USA Statutes : oregon
Title : TITLE 28 PUBLIC FINANCIAL ADMINISTRATION
Chapter : Chapter 323 Cigarettes and Tobacco Products
(1) ORS 323.005 to 323.482 may
be cited as the Cigarette Tax Act.
(2) Except where the context otherwise requires, the definitions
given in ORS 323.005 to 323.482 govern its construction. [1965 c.525
§§1,2] As used in ORS
323.005 to 323.482, unless the context requires otherwise:
(1) “Cigarette” means any product that contains nicotine, is
intended to be burned or heated under ordinary conditions of use and
consists of or contains:
(a) Any roll of tobacco wrapped in paper or in any substance not
containing tobacco;
(b) Tobacco, in any form, that is functional in the product and
that, because of its appearance, the type of tobacco used in the filler
or its packaging and labeling, is likely to be offered to, or purchased
by, consumers as a cigarette; or
(c) Any roll of tobacco that is wrapped in any substance containing
tobacco and that, because of its appearance, the type of tobacco used in
the filler or its packaging and labeling, is likely to be offered to, or
purchased by, consumers as a cigarette described in paragraph (a) of this
subsection.
(2) “Cigarette activity in this state”:
(a) Means importing, storing or manufacturing cigarettes in this
state, or exporting cigarettes out of this state, in order to sell the
cigarettes either within or outside this state.
(b) Does not include importing, storing, manufacturing or exporting
of cigarettes that are to be consumed by the person doing the importing,
storing, manufacturing or exporting.
(3) “Contraband cigarettes” means cigarettes or packages of
cigarettes:
(a) That do not comply with the requirements of ORS 323.005 to
323.482 or 323.856 or the cigarette tax laws of another state or the
federal government;
(b) That bear trademarks that are counterfeit under ORS 647.135 or
other state or federal trademark laws; or
(c) That have been sold, offered for sale or possessed for sale in
this state in violation of ORS 180.440.
(4) “Department” means the Department of Revenue.
(5) “Dealer” includes every person, other than a manufacturer or a
person holding a distributor’s license, who engages in this state in the
sale of cigarettes.
(6) “Exporting” means the act of carrying or conveying goods from a
point of manufacture or storage in this state to a location outside this
state and may be further defined by the department by rule.
(7) “Importing” means the act of bringing goods to a point of
storage in this state from a location outside this state and may be
further defined by the department by rule.
(8) “In this state” means within the exterior limits of the State
of Oregon and includes all territory within these limits owned by or
ceded to the United States of America.
(9) “Manufacturer” means any person who makes, manufactures or
fabricates cigarettes for sale.
(10) “Package” means the individual package, box or other container
in which retail sales or gifts of cigarettes are normally made or
intended to be made.
(11) “Person” includes any individual, firm, copartnership, joint
venture, association, social club, fraternal organization, corporation,
estate, trust, receiver, trustee, syndicate, this state, any county,
municipality, district or other political subdivision of the state, or
any other group or combination acting as a unit.
(12) “Sale” includes any transfer of title or possession for a
consideration, exchange or barter, in any manner or by any means
whatsoever, but does not include the sale of cigarettes by a manufacturer
to a distributor.
(13) “Taxpayer” means a distributor or other person required to pay
a tax under ORS 323.005 to 323.482, and includes a distributor required
to prepay a tax under ORS 323.068.
(14) “Transporter” means any person importing or transporting into
this state, or transporting in this state, cigarettes obtained from a
source located outside this state, or from any person not licensed as a
distributor under ORS 323.005 to 323.482. It does not include a licensed
distributor, a common carrier to whom is issued a certificate or permit
by the United States Surface Transportation Board to carry commodities in
interstate commerce, or to a carrier of federal tax-free cigarettes in
bond, or any person transporting no more than 199 cigarettes at any one
time.
(15) “Untaxed cigarette” means any cigarette that has not yet been
distributed in such manner as to result in a tax liability under ORS
323.005 to 323.482.
(16) “Use or consumption” includes the exercise of any right or
power over cigarettes incident to the ownership thereof, other than the
sale of the cigarettes or the keeping or retention thereof for the
purpose of sale.
(17) “Wholesaler” means any dealer who engages in the sale of
cigarettes to any other dealer for purposes other than use or
consumption. [1965 c.525 §§3,4,5,9,10,12,13,14,15,16,17; subsection (12)
enacted as 1967 c.193 §2; 2001 c.5 §1; 2003 c.804 §§1,1a]As used in ORS 323.005 to 323.482,
unless the context requires otherwise:
(1) “Distribution” includes:
(a) The sale in this state of untaxed cigarettes.
(b) The use or consumption in this state of untaxed cigarettes.
(c) The receipt or retention in this state of untaxed cigarettes at
a place of business where cigarettes are customarily sold or offered for
sale to consumers.
(d) The placing of cigarettes in vending machines in this state.
(e) The use or consumption by the first person in possession in
this state of untaxed cigarettes transported to the state in quantities
of more than 199 in a single shipment.
(f) Donations of sample cigarettes or gift cartons by the
manufacturers of the cigarettes, except sample packages containing not
more than five cigarettes and labeled as “sample,” “not for sale” or with
similar wording.
(g) The possession in this state of untaxed cigarettes that were
transported to this state in quantities of more than 199, unless the
person in possession of the untaxed cigarettes is in possession of the
untaxed cigarettes in order to transport the cigarettes to a location
outside this state.
(2) “Distributor” includes:
(a) Any person who distributes cigarettes.
(b) Any person who sells or accepts orders for cigarettes that are
to be transported from a point outside this state to a consumer within
this state.
(c) Notwithstanding the provisions of ORS 323.010 (5), any dealer
who serves as the dealer’s own distributor or who buys directly from a
manufacturer for resale in this state shall be deemed to be both a
distributor and a dealer under ORS 323.005 to 323.482.
(3) “Distributor engaged in business in this state” includes any of
the following:
(a) Any distributor maintaining, occupying or using, permanently or
temporarily, directly or indirectly, or through a subsidiary or agent, by
whatever name called, an office, place of distribution, sales or sample
room or place, warehouse or storage place or any other place of business.
(b) A distributor having a representative, agent, salesperson,
canvasser or solicitor operating in this state under the authority of the
distributor or its subsidiary for the purpose of selling, delivering, or
the taking of orders for cigarettes. [1965 c.525 §§6,7,8; 2001 c.5 §2;
2003 c.804 §2](Imposition of Tax)(1) Every distributor shall pay a tax upon distributions of
cigarettes at the rate of 29 mills for the distribution of each cigarette
in this state.
(2) The taxes imposed by ORS 323.005 to 323.482 are in lieu of all
other state, county or municipal taxes on the sale or use of cigarettes.
(3) Any cigarette with respect to which a tax has been prepaid
under ORS 323.068 or has otherwise once been imposed under ORS 323.005 to
323.482 is not subject upon a subsequent distribution to the taxes
imposed by ORS 323.005 to 323.482. [1965 c.525 §§18,30; 1971 c.535 §1;
1985 c.816 §1; 1989 c.866 §1; 1997 c.2 §1; 2003 c.804 §4] (1) Notwithstanding ORS
323.030 (2) and in addition to and not in lieu of any other tax, every
distributor shall pay a tax upon distributions of cigarettes at the rate
of 30 mills for the distribution of each cigarette in this state.
(2) Any cigarette for which a tax has once been imposed under ORS
323.005 to 323.482 may not be subject upon a subsequent distribution to
the taxes imposed by ORS 323.005 to 323.482. [2002 s.s.3 c.2 §2(1),(2);
2003 c.804 §§5c(1),(2),5e(1),(2)]The taxes imposed by ORS 323.005 to 323.482 do not apply to
distributions of cigarettes by the manufacturer to a licensed
distributor. [1965 c.525 §19; 2003 c.804 §6]The taxes imposed by ORS 323.005 to
323.482 do not apply to the sale of cigarettes by a distributor to a
common carrier engaged in interstate or foreign passenger service or to a
person authorized to sell cigarettes on the facilities of the carrier.
