined.

Suspend shall mean to temporarily interrupt for up to one year all rights and privileges under a license.

Source:

Laws 1987, LB 730, ? 6

Section 77-4007
Tobacco products, defined.

Tobacco products shall mean (1) cigars, (2) cheroots, (3) stogies, (4) periques, (5) granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, (6) snuff, (7) snuff flour, (8) cavendish, (9) plug and twist tobacco, (10) fine cut and other chewing tobacco, (11) shorts, refuse scraps, clippings, cuttings, and sweepings of tobacco, and (12) other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise or both for chewing and smoking, except that tobacco products shall not mean cigarettes as defined in section 77-2601.

Source:

Laws 1987, LB 730, ? 7

Section 77-4008
Tax imposed; payment.

(1) A tax is hereby imposed upon the first owner of tobacco products to be sold in this state. The tax shall be twenty percent of (a) the purchase price of such tobacco products paid by the first owner or (b) the price at which a first owner who made, manufactured, or fabricated the tobacco product sells the items to others. Such tax shall be in addition to all other taxes.

(2) Whenever any person who is licensed under section 77-4009 purchases tobacco products from another person licensed under section 77-4009, the seller shall be liable for the payment of the tax.

(3) On and after October 1, 2002, and continuing until October 1, 2004, the Tax Commissioner shall remit the amount collected pursuant to this section to the State Treasurer, and the State Treasurer shall credit three-fourths of such amount to the General Fund and one-fourth of such amount to the Cash Reserve Fund. On and after October 1, 2004, amounts collected shall be used and distributed pursuant to section 77-4025.

Source:

Laws 1987, LB 730, ? 8
Laws 2002, LB 1085, ? 20
Laws 2003, LB 759, ? 24

Section 77-4009
License required; when; application; contents.

(1) Each first owner of tobacco products to be sold in this state shall be licensed by the Tax Commissioner. Every application for such license shall be made on a form prescribed by the Tax Commissioner. The application shall include: (a) The name and address of the applicant or, if the applicant is a firm, partnership, limited liability company, or association, the name and address of each of its members or, if the applicant is a corporation, the name and address of each of its officers and the address of its principal place of business; (b) the location of the place of business to be licensed; and (c) such other information as the Tax Commissioner may require for the purpose of administering the Tobacco Products Tax Act.

(2) A person outside of this state who ships or transports tobacco products to any person in this state to be sold in this state may make application for a license and be granted such a license by the Tax Commissioner. If a license is granted, such person shall be subject to the Tobacco Products Tax Act and shall be entitled to act as a licensee. A person outside this state who receives a license shall have established sufficient contact with this state for the exercise of personal jurisdiction over the person in any matter or issue arising under the act.

Source:

Laws 1987, LB 730, ? 9
Laws 1993, LB 121, ? 516

Section 77-4010
Application; place of business; fee.

An application for a license shall be required for each place of business of a first owner and shall be accompanied by a fee of twenty-five dollars. Such license shall be a continuing license unless the license is revoked, canceled, or suspended, and the fees shall be nonrefundable.

Source:

Laws 1987, LB 730, ? 10

Section 77-4011
Issuance of license; rights.

Upon receipt of an application in proper form and payment of the fee, the Tax Commissioner shall issue a license to the applicant, except as provided in section 77-4013. The license shall permit the applicant to whom it is issued to engage in business at the place of business shown on the license. A license shall not be assignable, shall be valid only for the person in whose name it is issued, and shall be valid unless suspended, canceled, or revoked by the Tax Commissioner.

Source:

Laws 1987, LB 730, ? 11

Section 77-4012
License; revoke, cancel, or suspend; procedure.

The Tax Commissioner may revoke, cancel, or suspend any license for a violation of the Tobacco Products Tax Act or any rule or regulation adopted and promulgated by the Tax Commissioner in administering the act. If a license is revoked, canceled, or suspended, the licensee shall immediately surrender such license to the Tax Commissioner. No determination of revocation, cancellation, or suspension shall be made until notice has been given and a hearing has been held by the Tax Commissioner as provided in section 77-4019, if requested by the licensee.

Source:

Laws 1987, LB 730, ? 12

Section 77-4013
License; restoration; fee.

The Tax Commissioner may restore licenses which have been revoked, canceled, or suspended, but the Tax Commissioner shall not issue a new license after the revocation of such a license unless he or she is satisfied that the former licensee will comply with the Tobacco Products Tax Act. A person whose license has previously been revoked, canceled, or suspended shall pay the Tax Commissioner a fee of twenty-five dollars for the issuance of a license after each revocation, cancellation, or suspension.

