July 26, 2006, Introduced by Senators GEORGE, BIRKHOLZ, JELINEK, SWITALSKI, BASHAM, HAMMERSTROM, ALLEN and GARCIA and referred to the Committee on Commerce and Labor.
A bill to amend 1993 PA 327, entitled
"Tobacco products tax act,"
by amending sections 2, 3, 5, 6, 6a, 7, 8, 9, and 11 (MCL 205.422,
205.423, 205.425, 205.426, 205.426a, 205.427, 205.428, 205.429, and
205.431), sections 2 and 8 as amended by 2005 PA 238, sections 3,
5, and 6 as amended and section 6a as added by 1997 PA 187, section
7 as amended by 2004 PA 164, and sections 9 and 11 as amended by
2004 PA 474, and by adding sections 3a and 11a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Cigarette" means a roll for smoking made wholly or in
part of tobacco, irrespective of size or shape and irrespective of
the tobacco being flavored, adulterated, or mixed with any other
ingredient, which roll has a wrapper or cover made of paper or any
other material. Cigarette does not include cigars.
(b) "Cigarette retailer" means a person other than a
transportation company who operates a place of business, whether
located within or outside of this state, for the purpose of making
sales of cigarettes at retail.
(c) (b)
"Commissioner" means the state treasurer.
(d) (c)
"Counterfeit cigarette" means a cigarette
in an
individual package of cigarettes or other container with a false
manufacturing label or a cigarette in an individual package of
cigarettes or other container with a counterfeit stamp.
(e) (d)
"Counterfeit cigarette paper" means a
cigarette
paper with a false manufacturing label or that has not been
printed, manufactured, or made by authority of the trademark owner.
(f) (e)
"Counterfeit stamp" means any stamp,
label, or
print, indicium, or character, that evidences, or purports to
evidence, the payment of any tax levied under this act and that has
not been printed, manufactured, or made by authority of the
department as provided in this act and has not been issued, sold,
or circulated by the department.
(g) (f)
"Department" means the department of
treasury.
(h) (g)
"Financially sound" means a determination
by the
department that the wholesaler or unclassified acquirer is able to
pay for its stamps in the ordinary course of business based on
criteria including, but not limited to, all of the following:
(i) Past filing and payment history with the department.
(ii) Outstanding liabilities.
(iii) Review of current financial statements including, but not
limited to, balance sheets and income statements.
(iv) Duration that the wholesaler or unclassified acquirer has
been licensed under this act.
(i) (h)
"Gray market cigarette" means any cigarette
the
package of which bears any statement, label, stamp, sticker, or
notice indicating that the manufacturer did not intend the
cigarettes to be sold, distributed, or used in the United States,
including, but not limited to, a label stating "For Export Only",
"U.S. Tax Exempt", "For Use Outside U.S.", or similar wording.
(j) (i)
"Gray market cigarette paper" means any
cigarette
paper the package of which bears any statement, label, stamp,
sticker, or notice indicating that the manufacturer did not intend
the cigarette papers to be sold, distributed, or used in the United
States, including, but not limited to, a label stating "For Export
Only", "U.S. Tax Exempt", "For Use Outside U.S.", "For Use in
______________ (another country) Only", or similar wording.
(k) (j)
"Individual package" means an individual
packet or
pack used to contain or to convey cigarettes to the consumer.
Individual package does not include cartons, cases, or shipping or
storage containers that contain smaller packaging units of
cigarettes.
(l) (k)
"Licensee" means a person licensed under
this act.
(m) (l) "Manufacturer" means a person who
manufactures or
produces a tobacco product.
(n) (m)
"Noncigarette smoking tobacco" means tobacco
sold in
loose or bulk form that is intended for consumption by smoking and
includes roll-your-own cigarette tobacco.
(o) (n)
"Person" means an individual, partnership,
fiduciary, association, limited liability company, corporation, or
other legal entity.
(p) (o)
"Place of business" means a place where a
tobacco
product is sold or where a tobacco product is brought or kept for
the purpose of sale or consumption, including a vessel, airplane,
train, or vending machine.
(q) (p)
"Retailer" means a person other than a
transportation company who operates a place of business for the
purpose of making sales of a tobacco product other than cigarettes
at retail.
(r) (q)
"Sale" means a transaction by which the ownership of
tangible personal property is transferred for consideration and
applies also to use, gifts, exchanges, barter, and theft.
(s) (r)
"Secondary wholesaler" means a person who
sells a
tobacco product for resale, who purchases a tobacco product from a
wholesaler or unclassified acquirer licensed under this act, and
who maintains an established place of business in this state where
a substantial portion of the business is the sale of tobacco
products and related merchandise at wholesale, and where at all
times a substantial stock of tobacco products and related
merchandise is available to retailers or cigarette retailers for
resale.
(t) (s)
"Smokeless tobacco" means snuff, chewing
tobacco,
and any other tobacco that is intended to be consumed by means
other than smoking.
(u) (t)
"Stamp" means a distinctive character,
indication,
or mark, as determined by the department, attached or affixed to an
individual package of cigarettes by mechanical device or other
means authorized by the department to indicate that the tax imposed
under this act has been paid.
(v) (u)
"Stamping agent" means a wholesaler or
unclassified
acquirer other than a manufacturer who is licensed and authorized
by the department to affix stamps to individual packages of
cigarettes on behalf of themselves and other wholesalers or
unclassified acquirers other than manufacturers.
(w) (v)
"Tobacco product" means cigarettes,
cigars,
noncigarette smoking tobacco, or smokeless tobacco.
(x) (w)
"Transportation company" means a person
operating,
or supplying to common carriers, cars, boats, or other vehicles for
the transportation or accommodation of passengers and engaged in
the sale of a tobacco product at retail.
(y) (x)
"Transporter" means a person importing or
transporting into this state, or transporting in this state, a
tobacco product obtained from a source located outside this state,
or from any person not duly licensed under this act. Transporter
does not include an interstate commerce carrier licensed by the
interstate commerce commission to carry commodities in interstate
commerce, or a licensee maintaining a warehouse or place of
business outside of this state if the warehouse or place of
business is licensed under this act.
(z) (y)
"Unclassified acquirer" means a person,
except a
transportation company or a purchaser at retail from a cigarette
retailer or a retailer licensed under the general sales tax act,
1933 PA 167, MCL 205.51 to 205.78, who imports or acquires a
tobacco product from a source other than a wholesaler or secondary
wholesaler licensed under this act for use, sale, or distribution.
Unclassified acquirer also means a person who receives cigars,
noncigarette smoking tobacco, or smokeless tobacco directly from a
manufacturer licensed under this act or from another source outside
this state, which source is not licensed under this act. An
unclassified acquirer does not include a wholesaler.
(aa) (z)
"Vending machine operator" means a person
who
operates 1 or more vending machines for the sale of a tobacco
product and who purchases a tobacco product from a manufacturer,
licensed wholesaler, or secondary wholesaler.
(bb) (aa)
"Wholesale price" means the actual price paid
for
a tobacco product, including any tax, by a wholesaler or
unclassified acquirer to a manufacturer, excluding any discounts or
reductions.