Whenever cigarettes are sold by distributors to common carriers engaged
in interstate or foreign passenger service for use or sale on facilities
of the carriers, or to persons authorized to sell cigarettes on those
facilities, the tax imposed by this section may not be levied with
respect to sales of the cigarettes by the distributors, but a tax is
hereby levied upon the carriers or upon the persons authorized to sell
cigarettes on the facilities of the carriers, as the case may be, for the
privilege of making these sales in Oregon at the same rate that is
imposed upon the distribution of cigarettes in this state for each
cigarette sold. The common carriers and authorized persons shall pay the
tax imposed by this section and file reports with the Department of
Revenue as provided in ORS 323.355. [1965 c.525 §20; 1985 c.78 §1; 2003
c.804 §7] The taxes imposed by
ORS 323.005 to 323.482 do not apply to cigarettes stored in a bonded
warehouse and that are nontax paid under the provisions of chapter 52 of
the Internal Revenue Act of 1954, as amended. [1965 c.525 §22; 2003 c.804
§8]The taxes imposed by ORS 323.005 to 323.482 do not apply to:
(1) The sale of cigarettes to United States Army, Air Force, Navy,
Marine Corps, or Coast Guard exchanges and commissaries and Navy or Coast
Guard ships’ stores, the United States Department of Veterans Affairs,
ships’ stores maintained under federal bond, or to any person that by
virtue of the constitution or statutes of the United States cannot be
made the subject of taxation by this state.
(2) The sale or gift of federally tax-free cigarettes when the
cigarettes are delivered directly from the manufacturer under Internal
Revenue bond to a veterans’ home or a hospital or domiciliary facility of
the United States Department of Veterans Affairs for gratuitous issue to
veterans receiving hospitalization or domiciliary care. The tax may not
be imposed with respect to the use or consumption of these cigarettes by
the institution or by the veteran patients or domiciliaries. [1965 c.525
§§21,24; 1991 c.67 §79; 2003 c.804 §9] (1)
The taxes imposed by ORS 323.005 to 323.482 do not apply to the use or
consumption of untaxed cigarettes transported to this state in a single
lot or shipment of not more than 199 cigarettes, or of not more than 199
untaxed cigarettes obtained at one time from any of the instrumentalities
listed in ORS 323.055 (1).
(2) Any taxes resulting from a distribution of cigarettes for
personal use or consumption in a quantity of more than 199 cigarettes
shall be paid by the user or consumer. [1965 c.525 §25; 2003 c.804 §10] Any claim for exemption from tax under
ORS 323.005 to 323.482 shall be made to the Department of Revenue in the
manner the department prescribes. [1965 c.525 §29; 2003 c.804 §11] Every distributor who sells or possesses
for sale unstamped cigarettes in this state shall prepay all taxes
imposed under ORS 323.005 to 323.482 prior to the sale of the cigarettes
to any person in Oregon by purchasing cigarette tax stamps sold pursuant
to ORS 323.005 to 323.482 and affixing those stamps to the unstamped
packages of cigarettes. [2003 c.804 §3] Every
distributor engaged in business in this state and selling or accepting
orders for cigarettes with respect to the sale of which the taxes imposed
by ORS 323.005 to 323.482 are inapplicable shall, at the time of making
the sale or accepting the order or, if the purchaser is not then
obligated to pay the taxes with respect to the distribution of the
cigarettes, at the time the purchaser becomes so obligated, collect the
tax from the purchaser, if the purchaser is other than a licensed
distributor, and shall give to the purchaser a receipt therefor in the
manner and form prescribed by the Department of Revenue. [1965 c.525 §27;
1981 c.797 §8] Manufacturers may
enter into agreements with the Department of Revenue for the prepayment
of the tax on nonexempt cigarettes given away for advertising and any
other purpose. [1965 c.525 §32]
(1) Unless the contrary is established, it shall be presumed that all
cigarettes acquired by a distributor are untaxed cigarettes, and that all
cigarettes manufactured in this state or transported to this state, and
no longer in the possession of the distributor, have been distributed.
(2) All taxes paid pursuant to the provisions of ORS 323.005 to
323.482 are intended to be direct taxes on the retail consumer for which
required prepayment, through the purchase and affixation of tax stamps,
is only to achieve convenience and facility in the collection and
administration of the tax. When the tax is paid by any person other than
the retail consumer, the payment shall be considered an advance payment
to be added to the price of the cigarette and recovered from the retail
consumer. Except for a person selling cigarettes through a vending
machine or machines, any person selling cigarettes at retail shall state
or separately display in the retail premises a notice of the amount of
the tax included in the selling price and charged or payable pursuant to
ORS 323.005 to 323.482. The provisions of this subsection do not affect
the method of prepayment of the tax as provided by ORS 323.005 to
323.482. [1965 c.525 §§28,31; 2003 c.804 §12](License and Bond) (1) Any person engaging or seeking
to engage in the sale of cigarettes as a distributor shall file an
application for a distributor’s license with the Department of Revenue.
The application shall be on a form prescribed by the department.
(2) A distributor shall apply for and obtain a license for each
place of business at which the distributor engages in the business of
distributing cigarettes. A fee may not be charged for the license. For
the purposes of this section, a vending machine in and of itself is not a
place of business.
(3) A person may not engage in the business of distributing
cigarettes to other persons in this state without a license. [1965 c.525
§34; 2003 c.804 §13]A person who
files an application for a distributor’s license under ORS 323.105 shall
include with the application a written statement certifying that the
person will comply with the provisions of ORS 180.435 and 180.440. [2003
c.801 §14] (1) Any person engaging or seeking to
engage in the sale of cigarettes as a wholesaler shall file an
application for a wholesaler’s license with the Department of Revenue.
The application shall be on a form prescribed by the department. A person
may not engage in business as a wholesaler without a license. A
wholesaler’s license may be canceled, suspended, revoked or reinstated by
the department as in the case of a distributor’s license pursuant to ORS
323.140.
(2) A wholesaler is subject to all the requirements of ORS 323.005
to 323.482 imposed upon distributors relating to making, preserving and
supplying records necessary to effective administration by the department.
(3) A wholesaler is subject to all penalties applicable to a
distributor for a violation of the provisions of ORS 323.005 to 323.482.
[1967 c.193 §3; 1999 c.21 §58; 2003 c.804 §14] The
Department of Revenue, to insure compliance with ORS 323.005 to 323.482,
shall require a licensee or an applicant for a license as distributor to
deposit with it such security as the department may determine. The amount
of the security shall be fixed by the department but shall not be greater
than two times the estimated average monthly liability shown in the
monthly reports, determined in such manner as the department deems
proper. The amount of the security may be increased or decreased by the
department subject to the limitations herein provided. Except as provided
in ORS 323.120, the security shall be in the form of a bond or bonds
executed by the distributor as principal and by a corporation, authorized
to engage in business as a surety company in Oregon under ORS 742.350 to
742.370, as surety, payable to the State of Oregon through its Department
of Revenue, conditioned upon the payment of all taxes, penalties and
other obligations of the distributor arising under ORS 323.005 to
323.482. [1965 c.525 §35; 1995 c.79 §180] Every bond shall
contain a provision substantially to the effect that when the surety
exercises its right to withdraw as surety, the withdrawal shall be
effective on the first day of the calendar month after receipt of the
notice by the Department of Revenue if the notice is received on or
before the 15th day of the month, otherwise the withdrawal shall be
effective on the first day of the second calendar month after receipt of
the notice by the department. [1965 c.525 §36] In lieu of a bond or bonds a distributor,
under such conditions as the Department of Revenue may prescribe, may
deposit with the State Treasurer an amount of lawful money equivalent to
the amount of the bond or bonds otherwise required, or the distributor
may deposit an irrevocable letter of credit issued by an insured
institution, as defined in ORS 706.008, or readily salable bonds or other
obligations of the United States, the State of Oregon, or any county of
this state of an actual market value of not less than the amount of the
bond or bonds otherwise required by ORS 323.005 to 323.482. The State
Treasurer shall immediately notify the department as to the time of
receipt and the amount of money or value of the irrevocable letter of
credit or of bonds received by the State Treasurer. [1965 c.525 §37; 1991
c.331 §54; 1997 c.631 §459] Upon receipt of
a certificate of the Department of Revenue setting forth the amount of a
distributor’s delinquencies, the State Treasurer shall pay to the
department the amount so certified from the money deposited with the
State Treasurer by the distributor or from the amounts received from the
sale of bonds or other obligations deposited with the State Treasurer by
the distributor. Securities deposited with the State Treasurer which have
a prevailing market price may be sold by the State Treasurer for the
purposes of this section at private sale at a price not lower than the
prevailing market price thereof. [1965 c.525 §38](1) Upon receipt of a completed application, the
statement required by ORS 323.106 and bonds or other security required by
the Department of Revenue under ORS 323.005 to 323.482, the department
may issue a distributor’s license to the applicant. A separate license
shall be issued for each place of business of the distributor within the
state. A license is valid only for engaging in business as a distributor
at the place designated on the license. The license shall at all times be
conspicuously displayed at the place for which issued. The license is not
transferable and is valid until suspended or revoked.
