ID H0376

Wholesalers applying for cigarette licenses or permits must post a bond equal to the greater of twice the estimated average tax liability or the value of stamps in inventory, with a minimum of $1,000.

Wholesalers may prepay the full value of stamps in advance as an alternative to posting a bond.

Wholesalers with a posted bond may petition for release from the bond requirement after filing timely and fully paid tax returns for at least 12 months, with the commission deciding within 90 days.

If a bond-released wholesaler becomes delinquent on tax filings or payments, the commission may immediately demand a new bond and take enforcement actions including seizing stamps, filing liens, or revoking the cigarette permit without notice or hearing.

Wholesalers who exclusively purchase pre-stamped cigarettes from other wholesalers may petition to waive the bond requirement if they provide evidence they are not required to pay cigarette taxes under state law.