(cc) (bb)
"Wholesaler" means a person who purchases
all or
part of his or her tobacco products from a manufacturer, who sells
75% or more of those tobacco products to others for resale, and who
maintains an established business where substantially all of the
business is the sale of tobacco products or cigarettes and related
merchandise at wholesale and where at all times a substantial stock
of tobacco products and related merchandise is available to
retailers and cigarette retailers for resale. Wholesaler includes a
chain of stores retailing a tobacco product to the consumer if 75%
of its stock of tobacco products is purchased directly from the
manufacturer.
Sec. 3. (1) Beginning May 1, 1994, a person shall not
purchase, possess, acquire for resale, or sell a tobacco product as
a manufacturer, wholesaler, secondary wholesaler, vending machine
operator, unclassified acquirer, transportation company, cigarette
retailer, or transporter in this state unless licensed to do so. A
license granted or renewed under this act is not assignable and
shall not be considered a property right or other guarantee under
any federal or state law. A license under this act is a privilege
indicating the ability of a licensee to engage in that business.
(2) A manufacturer or unclassified acquirer may sell or
distribute cigarettes to a person located or doing business within
this state, only if such person is a licensed wholesaler. An
unclassified acquirer may obtain cigarettes only from a licensed
manufacturer. A wholesaler or secondary wholesaler may sell or
distribute cigarettes to a person located or doing business within
this state, only if such person is a licensed wholesaler, secondary
wholesaler, or cigarette retailer. A wholesaler may obtain
cigarettes only from a licensed manufacturer, unclassified
acquirer, or other wholesaler. A secondary wholesaler may obtain
cigarettes only from a licensed wholesaler or unclassified
acquirer. A cigarette retailer may only sell cigarettes obtained
from a licensed wholesaler or secondary wholesaler.
(3) A manufacturer, wholesaler, secondary wholesaler,
unclassified acquirer, or cigarette retailer shall, prior to the
initial sale or exchange of cigarettes with any person who is
required to be licensed under this section, require proof of a
valid license for the relevant business location issued under this
section.
(4) (2)
Upon proper application and the payment of the
applicable
fee, and subject to subsection (6) (8), the department
shall issue a license containing a unique numerical identifier to
each manufacturer, wholesaler, secondary wholesaler, vending
machine operator, unclassified acquirer, transportation company, or
transporter. The application shall be on a form prescribed by the
department and signed under penalty of perjury. Except for
transportation companies, each place of business shall be
separately licensed. If a person acts in more than 1 capacity at
any 1 place of business, a license shall be procured for each
capacity. Each machine for vending tobacco products shall be
considered a place of retail business. Each license or a duplicate
copy shall be prominently displayed on the premises covered by the
license. In the case of vending machines, a disc or marker
furnished by the department showing it to be licensed shall be
attached to the front of the machine in a place clearly visible to
the public.
(5) (3)
The fees for licenses shall be the following:
(a) A wholesaler's license, $100.00.
(b) A secondary wholesaler's license, $25.00.
(c) A license for vending machine operators, $25.00.
(d) An unclassified acquirer's license, as follows:
(i) State of Michigan, no fee.
(ii) Retail importer of tobacco products other than cigarettes,
$10.00.
(iii) Retail importer of cigarettes, $100.00.
(iv) Vending machine operator buying direct from a
manufacturer, $100.00.
(v) Manufacturer, $100.00.
(vi) Any other importer, $100.00.
(e) A transportation company's license, $5.00.
(f) A transporter's license, $50.00.
(g) A cigarette retailer's license, no fee.
(6) (4)
If a manufacturer, wholesaler, secondary wholesaler,
cigarette retailer, or vending machine operator maintains more than
1 place of business, the fee for each additional place of business
shall be 1/4 of the fee otherwise prescribed in subsection (3). A
fee, or a part of a fee, shall not be refunded by reason of
relinquishment, suspension, or revocation of the license, or,
except under order of a court of competent jurisdiction, for any
other reason or cause.
(7) (5)
A person shall not possess a machine for vending
tobacco products for a period in excess of 72 hours unless there is
a disc or marker attached as provided by this section. This
requirement does not apply to a machine not containing a tobacco
product. If a person possesses a vending machine containing a
tobacco product that is not properly licensed or identified as
required by this section, the department may seal or seize the
machine, together with the tobacco products contained in the
machine. The provisions of section 9 govern the seizure and
subsequent disposition of a machine or tobacco product seized.
(8) (6)
Applications from persons applying for an initial
license under this act shall be accompanied by satisfactory proof,
as determined by the department, of all the following information,
under the penalty of perjury:
(a) The applicant's financial responsibility, including but
not limited to, satisfactory proof of a minimum net worth of
$25,000.00.
(b) That the applicant owns, or has an executed lease for, a
secure nonresidential facility for the purpose of receiving and
distributing cigarettes and conducting its business if the
applicant owns or has an executed lease for such a facility. If the
applicant carries on another business in conjunction with the
secure nonresidential facility, the other business shall also be
identified.
(c) United States citizenship or eligibility to obtain
employment within the United States if not a citizen. If the
applicant is not an individual, the controlling shareholders,
partners, directors, and principal officers shall be United States
citizens or eligible to obtain employment within the United States
if not a citizen.
(d) If the applicant is an individual, the name and business
address of the applicant.
(e) If the applicant is a firm, partnership, or association,
the name and business address of each of its members.
(f) If the applicant is a corporation or limited liability
company, the name and address of each of its officers and the name
and business address of any person who owns, directly or
indirectly, in the aggregate, more than 10% of the ownership
interests in the corporation or limited liability company.
(g) The name or names under which the applicant regularly does
business.
(h) The physical address of the applicant's principal place of
business and any other place of business within this state.
(i) In the case of a manufacturer or unclassified acquirer,
the brand styles of cigarettes the applicant manufactures or
imports.
(j) The kind or nature of the business to be conducted.
(k) Sufficient information to demonstrate that the applicant
has complied or will comply with all of the requirements of this
act.
(9) (7)
The department may require an applicant who is
purchasing the business of a licensee to file a copy of the
contract of sale and any related documents with its application.
The department may require a licensee under this section to furnish
a surety bond with a surety company authorized to do business in
this state in an amount the department may fix, conditioned upon
the payment of the tax provided by this act. The department may
also require a licensee under this section to file a financial
statement with the department showing all assets and liabilities
and any other information the department may prescribe, to be filed
within 30 days after the date requested. If there is a change of
more than 50% of ownership or control or a change in the general
partnership of a licensee, the department may require that licensee
to file a new application for a license or an updated financial
statement. A licensee shall notify the department of any change in
the information contained on the application form and shall do so
within 30 days of any such change.
Sec. 3a. (1) Not later than 30 days after the effective date
of the amendatory act that added this section, the commissioner
shall create and maintain a website setting forth the identity of
all persons issued licenses under this act and the business
locations of each licensee, itemized by type of license possessed,
and shall update the website not less frequently than once per
month. The commissioner shall, at a minimum, include in that
publication the legal name of the licensee, the unique numerical
identifier issued to the licensee, and any name under which such
licensee regularly does business.