(2) The department may not issue a license to an applicant if the
department determines or has reason to believe that the applicant will
not comply with the provisions of ORS 323.005 to 323.482 or any other
state or federal cigarette tax law.
(3) Notwithstanding ORS 305.280 or 323.416, a decision by the
department not to issue a license to an applicant may be appealed by the
applicant to the magistrate division of the tax court within 30 days of
the date of the decision of the department in the manner prescribed in
ORS 305.404 to 305.560.
(4) For purposes of this section, an application to renew a
distributor’s license shall be considered the same as an application for
an initial distributor’s license. [1965 c.525 §39; 2003 c.801 §17; 2003
c.804 §15]
(1) The Department of Revenue may cancel, revoke or suspend the license
held by a distributor whenever the distributor fails to:
(a) Pay any tax or penalty due under ORS chapter 323;
(b) Otherwise comply with any provision of ORS chapter 323 or any
rule thereunder; or
(c) Comply with any other state or federal cigarette tax law.
(2) The department may not issue a new license to a distributor
whose license has been revoked unless the department is satisfied that
the distributor will comply with the provisions of ORS chapter 323 and
the rules of the department.
(3) If the department decides to refuse to renew a license, or
decides to suspend or revoke a license, the distributor may appeal to the
tax court.
(4) Notwithstanding ORS 305.280 or 323.416, an appeal of a decision
of the department under subsection (1) of this section may be made to the
magistrate division of the tax court within 30 days of the decision in
the manner provided in ORS 305.404 to 305.560. [1965 c.525 §41; 1971
c.734 §37; 1995 c.650 §42; 2003 c.804 §17](Tax Stamps) (1) The Department of Revenue shall furnish
cigarette tax stamps for sale to distributors required under ORS 323.068
to prepay the taxes imposed under ORS 323.005 to 323.482.
(2) Stamps shall be designed according to specifications and
denominations prescribed by the department. The department shall
prescribe by rule the method and manner in which stamps are to be affixed
to packages of cigarettes and may provide for the cancellation of stamps.
(3) An appropriate stamp shall be affixed to each package of
cigarettes prior to the distribution of the cigarettes. [1965 c.525
§§43,44; 1999 c.62 §2; 2003 c.804 §18] (1) Unaffixed stamps shall not be sold,
exchanged or in any manner transferred by a distributor to another person
without prior written approval of the Department of Revenue.
(2) With the approval of the Oregon Department of Administrative
Services, the Department of Revenue may enter into contracts with
financial institutions to act as the department’s agents for the sale of
stamps and matters relating to the sale of stamps. [1965 c.525 §45; 1999
c.62 §3] (1) Stamps
shall be sold to a licensed distributor at their denominated values less
a sum allowed as compensation to a distributor for services in affixing
stamps to packages as required by ORS 323.005 to 323.482. Payment for
stamps shall be made at the time of purchase, provided that a licensed
distributor, subject to the conditions and provisions of ORS 323.005 to
323.482, may be permitted to defer stamp payments.
(2) The compensation to each distributor for each Oregon stamp sold
during the calendar year shall be $0.004 per stamp.
(3) Payment for stamps shall be made in the form required by the
Department of Revenue. [1965 c.525 §47; 1983 c.683 §1; 1999 c.62 §4; 2002
s.s.3 c.2 §10; 2003 c.804 §18a] A licensed
distributor may apply to the Department of Revenue to fix the maximum
amount of deferred-payment purchases of stamps that the distributor may
make in any calendar month. Upon receipt of the application and the
security deposit required pursuant to ORS 323.110, the department shall
fix the maximum amount. The department at any time may designate the
sales locations where the distributor may make deferred-payment purchases
of stamps and fix the amount of deferred-payment purchases that the
distributor may make within each monthly period at the designated sales
location. [1965 c.525 §48; 1999 c.62 §5] A distributor shall
authorize in writing those persons who may order purchases of stamps for
the account of the distributor at a location where stamps are sold. The
authorization shall continue in effect until written notice of revocation
of the authority is delivered at the sales location in a manner
prescribed by the Department of Revenue. [1965 c.525 §50; 1999 c.62 §6] (1)
Amounts owing for stamps purchased on the deferred-payment basis for a
calendar month shall be due and payable on or before the 20th day of the
next calendar month. Payments shall be made by a remittance payable to
the Department of Revenue.
(2) The department for good cause may extend the time for paying
any amount owing for stamps purchased on the deferred-payment basis. The
extension may not exceed five days. The extension may not be granted
unless a request for the extension is filed with the department within or
prior to the period for which the extension may be granted. [1965 c.525
§§49,53; 1999 c.62 §7] The Department of Revenue may suspend
without prior notice a distributor’s privilege to purchase stamps on the
deferred-payment basis or may reduce the amount of permissible monthly
purchases fixed for the distributor, if the distributor fails to pay
promptly for stamps when payment is due, if the bond or bonds of the
distributor are canceled, become void, impaired, or unenforceable for any
reason, or if in the opinion of the department, collection of any amounts
unpaid or due from the distributor under ORS 323.005 to 323.482 are
jeopardized. [1965 c.525 §51; 1999 c.62 §8] Any
distributor who fails to pay any amount owing to the purchase of stamps
within the time required, shall pay a penalty of 10 percent of the amount
due in addition to the amount plus interest at the rate established under
ORS 305.220 for each month, or fraction thereof, from the date on which
the amount became due and payable until the date of payment. [1965 c.525
§52; 1982 s.s.1 c.16 §17; 1999 c.62 §9](Administration) Every manufacturer selling and
shipping cigarettes into this state to other than a distributor licensed
by this state shall deliver with each sale or consignment of cigarettes a
written statement containing the name or trade name of both the seller
and the purchaser, the date of delivery, the quantity of cigarettes, and
the trade name or brand thereof, and within 10 days shall deliver a
duplicate of each such statement to the Department of Revenue. Each
cancellation or modification of the written statement and any other
information necessary to the reconciliation of accounts shall be filed
with the department by the manufacturer at the earliest possible date.
[1965 c.525 §54]Every distributor and dealer or
other person engaging in the sale of cigarettes through the use of one or
more vending machines, must affix in a conspicuous place on each machine,
a card or decal bearing the name, telephone number, address, and place of
business of the operator or owner who regularly places cigarettes in the
vending machine. If a person fails to comply with this section the
Department of Revenue may seize the vending machine and its contents.
[1971 c.260 §2 (enacted in lieu of 323.210)] Every distributor and
dealer or other person engaging in the sale of cigarettes through the use
of one or more vending machines shall keep a detailed record of each
vending machine operated for the sale of cigarettes, showing the location
of the machine and the date of placing the machine on location. [1965
c.525 §56] Any distributor
and any person dealing in, transporting or storing cigarettes in this
state shall keep, on the premises, receipts, invoices and other pertinent
records related to cigarette transactions, transportation or storage, in
such form as the Department of Revenue may require. Each record shall be
preserved for five years from the time to which it relates. During the
five-year period and at any time prior to destruction of records, the
department may give written notice to a distributor not to destroy
records described in the notice without written permission from the
department. Notwithstanding other provisions of law, reports and returns
filed with the department shall be preserved by the department for at
least five years. [1965 c.525 §57; 2003 c.804 §19] (1) Any transporter
seeking to possess or acquire untaxed cigarettes for transportation or
transport upon the highways, roads or streets of this state shall obtain
a permit from the Department of Revenue authorizing the transporter to
possess or acquire for transportation or transport the untaxed
cigarettes, and shall have the permit in the transporting vehicle during
the period of transportation of the cigarettes. The application for the
permit shall be in such form and shall contain such information as may be
prescribed by the department. The department may issue a permit for a
single load or shipment or for a number of loads or shipments to be
transported under specified conditions.
