§ 105-113.35. Tax on tobacco products other than cigarettes. - North Carolina Statutes

Part 3. Tax on Other TobaccoProducts.

§ 105‑113.35.  Tax ontobacco products other than cigarettes.

(a)        Tax. – An excisetax is levied on tobacco products other than cigarettes at the rate of twelveand eight‑tenths percent (12.8%) of the cost price of the products. Thistax does not apply to the following:

(1)        A tobacco productsold outside the State.

(2)        A tobacco productsold to the federal government.

(3)        A sample tobaccoproduct distributed without charge.

(b)        Primary Liability.– The wholesale dealer or retail dealer who first acquires or otherwise handlestobacco products subject to the tax imposed by this section is liable for thetax imposed by this section. A wholesale dealer or retail dealer who bringsinto this State a tobacco product made outside the State is the first person tohandle the tobacco product in this State. A wholesale dealer or retail dealerwho is the original consignee of a tobacco product that is made outside theState and is shipped into the State is the first person to handle the tobaccoproduct in this State.

(c)        SecondaryLiability. – A retail dealer who acquires non‑tax‑paid tobaccoproducts subject to the tax imposed by this section from a wholesale dealer isliable for any tax due on the tobacco products. A retail dealer who is liablefor tax under this subsection may not deduct a discount from the amount of taxdue when reporting the tax.

(d)        Manufacturer'sOption. – A manufacturer who is not a retail dealer and who ships tobaccoproducts other than cigarettes to either a wholesale dealer or retail dealerlicensed under this Part may apply to the Secretary to be relieved of payingthe tax imposed by this section on the tobacco products. Once grantedpermission, a manufacturer may choose not to pay the tax until otherwise notifiedby the Secretary. To be relieved of payment of the tax imposed by this section,a manufacturer must comply with the requirements set by the Secretary.

Permission granted under thissubsection to a manufacturer to be relieved of paying the tax imposed by thissection applies to an integrated wholesale dealer with whom the manufacturer isan affiliate. A manufacturer must notify the Secretary of any integratedwholesale dealer with whom it is an affiliate when the manufacturer applies tothe Secretary for permission to be relieved of paying the tax and when anintegrated wholesale dealer becomes an affiliate of the manufacturer after theSecretary has given the manufacturer permission to be relieved of paying thetax.

If a person is both amanufacturer of cigarettes and a wholesale dealer of tobacco products otherthan cigarettes and the person is granted permission under G.S. 105‑113.10to be relieved of paying the cigarette excise tax, the permission applies tothe tax imposed by this section on tobacco products other than cigarettes. Acigarette manufacturer who becomes a wholesale dealer after receivingpermission to be relieved of the cigarette excise tax must notify the Secretaryof the permission received under G.S. 105‑113.10 when applying for a licenseas a wholesale dealer.

(d1)      Limitation. – Exceptas otherwise provided in this Article, integrated wholesale dealers may notsell, borrow, loan, or exchange non‑tax‑paid tobacco products otherthan cigarettes to, from, or with other integrated wholesale dealers.

(e)        Repealed by SessionLaws 2009‑451, s. 27A.5(c), effective September 1, 2009.  (1969, c. 1075, s. 2; 1977,c. 1114, s. 4; 1991, c. 689, s. 269; 1991 (Reg. Sess., 1992), c. 955, s. 10;2003‑284, s. 45A.1(b); 2004‑84, s. 2(b); 2005‑276, s. 34.1(c);2007‑323, s. 6.23(a); 2007‑435, s. 3; 2009‑451, s. 27A.5(c);2009‑559, s. 2.)