(2) Not later than 30 days after the effective date of the
amendatory act that added this section, the commissioner shall
create and maintain a website setting forth the identity of all
persons whose licenses have been suspended or revoked under this
act within the past 3 years, itemized by type of license, and shall
update the website within 30 days of the date the commissioner
suspends or revokes any person's license. The commissioner shall,
at a minimum, include in that publication the legal name of the
licensee, the business locations of the licensee, the unique
numerical identifier issued to the licensee prior to the suspension
or revocation of the license, and any name under which such
licensee regularly does business.
Sec. 5. (1) The department may suspend, revoke, or refuse to
issue or renew a license issued under this act for failure to
comply with this act or for any other good cause. A person whose
license is suspended, revoked, or not renewed shall not act as a
stamping agent or acquire a stamp from the department or any other
person, or sell a tobacco product during the period of suspension
or revocation, or until the license is renewed.
(2) If a person who is a manufacturer, wholesaler, or
unclassified acquirer licensed under this act is convicted of a
felony under any provision of this act, the department shall revoke
any license issued under this act to that person.
(3) The commissioner shall not grant or renew a license and
shall terminate a license if the commissioner determines the
applicant meets 1 or more of the following:
(a) Owes $500.00 or more in delinquent cigarette taxes.
(b) Has had a license under this act revoked by the department
within the immediately preceding 2 years.
(c) Has been convicted of a crime relating to stolen,
counterfeit, contraband, or gray market cigarettes, under state or
federal law.
(d) Is a manufacturer of cigarettes that is not either of the
following:
(i) A participating manufacturer as defined in section 1 of
1999 PA 244, MCL 445.2051.
(ii) In full compliance with section 6c.
(e) Has been found to have violated, at least 2 times in a 6-
month period, any law related to the sale of tobacco to minors.
(f) Has been found to have imported or caused to be imported
into the United States for sale or distribution any cigarette in
violation of 19 USC 1681a.
(g) Has been found to have imported or caused to be imported
into the United States for sale or distribution or manufactured for
sale or distribution in the United States any cigarette that does
not fully comply with the federal cigarette labeling and
advertising act, 15 USC 1331-1340.
(4) (3)
Before the department suspends, revokes, or refuses
to renew a license under this act, the department shall notify the
person of its intent to hold a hearing before a representative of
the commissioner for purposes of determining whether to suspend,
revoke, or refuse to renew a license at least 14 days before the
scheduled hearing date.
(5) (4)
A person aggrieved by the suspension, revocation, or
refusal to issue or renew a license may apply to the revenue
division of the department for a hearing within 20 days after
notice of the suspension, revocation, or refusal to issue or renew
the license. A hearing shall be had in the same manner provided in
section 21 of 1941 PA 122, MCL 205.21. The decision in case of
suspension, revocation, or refusal to renew shall be issued within
45 days of receipt of the request for hearing.
Sec. 6. (1) A manufacturer, wholesaler, secondary wholesaler,
vending machine operator, transportation company, unclassified
acquirer, cigarette retailer, or retailer shall keep a complete and
accurate record of each tobacco product manufactured, purchased, or
otherwise acquired. The record shall include the quantities of
cigarette, by brand style, on hand both at the beginning and ending
of each month. Except for a manufacturer, the records shall include
a written statement containing the name and address of both the
seller and the purchaser, the date of delivery, the quantity, the
trade name or brand, and the price paid for each tobacco product
purchased. A licensee shall keep as part of the records a true copy
of all purchase orders, invoices, bills of lading, and other
written matter substantiating the purchase or acquisition of each
tobacco product at the location where the tobacco product is stored
or offered for sale. A cigarette retailer and a retailer shall keep
as part of the records a true copy of all purchase orders,
invoices, bills of lading, and other written matter substantiating
the purchase or acquisition of each tobacco product at the location
where the tobacco product is offered for sale for a period of 4
months from the date of purchase or acquisition. The department
may, by giving prior written approval, authorize a person licensed
under this act or a retailer to maintain records in a manner other
than that required by this subsection. Other records shall be kept
by these persons as the department reasonably prescribes.
(2) A manufacturer, wholesaler, unclassified acquirer, and
secondary wholesaler shall deliver with each sale or consignment of
a tobacco product a written statement containing the name or trade
name and address of both the seller and the purchaser, the date of
delivery, the quantity, and the trade name or brand of the tobacco
product, correctly itemizing the prices paid for each brand
purchased, and shall retain a duplicate of each statement.
(3) A vending machine operator shall keep a detailed record of
each vending machine owned for the sale of tobacco products showing
the location of the machine, the date of placing the machine on the
location, the quantity of each tobacco product placed in the
machine, the date when placed there, and the amount of the
commission paid or earned on sales through the vending machine.
When filling or refilling the vending machine, the operator shall
deliver to the owner or tenant occupying the premises where the
machine is located a written statement containing his or her own
name and address, the name and address of the owner or the tenant,
the date when the machine was filled, and the quantity of each
brand of tobacco product sold from the machine since the date when
tobacco products were last placed in the machine. A person in
possession of premises where a vending machine is located shall
keep a record of each tobacco product sold through the vending
machine located on the premises and the amount of commission paid
by the person operating the vending machine. The records shall
consist of written statements required to be given by each person
operating a vending machine for the sale of tobacco products as
provided in this section.
(4) A licensee under this act shall not issue or accept a
written statement or invoice that is known to the licensee to
contain a statement or omission that falsely indicates the name of
the customer, the type, trade name, or brand of merchandise, the
quantity of each type, trade name, or brand of merchandise, the
prices, the discounts, the date of the transaction, or the terms of
sale. A person shall not use a device or game of chance to aid,
promote, or induce sales or purchases of a tobacco product, or give
a tobacco product in connection with a device or game of chance.
(5) All statements and other records required by this section
shall be in a form prescribed by the department and shall be
preserved for a period of 4 years and offered for inspection at any
time upon oral or written demand by the department or its
authorized agent by every wholesaler, secondary wholesaler, vending
machine operator, unclassified acquirer, cigarette retailer, and
retailer.
(6) If a tobacco product other than cigarettes is received or
acquired within this state by a wholesaler, secondary wholesaler,
vending machine operator, unclassified acquirer, cigarette
retailer, or retailer, each original manufacturer's shipping case
shall bear the name and address of the person making the first
purchase or any other markings the department prescribes. If a
tobacco product other than cigarettes is found in a place of
business or otherwise in the possession of a wholesaler, secondary
wholesaler, vending machine operator, unclassified acquirer,
transporter, cigarette retailer, or retailer without proper
markings on the shipping case, box, or container of the tobacco
product or if an individual package of cigarettes is found without
a stamp affixed as provided under this act or if a tobacco product
is found without proper substantiation by invoices or other records
as required by this section, the presumption shall be that the
tobacco product is kept in violation of this act. If a tobacco
product
is shipped outside the this
state, the licensee shipping
the tobacco product shall cause to be placed on every shipping case
or other container in which the tobacco product is shipped the name
and address of the consignee or purchaser to whom the shipment is
made
outside of the this
state. The department may require
reports from a common carrier who transports a tobacco product to a
point within this state from another person who, under contract,
transports a tobacco product, or from a bonded warehouseperson or
bailee who has in his or her possession a tobacco product. A
carrier, bailee, warehouseperson, or other person shall permit the
inspection of the tobacco products and examination by the
department or its duly authorized agent of any records relating to
the shipment of a tobacco product into, from, or within the state.