(2) Each transporter who transports, or possesses or acquires for
the purpose of transporting, untaxed cigarettes upon the highways, roads
or streets of this state is required to have within the transporting
vehicle invoices or bills of lading covering the shipment of cigarettes
being transported that show the name and address of the consignor or
seller, the name and address of the consignee or purchaser and the
quantity and brands of cigarettes transported. [1965 c.525 §58; 1985 c.78
§2; 2003 c.804 §20]The Department of Revenue or its authorized representative, upon
oral or written demand, may make such examinations of the books, papers,
records and equipment of persons dealing in, transporting, or storing
cigarettes and such other investigations as it may deem necessary in
carrying out the provisions of ORS 323.005 to 323.482. In addition to any
other reports required under ORS 323.005 to 323.482, the department may,
by rule or otherwise, require additional, other, or supplemental reports
from distributors, dealers, transporters, common and private carriers,
warehousemen, bailees and other persons and prescribe the form, including
verification, of the information to be given and the times for filing of
such additional, other or supplemental reports. [1965 c.525 §59] (1) The Department of Revenue shall
have authority, by order or subpoena to be served with the same force and
effect and in the same manner that a subpoena is served in a civil action
in the circuit court, or the Oregon Tax Court, to require the production
at any time and place it may designate of any books, papers, accounts or
other information necessary to the carrying out of ORS 323.005 to
323.482, and may require the attendance of any person having knowledge in
the premises, and may take testimony and require proof material for the
information, with power to administer oaths to such person.
(2) If any person fails to comply with any subpoena or order of the
department or produce or permit the examination or inspection of any
books, papers, records and equipment pertinent to any investigation or
inquiry under ORS 323.005 to 323.482, or to testify to any matter
regarding which the person may be lawfully interrogated, the department
may apply to the Oregon Tax Court or to the circuit court of the county
in which the person resides or where the person may be found for an order
to the person to attend and testify, or otherwise to comply with the
demand or request of the department. The application to the court shall
be by ex parte motion upon which the court shall make an order requiring
the person against whom it is directed to comply with the request on
demand of the department within 10 days after the service of the order,
or such further time as the court may grant, or to justify the failure
within that time. The order shall be served upon the person to whom it is
directed in the manner required by this state for service of process,
which service shall be required to confer jurisdiction upon the court.
Failure to obey any order issued by the court under this section is
contempt of court. The remedy provided by this section shall be in
addition to other remedies, civil or criminal, existing under the tax
laws or other laws of this state. [1965 c.525 §60] Whenever the
Department of Revenue has good reason to believe that any cigarettes are
being kept, sold, offered for sale or given away in violation of the
provisions of ORS 323.005 to 323.482 or rules issued under its authority,
it may make affidavit of that fact, describing the place or thing to be
searched, before any judge of any court in this state, and such judge
shall issue a search warrant directed to the sheriff, any constable,
police officer, or duly authorized agent of the department, commanding
the sheriff, constable, police officer or duly authorized agent of the
department to enter and diligently search any building, room in a
building, place or vehicle as may be designated in the affidavit and
search warrant, and to seize such cigarettes together with any vending
machine or receptacle containing them and any vehicle carrying them, and
to arrest the person in possession or control thereof. If, upon the
return of such warrant, it shall appear that tax payable upon the
cigarettes seized has not been paid or prepaid, if prepayment is required
under ORS 323.068, the cigarettes, containers and vehicle, if any, shall
be forfeited to the state and disposed of pursuant to ORS 323.245 or
323.248. [1965 c.525 §61; 2003 c.804 §21](1) Whenever the Department of Revenue
discovers any cigarettes subject to tax under ORS 323.005 to 323.482 and
with respect to which the tax has not been paid or prepaid, if prepayment
is required under ORS 323.068, it is hereby authorized and empowered
forthwith to seize and take possession of the untaxed cigarettes together
with any vending machine or receptacle in which they are held for sale
and any vehicle in which they are being transported. The seized
cigarettes, vending machine, receptacle or vehicle, not including money
contained in the vending machine or receptacle, shall be forfeited to the
state, and the clear proceeds shall be deposited with the State Treasury
in the Common School Fund. The department may, within a reasonable time
thereafter, by public notice at least 20 days before the date of sale,
sell the forfeited vending machines, receptacles and vehicles at public
sale. Forfeited cigarettes constitute contraband cigarettes subject to
ORS 323.248.
(2) Notwithstanding the provisions of subsection (1) of this
section, the person from whom cigarettes were seized may redeem any
vending machine, receptacle or vehicle seized at the time the cigarettes
are seized, within 20 days from the date of seizure, by the payment of
the tax due together with a penalty of 100 percent thereof and the costs
incurred in the seizure proceeding, which total payment may not be less
than $100. The seizure, sale or redemption does not relieve the person
from fine or imprisonment as provided for violation of any provision of
ORS 323.005 to 323.482.
(3) Notwithstanding the provisions of subsection (1) of this
section, the owner of a seized vending machine, receptacle or vehicle
shall have the right of redemption provided in subsection (2) of this
section for a period of 60 days from the date of the seizure if the owner
claims that right prior to the redemption provided for in subsection (2)
of this section.
(4) Notwithstanding the provisions of subsections (1), (2) and (3)
of this section, the owner of a vending machine that is seized for
failure to comply with ORS 323.211 may redeem the seized vending machine
within a period of 60 days from the date of the seizure by the payment of
$25 plus costs of $15 or the actual costs incurred in the seizure
proceedings, whichever is greater. [1965 c.525 §62; 1971 c.260 §3; 1987
c.858 §4; 2003 c.804 §22]
(1) Any contraband cigarettes found by an authorized representative of
the Department of Revenue or any law enforcement agency may be
immediately seized and subject to forfeiture. If seized and forfeited
under this subsection, the cigarettes shall be destroyed.
(2) Notwithstanding ORS 305.280 or 323.416, a seizure and
forfeiture made under this section may be appealed to the magistrate
division of the tax court within 30 days of the date of the seizure in
the manner provided in ORS 305.404 to 305.560. [2003 c.804 §29] To
promote administrative efficiency, the Department of Revenue may transmit
information obtained under ORS 323.005 to 323.482 to the proper officers
of governmental units outside Oregon which tax tobacco products and which
reciprocate in the exchange of relevant information. [1965 c.525 §63] The Department of Revenue may pay
rewards to persons, other than officers or employees of the department,
furnishing information that leads to the recovery of tax from other
persons guilty of violating the provisions of ORS 323.005 to 323.482.
Such rewards shall not exceed 10 percent of the net amount of tax,
penalty and interest recovered by suit or otherwise and shall be paid
only in cases where such evasions of tax would not be disclosed by the
audit of reports or from other information available to the department.
[1965 c.525 §64](Collections and Refunds) If a distributor fails to
make payment for stamps when payment is due, the Department of Revenue
may compute and determine from any available records and information the
amount required to be paid, including interest and penalties. One or more
determinations may be made of the amount due for one or for more than one
purchase. In making a determination the department may offset
overpayments with respect to purchases of stamps against underpayments
for purchases and interest and penalties on the underpayments. The
department shall give the distributor written notice of its determination
in the manner required pursuant to ORS 323.403. Except in the case of
fraud, every notice of a determination made under ORS 323.005 to 323.482
shall be given within three years of the due date for payment of the
purchase of stamps. [1965 c.525 §65; 1999 c.62 §10] (1)
If an increase in cigarette tax imposed under ORS 323.005 to 323.482 is
provided by law and the increase provided is for a limited time period,
then at such time as the increase expires and is not reenacted or
otherwise by law continued, the Department of Revenue may enter into a
cigarette tax refund or credit agreement with any distributor. The
cigarette tax refund or credit agreement may provide for a mutually
agreed upon amount as a refund or credit to the distributor of any
cigarette tax attributable to the increase precollected for distributions
of cigarettes occurring on or after the date the increase expires.
(2) Subsection (1) of this section is in addition to and not in
lieu of other laws allowing cigarette tax refunds or credits.
(3) There is continuously appropriated to the Department of Revenue
from the suspense account established under ORS 293.445 and 323.455, the
amounts necessary to make refunds agreed upon under subsection (1) of
this section. [1983 c.683 §10; 1987 c.758 §12](1) The Department of Revenue shall,
pursuant to rule, refund or credit to a distributor the denominated
values, less the discount given on their purchase, of:
(a) Any unused or damaged stamps; or
(b) Stamps affixed to packages of cigarettes that, prior to or
after distribution, have become unfit for use or unsalable or have been
destroyed, returned for credit or replaced, if the department has proof
of the cigarettes not being used for smoking in the State of Oregon.