Source:

Laws 1987, LB 730, ? 13

Section 77-4014
Licensee; file return; contents; pay tax.

(1) On or before the tenth day of each calendar month commencing on or after January 1, 1988, every person licensed under subsection (1) of section 77-4009 shall file a return with the Tax Commissioner showing either the quantity and the price of each tobacco product brought or caused to be brought into this state for sale or the quantity and the price of each tobacco product made, manufactured, or fabricated in this state for sale in this state, whichever is applicable, during the preceding calendar month.

(2) Every person licensed pursuant to subsection (2) of section 77-4009 shall, in the manner described in subsection (1) of this section, file a return showing in detail the different kinds, quantity, and wholesale sales price of each tobacco product shipped or transported to retailers in this state to be sold by such retailers during the preceding calendar month.

(3) Returns shall be made upon forms furnished and prescribed by the Tax Commissioner. Each return shall be accompanied by a remittance for the full tax liability shown, less an amount of such liability equal to any amount allowed a payer of the sales and use tax pursuant to subdivision (1)(d) of section 77-2708 as compensation to reimburse the licensee for his or her expenses incurred in complying with the Tobacco Products Tax Act.

Source:

Laws 1987, LB 730, ? 14
Laws 2002, Second Spec. Sess., LB 32, ? 4

Section 77-4015
Return; review; deficiency.

As soon as practicable after any return is filed, the Tax Commissioner shall examine the return. If the Tax Commissioner, in his or her judgment, finds that the return is incorrect and any amount of tax due from the licensee is unpaid, he or she shall notify the licensee of the deficiency. Such notice shall be sent to the licensee by registered or certified mail.

Source:

Laws 1987, LB 730, ? 15

Section 77-4016
Failure to file return; return and assessment by Tax Commissioner.

(1) If any licensee fails to file a return within the time prescribed, the Tax Commissioner may make a return for the licensee from his or her own knowledge and from such information as he or she can obtain through investigation and inspection or otherwise and shall assess a tax on such basis.

(2) Such tax shall be paid within ten days after the Tax Commissioner sends a written notice of the amount by registered or certified mail to the licensee. Any such return and assessment made by the Tax Commissioner on account of the failure of the licensee to make a return shall be deemed prima facie correct and valid, and the licensee shall have the burden of establishing that such return and assessment is incorrect or invalid in any action or proceeding based on such return and assessment.

Source:

Laws 1987, LB 730, ? 16

Section 77-4017
Licensee; records; inspection of business.

(1) Every licensee shall keep complete and accurate records for all places of business, including itemized invoices of tobacco products (a) held, purchased, manufactured, or brought in or caused to be brought into this state or (b) for a licensee located outside of this state, shipped or transported to retailers in this state.

(2) All books, records, and other papers and documents required to be kept by this section shall be preserved for a period of at least three years after the due date of the tax imposed by the Tobacco Products Tax Act unless the Tax Commissioner, in writing, authorizes their destruction or disposal at an earlier date.

(3) At any time during usual business hours, duly authorized agents or employees of the Tax Commissioner may enter any place of business of a licensee and inspect the premises, the records required to be kept pursuant to this section, and the tobacco products contained in such place of business for purposes of determining whether or not such licensee is in full compliance with the act. Refusal to permit such inspection by a duly authorized agent or employee of the Tax Commissioner shall be grounds for revocation, cancellation, or suspension of the license.

Source:

Laws 1987, LB 730, ? 17

Section 77-4018
Tax refund or credit.

When tobacco products for which the tax imposed by the Tobacco Products Tax Act has been reported and paid are (1) sold, shipped, or transported by the licensee to retailers, licensees, or ultimate consumers outside this state or (2) returned to the manufacturer by the licensee, a refund or credit of the tax shall be made to the licensee. For the purpose of making such credit or refund, the Tax Commissioner may issue a tax credit or may prepare a voucher showing the net amount of such refund due. The Tax Commissioner shall have a warrant drawn upon the State Treasurer for the amount of any such refund certified by the Tax Commissioner.

Source:

Laws 1987, LB 730, ? 18

Section 77-4019
Hearing; procedure.