(7) A transporter or other licensee transporting, possessing,
or acquiring for the purpose of transporting a tobacco product upon
a public highway, road, or street of this state shall have in his
or her actual possession invoices or bills of lading containing the
name and address of both the seller and the purchaser, the date of
delivery, the name and address of the transporter, the quantity and
trade name or brand of each tobacco product, the price paid for
each trade name or brand in the transporter's possession or
custody, and the license as prescribed under this act.
(8) A transporter desiring to possess or acquire for
transportation or transport a tobacco product upon a highway, road,
or street of this state shall obtain a permit from the department
authorizing the transporter to possess or acquire for
transportation or transport tobacco products and shall have the
permit in his or her possession while the tobacco product is in his
or her possession. This permit shall be obtained for each load
being transported and shall contain a statement setting forth the
name and address of the purchaser, seller, and transporter, the
license number of the purchaser, the date of the delivery of the
tobacco product or date of importation into this state, the route
to be followed if a tobacco product is being transported from an
out-of-state source, and any other information the department
requires. The department shall provide a permit on a form
prescribed by it upon the application of a transporter with the
remittance of a fee of $1.00. If a transporter transports a tobacco
product into this state, the transporter shall stop at the nearest
state police post within this state on the route authorized by the
permit and disclose the tobacco products in his or her possession
and the papers required by this section to be in his or her
possession.
Sec. 6a. (1) Beginning April 15, 1998, a wholesaler or
unclassified acquirer other than a manufacturer may apply to the
department for stamps to affix as provided in this act. The
department may prescribe the method of shipment of the stamps. The
department shall keep a record of all stamps disbursed, name of
wholesaler or unclassified acquirer, and date of disbursement. Each
stamp, roll of stamps, or sheets of stamps shall have a separate
serial number, which shall be visible and clearly identifiable at
the point of sale on each pack of cigarettes. The commissioner
shall keep records of which wholesaler or unclassified acquirer
purchases each roll or group of sheets identified by serial number.
If the commissioner permits the purchase of partial rolls or
sheets, in no case may stamps bearing the same serial number be
sold to more than 1 wholesaler or unclassified acquirer. The
department may release the identity of the wholesaler or
unclassified acquirer to whom specific stamps were disbursed to
state or local police agencies.
(2) Beginning May 1, 1998, before delivery, sale, or transfer
to any person in this state, a wholesaler or an unclassified
acquirer shall, within 10 days of receipt of an individual package
of cigarettes, place or cause to be placed on the bottom of each
individual package of cigarettes to be sold within this state a
stamp provided by the department. Stamps shall be firmly affixed in
such a manner that the stamps cannot be removed without being
mutilated or destroyed. A stamp shall be affixed to each individual
package in an aggregate denomination equal to the amount of the tax
upon the contents of the individual package of cigarettes. A stamp
is considered affixed if more than 50% of the stamp is affixed to
the individual package, as determined by the department.
(3) Beginning May 1, 1998, a retailer or person licensed under
this act, other than a wholesaler or unclassified acquirer or a
person acting as a transporter for a wholesaler or unclassified
acquirer, shall not acquire for resale an individual package of
cigarettes or a cigarette from an individual package unless that
individual package of cigarettes has affixed to it a stamp as
provided in this act.
(4) Beginning September 1, 1998, a cigarette retailer,
retailer, or vending machine operator shall not sell or offer for
sale an individual package of cigarettes to the general public that
does not have affixed the stamp required by this act. Beginning
September 1, 1998, cigarettes without stamps may not be placed or
stored in a vending machine.
(5) The department or its authorized agents may inspect or
conduct an inventory of a wholesaler's or unclassified acquirer's
stock of cigarettes, tobacco products other than cigarettes, and
stamps during regular business hours and inspect the related
statements and other records required in section 6.
(6) The department or its authorized agents may inspect the
operations of a secondary wholesaler, vending machine operator,
cigarette retailer, or retailer, or the contents of a specific
vending machine, during regular business hours. This inspection
shall include inspection of all statements and other records
required by section 6 of this act, of packages of cigarettes and
tobacco products other than cigarettes, and of the contents of
cartons and shipping or storage containers to ascertain that all
individual packages of cigarettes have an affixed stamp of proper
denomination as required by this act. This inspection may also
verify that all the stamps were produced under the authority of the
department.
(7) A person shall not prevent or hinder the department or its
authorized agents from making a full inspection of any place or
vending machine where cigarettes or tobacco products other than
cigarettes subject to the tax under this act are sold or stored, or
prevent or hinder the full inspection of invoices, books, records,
or other papers required to be kept by this act.
(8) The department may require wholesalers and unclassified
acquirers to exchange unaffixed stamps with the department as the
department considers necessary. The department may require
wholesalers, unclassified acquirers, secondary wholesalers, vending
machine operators, cigarette retailers, and retailers to
discontinue offering for sale any unsold individual packages of
cigarettes bearing a prior version of the stamp that the department
has withdrawn from circulation. The department may set a reasonable
timeline after which the prior version of the stamp may no longer
be offered for sale and the new version of the stamp is required. A
secondary wholesaler, cigarette retailer, retailer, or vending
machine operator may return cigarette packages bearing discontinued
stamps to a wholesaler for credit. A wholesaler or unclassified
acquirer may take credit on its tax returns for individual packages
of cigarettes bearing discontinued stamps that are returned to the
manufacturer for credit less the appropriate discount paid.
(9) Except as provided in subsection (10), a wholesaler or
unclassified acquirer shall not give, sell, or lend any unaffixed
stamps to another person and except as otherwise provided in this
act, a person shall not accept, purchase, or borrow any unaffixed
stamps from another person.
(10) Upon written authorization of the department, a
wholesaler or unclassified acquirer licensed under this act may
appoint a stamping agent to affix stamps to individual packages of
cigarettes.
Sec. 7. (1) Beginning May 1, 1994, a tax is levied on the sale
of tobacco products sold in this state as follows:
(a) Through July 31, 2002, for cigars, noncigarette smoking
tobacco, and smokeless tobacco, 16% of the wholesale price.
(b) For cigarettes, 37.5 mills per cigarette.
(c) Beginning August 1, 2002, for cigarettes, in addition to
the tax levied in subdivision (b), an additional 15 mills per
cigarette.
(d) Beginning August 1, 2002, for cigarettes, in addition to
the tax levied in subdivisions (b) and (c), an additional 10 mills
per cigarette.
(e) Beginning July 1, 2004, for cigarettes, in addition to the
tax levied in subdivisions (b), (c), and (d), an additional 37.5
mills per cigarette.