(2) Interest shall be computed, allowed and paid with respect to a
refund made under this section, at the rate established under ORS 305.220
for each month or fraction of a month during a period beginning 45 days
after the receipt by the department of a claim for refund. [1965 c.525
§§68,69; 1989 c.626 §10; 1999 c.62 §11; 2001 c.114 §48] No refund or credit
for amounts overpaid for the purchase of stamps shall be allowed or
approved after three years from the due date for payment of the purchase
for which the overpayment was made, or with respect to a determination
made pursuant to ORS 323.005 to 323.482, after six months from the date
the determination becomes final, or after six months from the date of
overpayment, whichever period expires the later, unless a claim therefor
is filed with the Department of Revenue within the applicable period.
[1965 c.525 §70; 1999 c.62 §12] Unless the refund is one
described in ORS 323.320, interest shall be computed, allowed and paid
upon any overpayment for the purchase of stamps at the rate established
under ORS 305.220 for each month or fraction of a month during a period
beginning 45 days after the due date for payment of the purchase for
which the overpayment was made or the date of the payment, whichever is
the later, to the time the refund is made. No refund or credit shall be
made of any interest imposed upon the claimant with respect to the amount
being refunded or credited. [1965 c.525 §71; 1987 c.758 §1; 1989 c.626
§11; 1999 c.62 §13] (1) Each
distributor shall, along with the report filed as prescribed under ORS
323.340, submit quarterly a remittance payable to the Department of
Revenue for the amount of tax due, but not yet paid or prepaid, under ORS
323.005 to 323.482.
(2) If the tax imposed under ORS 323.005 to 323.482 is not prepaid
through the use of stamps, the tax shall be due and payable monthly on or
before the 20th day of the month following the calendar month in which a
distribution of cigarettes occurs.
(3) In the case of a sale of cigarettes on the facilities of a
common carrier for which the tax is imposed pursuant to ORS 323.040, the
tax shall be due and payable monthly on or before the 20th day of the
month following the calendar month in which a sale of cigarettes on the
facilities of the carrier occurs. [1965 c.525 §72; 1999 c.62 §14; 2003
c.804 §23] (1) On or before
the 20th day of January, April, July and October, every distributor shall
file on forms prescribed by the Department of Revenue a report containing
any information the department may require to carry out the purposes of
ORS 323.005 to 323.482.
(2) A distributor holding more than one distributor’s license and
having centralized accounting may file one composite report combining the
information required of each license location under subsection (1) of
this section. [1965 c.525 §73; 1971 c.416 §1; 1999 c.62 §15] (1) On or
before the 20th day of January, April, July and October, every person who
is not a distributor and who had cigarette activity in this state during
the preceding calendar quarter shall file on forms prescribed by the
Department of Revenue a report containing any information the department
may require to carry out the purposes of ORS 323.005 to 323.482.
(2) If the department determines that a report filed under this
section reflects cigarette activity that constitutes distribution in this
state, the department may deem the individual a distributor subject to
the provisions of ORS 323.005 to 323.482 that relate to distributors and
the distribution of cigarettes. [2001 c.5 §4]On or before the 20th day of each month the common
carriers and authorized persons specified in ORS 323.040 shall file with
the Department of Revenue a report of the sales of cigarettes made by
them on the facilities of the carriers in Oregon in the preceding
calendar month in such detail and form as the department may prescribe,
submitting with the report the amount of the tax due under ORS 323.040.
[1965 c.525 §77] Any consumer or user subject to the
tax resulting from a distribution of cigarettes and from whom the tax has
not been paid shall on or before the 20th day of the month following
receipt of cigarettes file with the Department of Revenue a report of the
amount of cigarettes received by the consumer or user in the preceding
calendar month in the detail and form as the department may prescribe,
submitting with the report the amount of tax due. [1965 c.525 §78; 2003
c.804 §24]
(1) The Department of Revenue for good cause may extend the time for
making any report or paying any amount of tax required under ORS 323.005
to 323.482. The extension may be granted at any time provided a request
is filed with the department within or prior to the period for which the
extension may be granted. The department may not grant an extension of
more than 30 days.
(2) Any person to whom an extension is granted shall pay, in
addition to the amount of tax, interest at the rate established under ORS
305.220 for each month, or fraction of a month, from the date on which
the amount of tax would have been due without the extension to the date
of payment. [1965 c.525 §76; 1982 s.s.1 c.16 §19; 2003 c.46 §47] The provisions of
ORS 314.400 apply to a person required to pay a tax due or file a report
or return under ORS 323.005 to 323.482 who fails to timely pay the tax
due or who fails to timely file the report or return required. [1999 c.62
§17 (enacted in lieu of 323.380)] (1) If the Department of Revenue
believes that the collection of any amount of tax required to be paid by
any person under ORS 323.005 to 323.482 will be jeopardized by delay, it
shall thereupon make a determination of the amount of tax, noting that
fact upon the determination. The amount determined is immediately due and
payable, with interest and penalty as provided in ORS 323.381.
(2) If the amount of the tax, interest, and penalty specified in
the jeopardy determination is not paid within 20 days after service upon
the person of notice of the determination, the determination becomes
final, unless a petition for redetermination is filed within the 20 days.
(3) The person against whom a jeopardy determination is made may
petition for the redetermination thereof pursuant to ORS 323.416. The
person shall, however, file the petition for redetermination with the
department within 20 days after the service upon the person of notice of
the determination. The person shall at the time of filing the petition
for redetermination deposit with the department such security as it may
deem necessary to insure compliance with ORS 323.005 to 323.482. The
security may be sold by the department at public sale if it becomes
necessary in order to recover any amount due. Notice of the sale may be
served upon the person who deposited the security personally or by mail
in the same manner as prescribed pursuant to ORS 323.403. Upon any such
sale, the surplus, if any, above the amount due under ORS 323.005 to
323.482 shall be returned to the person who deposited the security. [1965
c.525 §80; 1999 c.62 §18](1) If any tax
imposed by ORS 323.005 to 323.482 or any portion of such tax is not paid
within 30 days after notice of a deficiency determination is given
pursuant to ORS 323.403 or of a tax determined under ORS 323.385, and no
provision is made to secure the payment thereof by bond, deposit or
otherwise, pursuant to regulations promulgated by the Department of
Revenue, the department shall:
(a) Assess a collection charge of $5 if the sum of the tax, penalty
and interest then due exceeds $10.
(b) Issue a warrant directed to the sheriff of any county of the
state commanding the sheriff to levy upon and sell the real and personal
property of the taxpayer found within that county, for the payment of the
amount of the tax, with the added penalties, interest, collection charge
and the sheriff’s cost of executing the warrant, and to return such
warrant to the department and pay to it the money collected by virtue
thereof by a time to be therein specified, not less than 60 days from the
date of the warrant.
(2) The sheriff shall, within five days after the receipt of the
warrant, record with the clerk of the county a copy thereof, and
thereupon the clerk shall enter in the County Clerk Lien Record the name
of the taxpayer mentioned in the warrant, and the amount of the tax or
portion thereof and penalties and interest for which the warrant is
issued and the date when such copy is recorded. Thereupon the amount of
the warrant so recorded shall become a lien upon the title to and
interest in property of the taxpayer against whom it is issued in the
same manner as a judgment that creates a judgment lien under ORS chapter
18. The sheriff thereupon shall proceed upon the same in all respects,
with like effect and in the same manner prescribed by law in respect to
executions issued against property upon judgment of a court of record,
and shall be entitled to the same fees for services in executing the
warrant, to be added to and collected as a part of the warrant liability.
(3) In the discretion of the department a warrant of like terms,
force and effect may be issued and directed to any agent authorized to
collect income taxes, and in the execution thereof the agent shall have
all the powers conferred by law upon sheriffs, but is entitled to no fee
or compensation in excess of actual expenses paid in the performance of
such duty.
(4) If a warrant is returned not satisfied in full, the department
shall have the same remedies to enforce the claim for taxes against the
taxpayer as if the people of the state had recovered judgment against the
taxpayer for the amount of the tax. [1971 c.417 §2; 1983 c.696 §17; 1985
c.761 §21; 1999 c.62 §19; 2003 c.576 §204]The Department of Revenue may employ the
provisions of ORS 305.182 to file warrants issued against a taxpayer for
unpaid cigarette taxes in the Office of the Secretary of State. [1995
c.53 §6](1) The Department of Revenue is authorized to
enter into a cigarette tax refund agreement with the governing body of
any Indian reservation in Oregon. The agreement may provide for a
mutually agreed upon amount as a refund to the governing body of any
cigarette tax prepaid on sales of cigarettes to Indians upon the
reservation and paid into the State Treasury. This provision is in
addition to other laws allowing tax refunds.