A licensee may request a hearing on any proposed notice of deficiency issued by the Tax Commissioner. A licensee may also request a hearing after notice that the Tax Commissioner intends to revoke, cancel, or suspend a license. Such request shall be made within twenty days after the receipt of the notice of deficiency or the notice that the Tax Commissioner intends to revoke, cancel, or suspend a license. At such hearing the Tax Commissioner, or any officer or employee of the Tax Commissioner designated in writing, may examine any books, papers, or memoranda bearing upon the matter at issue and require the attendance of any licensee or any officer or employee of such licensee having knowledge pertinent to such hearing. The Tax Commissioner or his or her designee shall have the power to administer oaths to persons testifying at such hearing.

During the hearing, the Tax Commissioner or his or her designee shall not be bound by the technical rules of evidence, and no informality in any proceeding or in the manner of taking testimony shall invalidate any order or decision made or approved by the Tax Commissioner.

Source:

Laws 1987, LB 730, ? 19

Section 77-4020
Final decision; notification; appeal.

Within a reasonable time after the hearing pursuant to section 77-4019, the Tax Commissioner shall make a final decision or final determination and notify the licensee by registered or certified mail of such decision or determination. If any tax or additional tax becomes due, such notice shall be accompanied by a demand for payment of any tax due. A licensee may appeal the decision of the Tax Commissioner, and the appeal shall be in accordance with the Administrative Procedure Act.

Source:

Laws 1987, LB 730, ? 20
Laws 1988, LB 352, ? 162

Cross References:

Administrative Procedure Act,see section 84-920.

Section 77-4021
Recovery of tax, interest, or penalty; effect.

The Tax Commissioner may recover the amount of any tax, interest, or penalty imposed under the Tobacco Products Tax Act in a civil action. The Uniform State Tax Lien Registration and Enforcement Act shall apply to such taxes, interest, or penalties. The collection of such tax, interest, or penalty shall not be a bar to any criminal prosecution pursuant to section 77-4024.

Source:

Laws 1987, LB 730, ? 21

Cross References:

Uniform State Tax Lien Registration and Enforcement Act,see section 77-3901.

Section 77-4022
Tax; interest; penalty.

(1) Any tax imposed by section 77-4008 which is not paid on the due date shall bear interest at the rate prescribed by section 45-104.02, as such rate may from time to time be adjusted, from the due date until paid.

(2) If the Tax Commissioner finds that a licensee has made a false and fraudulent return with intent to evade the Tobacco Products Tax Act, the Tax Commissioner shall assess a penalty of twenty-five percent of the entire tax due for which the false and fraudulent return was made, excluding interest.

Source:

Laws 1987, LB 730, ? 22
Laws 1992, Fourth Spec. Sess., LB 1, ? 39

Section 77-4023
Tax Commissioner; adopt rules and regulations.

The Tax Commissioner shall adopt and promulgate such rules and regulations as may be necessary to administer and enforce the Tobacco Products Tax Act.

Source:

Laws 1987, LB 730, ? 23

Section 77-4024
Violation; penalty.

Any person who violates the Tobacco Products Tax Act or any person who sells, delivers, or accepts tobacco products with the intent to evade the act shall be guilty of a Class IV felony.

Source:

Laws 1987, LB 730, ? 24

Section 77-4025
Tobacco Products Administration Cash Fund; created; use; investment.

There is hereby created a cash fund in the Department of Revenue to be known as the Tobacco Products Administration Cash Fund. Except as otherwise provided in section 77-4008, all revenue collected or received by the Tax Commissioner from the license fees and taxes imposed by the Tobacco Products Tax Act shall be remitted to the State Treasurer for credit to the Tobacco Products Administration Cash Fund. All costs required for administration of the Tobacco Products Tax Act shall be paid from such fund. Credits and refunds allowed under the act shall be paid from the Tobacco Products Administration Cash Fund. Any receipts, after credits and refunds, in excess of the amounts sufficient to cover the costs of administration may be transferred to the General Fund at the direction of the Legislature. The State Treasurer shall transfer two million five hundred thousand dollars from the Tobacco Products Administration Cash Fund to the General Fund within fifteen days after November 1, 2002. Any money in the Tobacco Products Administration Cash Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

Source:

Laws 1987, LB 730, ? 25
Laws 1989, LB 258, ? 12
Laws 1994, LB 1066, ? 85
Laws 2002, LB 1085, ? 21
Laws 2002, LB 1310, ? 10

Cross References:

Nebraska Capital Expansion Act,see section 72-1269.
Nebraska State Funds Investment Act,see section 72-1260.