(f) Beginning August 1, 2002 and through June 30, 2004, for
cigars, noncigarette smoking tobacco, and smokeless tobacco, 20% of
the wholesale price.
(g) Beginning July 1, 2004, for cigars, noncigarette smoking
tobacco, and smokeless tobacco, 32% of the wholesale price.
(2) On or before the twentieth day of each calendar month,
every licensee under section 3 other than a cigarette retailer,
retailer, secondary wholesaler, unclassified acquirer licensed as a
manufacturer, or vending machine operator shall file a return with
the department stating the wholesale price of each tobacco product
other than cigarettes purchased, the quantity of cigarettes
purchased, the wholesale price charged for all tobacco products
other than cigarettes sold, the number of individual packages of
cigarettes and the number of cigarettes in those individual
packages, and the number and denominations of stamps affixed to
individual packages of cigarettes sold by the licensee for each
place of business in the preceding calendar month. The return shall
also include the number and denomination of unaffixed stamps in the
possession of the licensee at the end of the preceding calendar
month. Wholesalers shall also report accurate inventories of
cigarettes, both stamped and unstamped at the end of the preceding
calendar month. Wholesalers and unclassified acquirers shall also
report accurate inventories of affixed and unaffixed stamps by
denomination at the beginning and end of each calendar month and
all stamps acquired during the preceding calendar month. The return
shall be signed under penalty of perjury. The return shall be on a
form prescribed by the department and shall contain or be
accompanied by any further information the department requires.
(3) To cover the cost of expenses incurred in the
administration of this act, at the time of the filing of the
return, the licensee shall pay to the department the tax levied in
subsection (1) for tobacco products sold during the calendar month
covered by the return, less compensation equal to both of the
following:
(a) One percent of the total amount of the tax due on tobacco
products sold other than cigarettes.
(b) Through July 31, 2002, 1.25% of the total amount of the
tax due on cigarettes sold.
(c) Beginning August 1, 2002, 1.5% of the total amount of the
tax due on cigarettes sold.
(4) Every licensee and retailer who, on August 1, 2002, has on
hand for sale any cigarettes upon which a tax has been paid
pursuant to subsection (1)(b) shall file a complete inventory of
those cigarettes before September 1, 2002 and shall pay to the
department at the time of filing this inventory a tax equal to the
difference between the tax imposed in subsection (1)(b), (c), and
(d) and the tax that has been paid under subsection (1)(b). Every
licensee and retailer who, on August 1, 2002, has on hand for sale
any cigars, noncigarette smoking tobacco, or smokeless tobacco upon
which a tax has been paid pursuant to subsection (1)(a) shall file
a complete inventory of those cigars, noncigarette smoking tobacco,
and smokeless tobacco before September 1, 2002 and shall pay to the
department at the time of filing this inventory a tax equal to the
difference between the tax imposed in subsection (1)(f) and the tax
that has been paid under subsection (1)(a).
(5) Every licensee and retailer who, on July 1, 2004, has on
hand for sale any cigarettes upon which a tax has been paid
pursuant to subsection (1)(b), (c), and (d) shall file a complete
inventory of those cigarettes before August 1, 2004 and shall pay
to the department at the time of filing this inventory a tax equal
to the difference between the tax imposed in subsection (1)(b),
(c), (d), and (e) and the tax that has been paid under subsection
(1)(b), (c), and (d). Every licensee and retailer who, on July 1,
2004, has on hand for sale any cigars, noncigarette smoking
tobacco, or smokeless tobacco upon which a tax has been paid
pursuant to subsection (1)(f) shall file a complete inventory of
those cigars, noncigarette smoking tobacco, and smokeless tobacco
before August 1, 2004 and shall pay to the department at the time
of filing this inventory a tax equal to the difference between the
tax imposed in subsection (1)(g) and the tax that has been paid
under subsection (1)(f). The proceeds derived under this subsection
shall be credited to the medicaid benefits trust fund created under
section 5 of the Michigan trust fund act, 2000 PA 489, MCL 12.255.
(6) The department may require the payment of the tax imposed
by this act upon the importation or acquisition of a tobacco
product. A tobacco product for which the tax under this act has
once been imposed and that has not been refunded if paid is not
subject upon a subsequent sale to the tax imposed by this act.
(7) An abatement or refund of the tax provided by this act may
be made by the department for causes the department considers
expedient. The department shall certify the amount and the state
treasurer shall pay that amount out of the proceeds of the tax.
(8) A person liable for the tax may reimburse itself by adding
to the price of the tobacco products an amount equal to the tax
levied under this act.
(9) A wholesaler, unclassified acquirer, or other person shall
not sell or transfer any unaffixed stamps acquired by the
wholesaler or unclassified acquirer from the department. A
wholesaler or unclassified acquirer who has any unaffixed stamps on
hand at the time its license is revoked or expires, or at the time
it discontinues the business of selling cigarettes, shall return
those stamps to the department. The department shall refund the
value of the stamps, less the appropriate discount paid.
(10) If the wholesaler or unclassified acquirer has unsalable
packs returned from a cigarette retailer, retailer, secondary
wholesaler, vending machine operator, wholesaler, or unclassified
acquirer with stamps affixed, the department shall refund the
amount of the tax less the appropriate discount paid. If the
wholesaler or unclassified acquirer has unaffixed unsalable stamps,
the department shall exchange with the wholesaler or unclassified
acquirer new stamps in the same quantity as the unaffixed unsalable
stamps. An application for refund of the tax shall be filed on a
form prescribed by the department for that purpose, within 4 years
from the date the stamps were originally acquired from the
department. A wholesaler or unclassified acquirer shall make
available for inspection by the department the unused or spoiled
stamps and the stamps affixed to unsalable individual packages of
cigarettes. The department may, at its own discretion, witness and
certify the destruction of the unused or spoiled stamps and
unsalable individual packages of cigarettes that are not returnable
to the manufacturer. The wholesaler or unclassified acquirer shall
provide certification from the manufacturer for any unsalable
individual packages of cigarettes that are returned to the
manufacturer.
(11) On or before the twentieth of each month, each
manufacturer shall file a report with the department listing all
sales of tobacco products to wholesalers and unclassified acquirers
during the preceding calendar month and any other information the
department finds necessary for the administration of this act. This
report shall be in the form and manner specified by the department.
(12) Each wholesaler or unclassified acquirer shall submit to
the department an unstamped cigarette sales report on or before the
twentieth day of each month covering the sale, delivery, or
distribution of unstamped cigarettes during the preceding calendar
month to points outside of Michigan. A separate schedule shall be
filed for each state, country, or province into which shipments are
made. For purposes of the report described in this subsection,
"unstamped cigarettes" means individual packages of cigarettes that
do not bear a Michigan stamp. The department may provide the
information contained in this report to a proper officer of another
state, country, or province reciprocating in this privilege.