(2) There is continuously appropriated to the Department of Revenue
from the suspense account established under ORS 293.445 and 323.455, the
amounts necessary to make the refunds provided by subsection (1) of this
section. [1979 c.581 §§1,2,3; 1987 c.758 §13; 2003 c.804 §25] Except as otherwise provided
in ORS 323.005 to 323.482 or where the context requires otherwise, the
provisions of ORS chapters 305 and 314 as to the audit and examination of
returns, periods of limitation, determination of and notices of
deficiencies, assessments, liens, delinquencies, claims for refund and
refunds, conferences, appeals to the Oregon Tax Court, stays of
collection pending appeal, confidentiality of returns and the penalties
relative thereto, and the procedures relating thereto, shall apply to the
determinations of taxes, penalties and interest under ORS 323.005 to
323.482. [1999 c.62 §21] Notwithstanding ORS
323.403, information on the license of a distributor or wholesaler is not
confidential. The Department of Revenue may publicly disclose or publish
a list of names of distributors or wholesalers, along with any other
information set forth on a license. [2003 c.804 §16](Appeals) (1) Except as otherwise provided in
ORS 323.005 to 323.482, any person aggrieved by an act or determination
of the Department of Revenue or its authorized agent under ORS 323.005 to
323.482 may appeal to the Oregon Tax Court in the time and manner
provided in ORS 305.404 to 305.560. These appeal rights shall be the
exclusive remedy available to determine the person’s liability for the
taxes imposed by ORS 323.005 to 323.482.
(2) An appeal to the Oregon Tax Court under ORS 323.005 to 323.482
stays proceedings to collect any unpaid tax unless the tax court believes
the collection of the tax will be jeopardized by delay or otherwise
orders collection proceedings to continue. [1977 c.870 §56 (enacted in
lieu of 323.405, 323.410 and 323.415); 1995 c.650 §43; 2003 c.804 §25a] (1) The
violation of any provision of ORS 323.005 to 323.482 or any rule adopted
thereunder shall be deemed an act committed in part at the office of the
Department of Revenue in Salem, Oregon, and venue shall lie in Marion
County, Oregon.
(2) The certificate of the department to the effect that a tax has
not been prepaid or paid, that a return has not been filed or that
information has not been supplied, as required by or under the provisions
of ORS 323.005 to 323.482, shall be prima facie evidence that the tax has
not been prepaid or paid, that the return has not been filed or that the
information has not been supplied. [1965 c.525 §85; 2003 c.804 §26](Enforcement)(1) In addition to all other remedies specified in ORS 323.005
to 323.482, action may be brought by the Attorney General, at the request
of the Department of Revenue, in the name of the state, to recover the
amount of any taxes, penalties and interest due under ORS 323.005 to
323.482, if the action for recovery is commenced within three years from
the time the tax is due to be paid.
(2) The Attorney General shall have authority to investigate any
criminal violation of ORS 323.005 to 323.482. [1965 c.525 §86; 2003 c.804
§27](1) The Department of Revenue shall enforce the provisions of
ORS 323.005 to 323.482 and may prescribe, adopt and enforce rules and
regulations relating to the administration and enforcement of ORS 323.005
to 323.482.
(2) The department may employ accountants, auditors, investigators,
assistants, and clerks necessary for the efficient administration of ORS
323.005 to 323.482, or perform any other duties imposed by ORS 323.005 to
323.482 upon the department. [1965 c.525 §§87,88; 1995 c.650 §44](Distribution of Certain Revenues) (1) All
moneys received by the Department of Revenue from the tax imposed by ORS
323.030 (1) shall be paid over to the State Treasurer to be held in a
suspense account established under ORS 293.445. Amounts necessary to pay
the expenses incurred by the Department of Revenue and to reimburse the
Oregon State Police and the Department of Justice for the administration
and enforcement of ORS 323.005 to 323.482 are continuously appropriated
to the Department of Revenue from the suspense account. After the payment
of administrative and enforcement expenses and refunds, 89.65 percent
shall be credited to the General Fund, 3.45 percent is appropriated to
the cities of this state, 3.45 percent is appropriated to the counties of
this state and 3.45 percent is continuously appropriated to the
Department of Transportation for the purpose of financing and improving
transportation services for elderly and disabled individuals as provided
in ORS 391.800 to 391.830.
(2) The moneys so appropriated to cities and counties shall be paid
on a monthly basis within 35 days after the end of the month for which a
distribution is made. Each city shall receive such share of the money
appropriated to all cities as its population, as determined under ORS
190.510 to 190.590 last preceding such apportionment, bears to the total
population of the cities of the state, and each county shall receive such
share of the money as its population, determined under ORS 190.510 to
190.590 last preceding such apportionment, bears to the total population
of the state.
(3) The moneys appropriated to the Department of Transportation
under subsection (1) of this section shall be distributed and transferred
to the Elderly and Disabled Special Transportation Fund established by
ORS 391.800 at the same time as the cigarette tax moneys are distributed
to cities and counties under this section.
(4) Of the moneys credited to the General Fund under this section
51.92 percent shall be dedicated to funding the maintenance and expansion
of the number of persons eligible for medical assistance under the Oregon
Health Plan, or to funding the maintenance of the benefits available
under the Oregon Health Plan, or both, and 5.77 percent shall be credited
to the Tobacco Use Reduction Account established under ORS 431.832. [1965
c.525 §93; 1969 c.299 §1; 1971 c.535 §7; 1975 c.527 §1; 1981 c.797 §7;
1985 c.816 §13; 1989 c.224 §52; 1989 c.866 §7; 1997 c.2 §2; 1999 c.21
§59; 2001 c.114 §49; 2003 c.804 §27a]Note: The amendments to 323.455 by section 27b, chapter 804, Oregon
Laws 2003, become operative January 1, 2008. See section 67, chapter 804,
Oregon Laws 2003. The text that is operative on and after January 1,
2008, is set forth for the user’s convenience.
323.455. (1) All moneys received by the Department of Revenue from
the tax imposed by ORS 323.030 (1) shall be paid over to the State
Treasurer to be held in a suspense account established under ORS 293.445.
After the payment of refunds, 89.65 percent shall be credited to the
General Fund, 3.45 percent is appropriated to the cities of this state,
3.45 percent is appropriated to the counties of this state and 3.45
percent is continuously appropriated to the Department of Transportation
for the purpose of financing and improving transportation services for
elderly and disabled individuals as provided in ORS 391.800 to 391.830.
(2) The moneys so appropriated to cities and counties shall be paid
on a monthly basis within 35 days after the end of the month for which a
distribution is made. Each city shall receive such share of the money
appropriated to all cities as its population, as determined under ORS
190.510 to 190.590 last preceding such apportionment, bears to the total
population of the cities of the state, and each county shall receive such
share of the money as its population, determined under ORS 190.510 to
190.590 last preceding such apportionment, bears to the total population
of the state.
(3) The moneys appropriated to the Department of Transportation
under subsection (1) of this section shall be distributed and transferred
to the Elderly and Disabled Special Transportation Fund established by
ORS 391.800 at the same time as the cigarette tax moneys are distributed
to cities and counties under this section.
(4) Of the moneys credited to the General Fund under this section
51.92 percent shall be dedicated to funding the maintenance and expansion
of the number of persons eligible for medical assistance under the Oregon
Health Plan, or to funding the maintenance of the benefits available
under the Oregon Health Plan, or both, and 5.77 percent shall be credited
to the Tobacco Use Reduction Account established under ORS 431.832. (1) Moneys
received under ORS 323.031 shall be paid over to the State Treasurer to
be held in a suspense account established under ORS 293.445. Amounts
necessary to pay the expenses incurred by the Department of Revenue and
to reimburse the Oregon State Police and the Department of Justice for
the administration and enforcement of this section and ORS 323.031 are
continuously appropriated to the Department of Revenue from the suspense
account. After the payment of administrative and enforcement expenses and
refunds:
(a) 29.37/30 of the moneys shall be credited to the Oregon Health
Plan Fund established under ORS 414.109;
(b) 0.14/30 of the moneys are continuously appropriated to the
Oregon Department of Administrative Services for distribution to the
cities of this state;
(c) 0.14/30 of the moneys are continuously appropriated to the
Oregon Department of Administrative Services for distribution to the
counties of this state;
(d) 0.14/30 of the moneys are continuously appropriated to the
Department of Transportation to be distributed and transferred to the
Elderly and Disabled Special Transportation Fund established under ORS
391.800; and
(e) 0.21/30 of the moneys shall be credited to the Tobacco Use
Reduction Account established under ORS 431.832.