Sec. 8. (1) A person, other than a licensee, who is in control
or in possession of a tobacco product contrary to this act, who
after August 31, 1998 is in control or in possession of an
individual package of cigarettes without a stamp in violation of
this act, or who offers to sell or does sell a tobacco product to
another for purposes of resale without being licensed to do so
under this act, shall be personally liable for the tax imposed by
this act, plus a penalty of 500% of the amount of tax due under
this act.
(2) The department may permit a representative of a licensed
manufacturer of tobacco products whose duties require travel in
this state to transport up to 138,000 cigarettes, of which not more
than 36,000 cigarettes may bear no tax indicia or the tax indicia
of another state. All 138,000 cigarettes must bear the stamp
approved by the department or the tax indicia of another state, if
any. The total value of tobacco products, excluding cigarettes,
carried by a representative shall not exceed a wholesale value of
$5,000.00. A manufacturer shall notify the department of the
manufacturer's representatives that it currently employs who carry
cigarettes or tobacco products other than cigarettes in performing
work duties in this state. The manufacturer shall maintain a record
of each transaction by the manufacturer's representative for a
period of 4 years immediately following the transaction and shall
produce the records upon request of the state treasurer or the
state treasurer's authorized agent. Each record shall identify the
quantity and identity of the tobacco products, detail whether
exchanged, received, removed, or otherwise disposed of and the
identity of the cigarette retailer, retailer, wholesaler, secondary
wholesaler, vending machine operator, or unclassified acquirer
involved. The representative of the manufacturer shall provide a
copy of the record to the cigarette retailer, retailer, wholesaler,
secondary wholesaler, vending machine operator, or unclassified
acquirer at the time of the exchange or disposal. The cigarette
retailer, retailer, wholesaler, secondary wholesaler, vending
machine operator, or unclassified acquirer shall retain the copy of
the record in the same place and for the same time period as other
records required by this section. A representative shall not
exchange, or otherwise dispose of, within this state tobacco
products bearing the tax indicia of another state or receive
tobacco products bearing the tax indicia of another state from
cigarette retailers or retailers located within this state. A
representative who sells, exchanges, or otherwise disposes of
cigarettes or tobacco products other than cigarettes that do not
bear the stamp or other marking required by the department or
sells, exchanges, or otherwise disposes of cigarettes or tobacco
products other than cigarettes bearing the tax indicia of another
state is guilty of a felony, punishable by a fine of not more than
$5,000.00 or imprisonment for not more than 5 years, or both.
(3) A person who possesses, acquires, transports, or offers
for sale contrary to this act 3,000 or more cigarettes, tobacco
products other than cigarettes with an aggregate wholesale price of
$250.00 or more, 3,000 or more counterfeit cigarettes, 3,000 or
more counterfeit cigarette papers, 3,000 or more gray market
cigarettes, or 3,000 or more gray market cigarette papers is guilty
of a felony, punishable by a fine of not more than $50,000.00 or
imprisonment for not more than 5 years, or both.
(4) A person who possesses, acquires, transports, or offers
for sale contrary to this act 1,200 or more, but not more than
2,999, cigarettes, tobacco products other than cigarettes with an
aggregate wholesale value of $100.00 or more but less than $250.00,
or 1,200 or more, but not more than 2,999, counterfeit cigarettes,
counterfeit cigarette papers, gray market cigarettes, or gray
market cigarette papers is guilty of a misdemeanor punishable by a
fine of not more than $5,000.00 or imprisonment of not more than 1
year, or both.
(5) A person who violates a provision of this act for which a
criminal punishment is not otherwise provided is guilty of a
misdemeanor, punishable by a fine of not more than $1,000.00 or 5
times the retail value of the tobacco products involved, whichever
is greater, or imprisonment for not more than 1 year, or both.
(6) A person who manufactures, possesses, or uses a stamp or
manufactures, possesses, or uses a counterfeit stamp or writing or
device intended to replicate a stamp without authorization of the
department, a licensee who purchases or obtains a stamp from any
person other than the department, or who falsifies a manufacturer's
label on cigarettes, counterfeit cigarettes, gray market cigarette
papers, or counterfeit cigarette papers is guilty of a felony and
shall be punished by imprisonment for not less than 1 year or more
than 10 years and may be punished by a fine of not more than
$50,000.00.
(7) A person who falsely makes, counterfeits, or alters a
license, vending machine disc, or marker, or who purchases or
receives a false or altered license, vending machine disc, or
marker, or who assists in or causes to be made a false or altered
license, vending machine disc, or marker, or who possesses a device
used to forge, alter, or counterfeit a license, vending machine
disc, or marker is guilty of a felony punishable by a fine of not
more than $5,000.00 or imprisonment for not more than 5 years, or
both. A person who alters or falsifies records or markings required
under this act is guilty of a felony punishable by a fine of not
more than $5,000.00 or imprisonment for not more than 5 years, or
both.
(8) The attorney general has concurrent power with the
prosecuting attorneys of the state to enforce this act.
(9) At the request of the department or its duly authorized
agent, the state police and all local police authorities shall
enforce the provisions of this act.
(10) The department does not have the authority to enforce the
provisions of this section regarding gray market cigarette papers
or counterfeit cigarette papers.
Sec. 9. (1) A tobacco product held, owned, possessed,
transported, or in control of a person in violation of this act,
and a vending machine, vehicle, and other tangible personal
property containing a tobacco product in violation of this act and
any related books and records are contraband and may be seized and
confiscated by the department as provided in this section.
(2) If an authorized inspector of the department or a police
officer has reasonable cause to believe and does believe that a
tobacco product is being acquired, possessed, transported, kept,
sold, or offered for sale in violation of this act for which the
penalty is a felony, the inspector or police officer may
investigate or search the vehicle of transportation in which the
tobacco product is believed to be located. If a tobacco product is
found in a vehicle searched under this subsection or in a place of
business inspected under this act, the tobacco product, vending
machine, vehicle, other than a vehicle owned or operated by a
transportation company otherwise transporting tobacco products in
compliance with this act, or other tangible personal property
containing those tobacco products and any books and records in
possession of the person in control or possession of the tobacco
product may be seized by the inspector or police officer and are
subject to forfeiture as contraband as provided in this section.
(3) As soon as possible, but not more than 5 business days
after seizure of any alleged contraband, the person making the
seizure shall deliver personally or by registered mail to the last
known address of the person from whom the seizure was made, if
known, an inventory statement of the property seized. A copy of the
inventory statement shall also be filed with the state treasurer.
The inventory statement shall also contain a notice to the effect
that unless demand for hearing as provided in this section is made
within 10 business days, the designated property is forfeited to
the
this state. If the person from whom the seizure was made
is
not known, the person making the seizure shall cause a copy of the
inventory statement, together with the notice provided for in this
subsection, to be published at least 3 times in a newspaper of
general circulation in the county where the seizure was made.
Within 10 business days after the date of service of the inventory
statement, or in the case of publication, within 10 business days
after the date of last publication, the person from whom the
property was seized or any person claiming an interest in the
property may by registered mail, facsimile transmission, or
personal service file with the state treasurer a demand for a
hearing before the state treasurer or a person designated by the
state treasurer for a determination as to whether the property was
lawfully subject to seizure and forfeiture. The person shall verify
a request for hearing filed by facsimile transmission by also
providing a copy of the original request for hearing by registered
mail or personal service. The person or persons are entitled to
appear before the department, to be represented by counsel, and to
present testimony and argument. Upon receipt of a request for
hearing, the department shall hold the hearing within 15 business
days. The hearing is not a contested case proceeding and is not
subject to the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328. After the hearing, the department shall
render its decision in writing within 10 business days of the
hearing and, by order, shall either declare the seized property
subject to seizure and forfeiture, or declare the property
returnable in whole or in part to the person entitled to
possession. If, within 10 business days after the date of service
of the inventory statement, the person from whom the property was
seized or any person claiming an interest in the property does not
file with the state treasurer a demand for a hearing before the
department, the property seized shall be considered forfeited to
the state by operation of law and may be disposed of by the
department as provided in this section. If, after a hearing before
the state treasurer or person designated by the state treasurer,
the department determines that the property is lawfully subject to
seizure and forfeiture and the person from whom the property was
seized or any persons claiming an interest in the property do not
take an appeal to the circuit court of the county in which the
seizure was made within the time prescribed in this section, the
property seized shall be considered forfeited to the state by
operation of law and may be disposed of by the department as
provided in this section.
(4) If a person is aggrieved by the decision of the
department, that person may appeal to the circuit court of the
county where the seizure was made to obtain a judicial
determination of the lawfulness of the seizure and forfeiture. The
action shall be commenced within 20 days after notice of the
department's determination is sent to the person or persons
claiming an interest in the seized property. The court shall hear
the action and determine the issues of fact and law involved in
accordance with rules of practice and procedure as in other in rem
proceedings. If a judicial determination of the lawfulness of the
seizure and forfeiture cannot be made before deterioration of any
of the property seized, the court shall order the destruction or
sale of the property with public notice as determined by the court
and require the proceeds to be deposited with the court until the
lawfulness of the seizure and forfeiture is finally adjudicated.
(5) The department shall destroy all cigarettes forfeited to
this state. The department may sell all tobacco products, except
cigarettes, and other property forfeited pursuant to this section
at public sale. Public notice of the sale shall be given at least 5
days before the day of sale. The department may pay an amount not
to exceed 25% of the proceeds of the sale to the local governmental
unit whose law enforcement agency performed the seizure. The
balance of the proceeds derived from the sale by the department
shall
be credited to the general fund of
the this state.
(6) The seizure and destruction or sale of a tobacco product
or other property under this section does not relieve a person from
a fine, imprisonment, or other penalty for violation of this act.
(7) A person who is not an employee or officer of this state
or a political subdivision of this state who furnishes to the
department or to any law enforcement agency original information
concerning a violation of this act, which information results in
the collection and recovery of any tax or penalty or leads to the
forfeiture of any cigarettes, or other property, may be awarded and
paid by the state treasurer, compensation of not more than 10% of
the net amount received from the sale of any forfeited cigarettes
or other property, but not to exceed $5,000.00, which shall be paid
out of the receipts from the sale of the property. If any amount is
issued to the local governmental unit under subsection (5), the
amount awarded under this subsection to a person who provides
original information that results in a seizure of cigarettes or
other property by a local law enforcement agency shall be paid from
that amount issued under subsection (5). If in the opinion of the
attorney general and the director of the department of state police
it is deemed necessary to preserve the identity of the person
furnishing the information, the attorney general and the director
of the department of state police shall file with the state
treasurer an affidavit setting forth that necessity and a warrant
may be issued jointly to the attorney general and the director of
the department of state police. Upon payment to the person
furnishing that information, the attorney general and the director
of the department of state police shall file with the state
treasurer an affidavit that the money has been by them paid to the
person entitled to the money under this section.
(8) Beginning September 1, 1998, if a cigarette retailer or
retailer possesses or sells cigarettes on which the tax imposed
under this act has not been paid or accrued to a wholesaler,
secondary wholesaler, or unclassified acquirer licensed under this
act, the cigarette retailer or retailer shall be prohibited from
purchasing, possessing, or selling any cigarettes or other tobacco
products as follows:
(a) For a first violation, for a period of not more than 6
months.
(b) For a second violation within a period of 5 years, for a
period of at least 6 months and not more than 36 months.
(c) For a third or subsequent violation within a period of 5
years, for a period of at least 1 year and not more than 5 years.
(9) The prohibition described in subsection (8) shall be
effective upon service by certified mail or personal service on the
cigarette retailer or retailer of notice issued by the department
ordering the cigarette retailer or retailer to cease all sales and
purchases of cigarettes and other tobacco products. Upon receipt of
this notice, the cigarette retailer or retailer may return any
tobacco products in the possession of the cigarette retailer or
retailer upon which the tax imposed by this act has been paid or
accrued to a wholesaler, secondary wholesaler, or unclassified
acquirer licensed under this act. The department shall notify all
licensed wholesalers, manufacturers, secondary wholesalers, vending
machine operators, and unclassified acquirers of any cigarette
retailer or retailer who has been prohibited from purchasing
cigarettes or other tobacco products and the duration of the
prohibition. A wholesaler, secondary wholesaler, or unclassified
acquirer shall not sell cigarettes or other tobacco products to a
cigarette retailer or retailer after receipt of notice from the
department that the cigarette retailer or retailer is prohibited
from purchasing tobacco products. Any cigarettes or other tobacco
products found on the premises of the cigarette retailer or
retailer during the period of prohibition shall be considered
contraband and subject to seizure under this section, and shall
constitute an additional improper possession under this subsection.
The cigarette retailer or retailer may contest the order
prohibiting purchase, possession, or sale of tobacco products in
accordance with the appeal procedures and time limits provided in
subsection (3) of this section. After completion of the appeals
provided or upon expiration of the period to request such appeal,
the department shall issue a final order and make service upon the
cigarette retailer or retailer of an order to cease all purchases,
possession, and sale of all cigarettes and other tobacco products
for a specified period as appropriate. This order does not relieve
the cigarette retailer or retailer from seizure and sale of a
tobacco product or other property under this section, or relieve
the cigarette retailer or retailer from a fine, imprisonment, or
other penalty for violation of this act.
Sec. 11. (1) A person, either as principal or agent, shall not
sell or solicit a sale of a tobacco product to be shipped, mailed,
or
otherwise sent or brought into the this
state, to a person not
a licensed manufacturer, licensed wholesaler, licensed secondary
wholesaler, licensed vending machine operator, licensed
unclassified acquirer, licensed transporter, or licensed
transportation company, unless the tobacco product is to be sold to
or through a licensed wholesaler.
(2) A person shall not make a sale of cigarettes conducted
through the internet, by telephone, or in a mail-order transaction
to any individual who is under the legal minimum age.
(3) Each person making a sale of cigarettes conducted through
the internet, by telephone, or in a mail-order transaction shall
comply with the provisions of this act and all other laws of this
state generally applicable to sales of cigarettes that occur
entirely within this state.