(2)(a) Moneys distributed to cities and counties under this section
shall be distributed to each city or county using the proportions used
for distributions made under ORS 323.455.
(b) Moneys shall be distributed to cities, counties and the Elderly
and Disabled Special Transportation Fund at the same time moneys are
distributed to cities, counties and the Elderly and Disabled Special
Transportation Fund under ORS 323.455. [2002 s.s.3 c.2 §2(3),(4); 2003
c.804 §5c(3),(4); 2005 c.94 §109]Note: The amendments to 323.457 by section 5e (3) and (4), chapter
804, Oregon Laws 2003, become operative January 1, 2008. See section 67,
chapter 804, Oregon Laws 2003. The text that is operative on and after
January 1, 2008, including amendments by section 110, chapter 94, Oregon
Laws 2005, is set forth for the user’s convenience.
323.457. (1) Moneys received under ORS 323.031 shall be paid over
to the State Treasurer to be held in a suspense account established under
ORS 293.445. After the payment of refunds:
(a) 29.37/30 of the moneys shall be credited to the Oregon Health
Plan Fund established under ORS 414.109;
(b) 0.14/30 of the moneys are continuously appropriated to the
Oregon Department of Administrative Services for distribution to the
cities of this state;
(c) 0.14/30 of the moneys are continuously appropriated to the
Oregon Department of Administrative Services for distribution to the
counties of this state;
(d) 0.14/30 of the moneys are continuously appropriated to the
Department of Transportation to be distributed and transferred to the
Elderly and Disabled Special Transportation Fund established under ORS
391.800; and
(e) 0.21/30 of the moneys shall be credited to the Tobacco Use
Reduction Account established under ORS 431.832.
(2)(a) Moneys distributed to cities and counties under this section
shall be distributed to each city or county using the proportions used
for distributions made under ORS 323.455.
(b) Moneys shall be distributed to cities, counties and the Elderly
and Disabled Special Transportation Fund at the same time moneys are
distributed to cities, counties and the Elderly and Disabled Special
Transportation Fund under ORS 323.455.(1)(a) A civil penalty may be imposed by
the Department of Revenue on any person who violates any provision of ORS
323.005 to 323.482.
(b) A civil penalty imposed under this subsection may not exceed
$1,000 per violation.
(c) A penalty imposed under this section may be appealed to the
magistrate division of the tax court. Appeal of a magistrate decision may
be made as provided in ORS 305.445 and 305.501.
(2) Any person required to obtain a license as a distributor under
ORS 323.005 to 323.482 who knowingly engages in business as a distributor
without a license or after a license has been suspended or revoked is
guilty of a Class C felony.
(3) Any person required to make, render, sign or verify any report
under ORS 323.005 to 323.482 who makes any false report with the intent
to defraud is guilty of a Class C felony.
(4)(a) Any transporter who knowingly violates the provisions of ORS
323.225 is guilty of a Class C felony.
(b) This subsection does not apply to a transporter who transports
or possesses or acquires for the purpose of transporting fewer than
60,000 cigarettes.
(5) Any person who knowingly violates any provisions of ORS 323.005
to 323.482, except as otherwise provided in this section, is guilty of a
Class A misdemeanor.
(6) Any person who files a fraudulent refund claim under ORS
323.320 is guilty of a Class C felony.
(7) Any person who, with intent to defraud, makes, alters, forges
or utters a false receipt or invoice recording a sale of cigarettes in
this state is guilty of a Class C felony.
(8) In addition to any other sentence the court may impose upon a
conviction under this section, the court may order the forfeiture of the
instrumentalities used in violating ORS 323.005 to 323.482 and the
proceeds resulting from a violation of ORS 323.005 to 323.482. [Formerly
323.990; 2003 c.804 §28](1) A person commits the crime of unlawful
distribution of cigarettes if the person knowingly sells or distributes,
possesses or transports for sale or distribution or imports for sale or
distribution cigarettes that do not comply with ORS 323.005 to 323.482 or
323.850 to 323.862, the Federal Cigarette Labeling and Advertising Act
(15 U.S.C. 1331 et seq.), 19 U.S.C. 1681a or section 5754 of the Internal
Revenue Code, or implementing regulations of the federal laws listed in
this subsection.
(2) The offense of unlawful distribution of cigarettes is
classified as follows:
(a) If the number of cigarettes involved in the offense over a
90-day period totals 12,000 or less, the offense is a Class A misdemeanor.
(b) If the number of cigarettes involved in the offense over a
90-day period totals more than 12,000 but 60,000 or less, the offense is
a Class C felony classified as crime category 3 of the sentencing
guidelines grid of the Oregon Criminal Justice Commission.
(c) If the number of cigarettes involved in the offense over a
90-day period totals more than 60,000 but 120,000 or less, the offense is
a Class C felony classified as crime category 5 of the sentencing
guidelines grid of the Oregon Criminal Justice Commission.
(d) If the number of cigarettes involved in the offense over a
90-day period totals more than 120,000, the offense is a Class B felony
classified as crime category 7 of the sentencing guidelines grid of the
Oregon Criminal Justice Commission.
(3) Cigarettes sold, distributed, possessed, transported or
imported in violation of subsection (1) of this section are contraband
and subject to seizure and forfeiture. If seized and forfeited under this
subsection, the cigarettes shall be destroyed.
(4) In addition to any other sentence the court may impose upon a
conviction under this section, the court may order the forfeiture of the
instrumentalities used in violating this section and the proceeds
resulting from a violation of this section.
(5) A person who manufactures, distributes or sells cigarettes and
who sustains a direct economic or commercial injury as a result of a
violation of subsection (1) of this section may bring in good faith an
action for appropriate injunctive relief.
(6) The penalties set forth in this section are in addition to and
not in lieu of any other applicable penalties or sanctions. [2001 c.696
§3; 2003 c.804 §30]TOBACCO PRODUCTS TAX As used in ORS
323.500 to 323.645, unless the context otherwise requires:
(1) “Business” means any trade, occupation, activity or enterprise
engaged in for the purpose of selling or distributing tobacco products in
this state.
(2) “Cigar” means a roll for smoking that is of any size or shape
and that is made wholly or in part of tobacco, irrespective of whether
the tobacco is pure or flavored, adulterated or mixed with any other
ingredient, if the roll has a wrapper made wholly or in greater part of
tobacco and if 1,000 of these rolls collectively weigh more than three
pounds. “Cigar” does not include a cigarette, as defined in ORS 323.010.
(3) “Consumer” means any person who purchases tobacco products in
this state for the person’s use or consumption or for any purpose other
than for reselling the tobacco products to another person.
(4) “Contraband tobacco products” means tobacco products or
packages containing tobacco products:
(a) That do not comply with the requirements of ORS 323.500 to
323.645;
(b) That do not comply with the requirements of the tobacco
products tax laws of the federal government or of other states; or
(c) That bear trademarks that are counterfeit under ORS 647.135 or
other state or federal trademark laws.
(5) “Department” means the Department of Revenue.
(6) “Distribute” means:
(a) Bringing, or causing to be brought, into this state from
without this state tobacco products for sale, storage, use or consumption;
(b) Making, manufacturing or fabricating tobacco products in this
state for sale, storage, use or consumption in this state;
(c) Shipping or transporting tobacco products to retail dealers in
this state, to be sold, stored, used or consumed by those retail dealers;
(d) Storing untaxed tobacco products in this state that are
intended to be for sale, use or consumption in this state;
(e) Selling untaxed tobacco products in this state; or
(f) As a consumer, being in possession of untaxed tobacco products
in this state.
(7) “Distributor” means:
(a) Any person engaged in the business of selling tobacco products
in this state who brings, or causes to be brought, into this state from
without the state any tobacco products for sale;
(b) Any person who makes, manufactures or fabricates tobacco
products in this state for sale in this state;
(c) Any person engaged in the business of selling tobacco products
without this state who ships or transports tobacco products to retail
dealers in this state, to be sold by those retail dealers;
(d) Any person, including a retail dealer, who sells untaxed
tobacco products in this state; or
(e) A consumer in possession of untaxed tobacco products in this
state.
(8) “Manufacturer” means a person who manufactures tobacco products
for sale.
(9) “Place of business” means any place where tobacco products are
sold or where tobacco products are manufactured, stored or kept for the
purpose of sale or consumption, including any vessel, vehicle, airplane,
train or vending machine.