(4) (2)
All sales conducted through the internet, by
telephone, or in a mail-order transaction shall not be completed
unless, before each delivery of cigarettes is made, whether through
the mail, through a transportation company, or through any other
delivery system, the seller has obtained from the purchaser an
affirmation that includes a copy of a valid government-issued
document that confirms the purchaser's name, address, and date of
birth showing that the purchaser is at least the legal minimum age
to purchase cigarettes; that the cigarettes purchased are not
intended for consumption by an individual who is younger than the
legal minimum age to purchase cigarettes; and a written statement
signed by the purchaser that affirms the purchaser's address and
that the purchaser is at least the minimum legal age to purchase
cigarettes. The statement shall also confirm that the purchaser
understands that signing another person's name to the affirmation
is illegal; that the sale of cigarettes to individuals under the
legal minimum purchase age is illegal; and that the purchase of
cigarettes by individuals under the legal minimum purchase age is
illegal under the laws of the state of Michigan. The statement
shall also include 1 of the warnings set forth in section 4(a)(1)
of the federal cigarette labeling and advertising act, 15 USC
1333(a)(1), rotated on a quarterly basis and a notice that
cigarette sales are subject to tax under the laws of the state of
Michigan, and an explanation of how the tax has been, or is to be,
paid with respect to the sale. The seller shall verify the
information contained in the affirmation provided by the purchaser
against a commercially available database of governmental records,
or obtain a photocopy, fax copy, or other image of the valid,
government-issued identification stating the date of birth or age
of the purchaser. The seller must ensure that the package is
delivered to the same address as is provided on the government-
issued identification or as is included in the commercially
available database and that the package is not delivered to any
post office box.
(5) (3)
All invoices, bills of lading, sales receipts, or
other documents related to cigarette sales conducted through the
internet, by telephone, or in a mail-order transaction shall
contain the current seller's valid Michigan sales tax registration
number, business name and address of the seller, and a statement as
to whether all sales taxes and taxes levied under this act have
been paid. All packages of cigarettes shipped from a cigarette
seller to purchasers who reside in Michigan shall clearly print or
stamp the package with the word "CIGARETTES" on the outside of all
sides of the package so it is clearly visible to the shipper. In
addition, the package shall contain an externally visible and
clearly legible notice located on the same side of the package as
the address to which the package is delivered, as follows:
"IF THESE CIGARETTES HAVE BEEN SHIPPED TO YOU FROM A SELLER
LOCATED OUTSIDE OF THE STATE IN WHICH YOU RESIDE, THE SELLER HAS
REPORTED UNDER FEDERAL LAW THE SALE OF THESE CIGARETTES TO OUR
STATE TAX COLLECTION AGENCY, INCLUDING YOUR NAME AND ADDRESS. YOU
ARE LEGALLY RESPONSIBLE FOR ALL APPLICABLE UNPAID STATE TAXES ON
THESE CIGARETTES."
If an order is made as a result of advertisement over the
internet, the tobacco retailer shall request the electronic mail
address of the purchaser and shall receive payment by credit card
or check in the purchaser's name before shipping. This subsection
and
subsection (2) (4)
do not apply to sales by wholesalers
and
unclassified acquirers.
(6) (4)
The deliverer of the cigarettes is required to
obtain proof from a valid government-issued document that the
person signing for the cigarettes is the purchaser.
(7) Each person making a sale of cigarettes conducted through
the internet, by telephone, or in a mail-order transaction to a
consumer located within this state shall file with the department
for each individual sale all of the following:
(a) A statement setting forth the person’s name, trade name,
and the address of the person’s principal place of business and any
other place of business.
(b) Not later than the tenth day of each calendar month, a
memorandum or copy of the invoice for each sale made during the
previous calendar month that includes all of the following
information:
(i) The name and address of the purchaser to whom such sale was
made.
(ii) The brand style or brand styles of the cigarettes that
were sold.
(iii) The quantity of cigarettes that were sold.
(iv) An indication of whether or not the cigarettes sold in the
sale bore a tax stamp evidencing payment of the tax under the laws
of this state.
(8) Each person engaged in business within this state that
makes a sale of cigarettes conducted through the internet, by
telephone, or in a mail-order transaction to a consumer located
outside of this state shall, for each individual sale, submit to
the appropriate tax official of the state in which the purchaser is
located the information required in subsection (7)(a).
(9) Any person that satisfies the requirements of 15 USC 376
shall be considered to have satisfied the requirements of
subsections (7) and (8).
(10) The commissioner is authorized to disclose to the
attorney general any information received under this act and
requested by the attorney general for purposes of determining
compliance with and enforcing the provisions of this act. The
commissioner and the attorney general shall share with each other
the information received under this act and may share the
information with other federal, state, or local agencies for
purposes of enforcement of this act or the laws of the federal
government or of other states.
(11) A statement meets the requirement of subsection (4) if
all of the following are met:
(a) The statement is clear and conspicuous.
(b) The statement is contained in a printed box set apart from
the other contents of the communication.
(c) The statement is printed in bold and capital letters.
(d) The statement is printed with a degree of color contrast
between the background and the printed statement that is no less
than the color contrast between the background and the largest text
used in the communication.
(e) For any printed material delivered by electronic means,
the statement appears at both the top and the bottom of the
electronic mail message or both the top and the bottom of the
internet website homepage.
(12) (5)
As used in this section:
(a) "Computer" means any connected, directly interoperable or
interactive device, equipment, or facility that uses a computer
program or other instructions to perform specific operations,
including logical, arithmetic, or memory functions with or on
computer data or a computer program, and that can store, retrieve,
alter, or communicate the results of the operations to a person,
computer program, computer, computer system, or computer network.
(b) "Computer network" means the interconnection of hardwire
or wireless communication lines with a computer through remote
terminals or a complex consisting of 2 or more interconnected
computers.
(c) "Computer program" means a series of internal or external
instructions communicated in a form acceptable to a computer that
directs the functioning of a computer, computer system, or computer
network in a manner designed to provide or produce products or
results from the computer, computer system, or computer network.
(d) "Computer system" means related, connected or unconnected,
computer equipment, devices, software, or hardware.
(e) "Credit card" means a card or device issued by a person
licensed under 1984 PA 379, MCL 493.101 to 493.114, or under the
consumer financial services act, 1988 PA 161, MCL 487.2051 to
487.2072, or issued by a depository financial institution as
defined in section 1a of the mortgage brokers, lenders, and
services licensing act, 1987 PA 173, MCL 445.1651a, under a credit
card arrangement.
(f) "Device" includes, but is not limited to, an electronic,
magnetic, electrochemical, biochemical, hydraulic, optical, or
organic object that performs input, output, or storage functions by
the manipulation of electronic, magnetic, or other impulses.
(g) "Internet" means the connection to the world wide web
through the use of a computer, a computer network, or a computer
system.
(h) "Sale conducted through the internet" means a sale of, a
solicitation to sell, a purchase of, or an offer to purchase
cigarettes conducted all or in part by accessing an internet
website.
Sec. 11a. Not later than 120 days after the effective date of
the amendatory act that added this section, the department shall
establish, publicize, and maintain a toll-free telephone number to
receive information related to violations of this act.