(10) “Retail dealer” means any person who is engaged in the
business of selling or otherwise dispensing tobacco products to
consumers. The term also includes the operators of or recipients of
revenue from all places such as smoke shops, cigar stores and vending
machines, where tobacco products are made or stored for ultimate sale to
consumers.
(11) “Sale” means any transfer, exchange or barter, in any manner
or by any means, for a consideration, and includes and means all sales
made by any person. It includes a gift by a person engaged in the
business of selling tobacco products, for advertising, as a means of
evading the provisions of ORS 323.500 to 323.645, or for any other
purpose.
(12) “Taxpayer” includes a distributor or other person required to
pay a tax imposed under ORS 323.500 to 323.645.
(13) “Tobacco products” means cigars, cheroots, stogies, periques,
granulated, plug cut, crimp cut, ready rubbed and other smoking tobacco,
snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other
chewing tobaccos, shorts, refuse scraps, clippings, cuttings and
sweepings of tobacco and 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, but shall not include
cigarettes as defined in ORS 323.010.
(14) “Untaxed tobacco products” means tobacco products for which
the tax required under ORS 323.500 to 323.645 has not been paid.
(15) “Wholesale sales price” means the price paid for untaxed
tobacco products to or on behalf of a seller by a purchaser of the
untaxed tobacco products. [1985 c.816 §15; 2001 c.982 §2; 2003 c.804 §31] (1) A tax is hereby
imposed upon the distribution of all tobacco products in this state. The
tax imposed by this section is intended to be a direct tax on the
consumer, for which payment upon distribution is required to achieve
convenience and facility in the collection and administration of the tax.
The tax shall be imposed on a distributor at the time the distributor
distributes tobacco products.
(2) The tax imposed under this section shall be imposed at the rate
of:
(a) Sixty-five percent of the wholesale sales price of cigars, but
not to exceed 50 cents per cigar; or
(b) Sixty-five percent of the wholesale sales price of all tobacco
products that are not cigars.
(3) If the tax imposed under this section does not equal an amount
calculable to a whole cent, the tax shall be equal to the next higher
whole cent. However, the amount remitted to the Department of Revenue by
the taxpayer for each quarter shall be equal only to 98.5 percent of the
total taxes due and payable by the taxpayer for the quarter.
(4) No tobacco product shall be subject to the tax if the base
product or other intermediate form thereof has previously been taxed
under this section. [1985 c.816 §16; 1997 c.2 §9; 1999 c.21 §60; 2001
c.982 §3; 2003 c.46 §48; 2003 c.804 §32] (1) Except as
otherwise provided in ORS 323.500 to 323.645, the tax imposed by ORS
323.505 and 323.565 shall be paid by each distributor and each common
carrier or authorized person specified in ORS 323.565 to the Department
of Revenue on or before the last day of January, April, July and October
of each year for the preceding calendar quarter.
(2) With each quarterly payment, the taxpayer shall submit a return
to the department, in such form and containing such information as the
department shall prescribe.
(3) The tax, penalties and interest imposed by ORS 323.500 to
323.645 shall be a personal debt, from the time liability is incurred,
owed by the taxpayer to the State of Oregon until paid.
(4) The returns required of distributors and common carriers or
authorized persons specified in ORS 323.565 under this section shall be
filed by the distributors, common carriers or authorized persons
regardless of whether any tax is owed by them.
(5)(a) The department for good cause may extend the time for making
any return under ORS 323.500 to 323.645. The extension may be granted at
any time if a written request is filed with the department within or
prior to the period for which the extension may be granted. The
department may not grant an extension of more than one month.
(b) When the time for filing a return is extended at the request of
a taxpayer, interest shall be added at the rate established under ORS
305.220 for each month, or fraction of a month, from the time the return
was originally required to be filed to the time of payment. [1985 c.816
§17; 2003 c.46 §49; 2003 c.804 §33]The tax imposed by ORS 323.505 does not apply with respect to any
tobacco products which under the Constitution and laws of the United
States may not be made the subject of taxation by the state. [1985 c.816
§18] (1) Any person
engaging or seeking to engage in the sale of tobacco products as a
distributor shall file an application for a distributor’s license with
the Department of Revenue. The application shall be on a form prescribed
by the department. A distributor shall apply for and obtain a license for
each place of business at which the distributor engages in the business
of distributing tobacco products. A fee may not be charged for the
license. For the purposes of this section, a vending machine in and of
itself is not a place of business.
(2) A person may not engage in the business of distributing tobacco
products in this state without a license. [1985 c.816 §19; 2003 c.804 §34] (1) The Department of Revenue may require
any person subject to ORS 323.500 to 323.645 to place with the department
an amount of security that the department determines is necessary to
ensure compliance with ORS 323.500 to 323.645.
(2) The amount of the security shall be fixed by the department
but, except as provided in subsection (3) of this section, may not be
greater than twice the estimated tax liability of a person for the
reporting period under ORS 323.500 to 323.645, determined in a manner the
department considers proper.
(3) In the case of a person who, pursuant to ORS 323.535, has
appealed the decision of the department to suspend or revoke a license,
the amount of the security may not be greater than twice the tax
liability of the person for the reporting period under ORS 323.500 to
323.645, determined in a manner the department considers proper, or
$10,000, whichever is greater.
(4) The limitations provided in this section apply regardless of
the type of security placed with the department. The required amount of
the security may be increased or decreased by the department subject to
the limitations provided in this section. [1985 c.816 §20; 2003 c.804
§35; 2005 c.94 §111] (1)
Upon receipt of a completed application and any security required by the
Department of Revenue under ORS 323.500 to 323.645, the department shall
issue a distributor’s license to an applicant. A separate license shall
be issued for each place of business of the distributor within the state.
Each license issued by the department shall include an identification
number for the license. A license is valid only for engaging in business
as a distributor at the place designated thereon, and it shall at all
times be conspicuously displayed at the place for which issued. The
license is not transferable and is valid until canceled, suspended or
revoked.
(2) The department may not issue a license to an applicant if the
department determines or has reason to believe that the applicant will
not comply with the provisions of ORS chapter 323 or any other state or
federal tobacco products tax law.
(3) Notwithstanding ORS 305.280, a decision by the department not
to issue a license to an applicant may be appealed by the applicant to
the magistrate division of the tax court within 30 days of the date of
the decision of the department in the manner prescribed in ORS 305.404 to
305.560.
(4) For purposes of this section, an application to renew a
distributor’s license shall be considered the same as an application for
an initial distributor’s license. [1985 c.816 §21; 2003 c.804 §36]
(1) The Department of Revenue may cancel, suspend or revoke a license
issued to a distributor if the distributor fails to:
(a) Pay any tax or penalty due under ORS chapter 323;
(b) Otherwise comply with any provision of ORS chapter 323 or any
rule adopted thereunder; or
(c) Comply with any other state or federal tobacco products tax law.
(2) Notwithstanding ORS 305.280, a decision by the department to
cancel, suspend or revoke a license may be appealed by the distributor to
the magistrate division of the tax court within 30 days of the date of
the decision of the department under subsection (1) of this section, in
the manner provided in ORS 305.404 to 305.560. [1985 c.816 §22; 1995
c.650 §45; 2003 c.804 §37](1) A sales invoice for the wholesale sale of tobacco products
in this state, including a sales invoice required under ORS 323.540,
shall contain the following:
(a) The name and address of the seller, the name and address of the
purchaser, the date of the sale of tobacco products, the quantity and
product description of tobacco products, the price paid for tobacco
products and any discount applied in determining the price paid for
tobacco products;
(b) The applicable license identification number for the
distributor;
(c) A certified statement by the distributor of the tobacco
products that all taxes due under ORS 323.500 to 323.645 have been or
will be paid; and
(d) Any other information the Department of Revenue may prescribe
by rule.
(2) A distributor must provide a copy of the sales invoice to the
purchaser of the tobacco product and the purchaser shall retain a copy of
the invoice for five years following the date of purchase.
(3) Each purchaser that then sells the tobacco products to a
subsequent purchaser shall provide the subsequent purchaser with a sales
invoice that meets the requirements of this section.
(4)(a) A purchaser in possession of tobacco products who is unable
to present a sales invoice that meets the requirements of this section is
presumed to be in possession of tobacco products for which the tax
imposed under ORS 323.500 to 323.645 has not been paid.
(b) In the case of a purchaser in possession of untaxed tobacco
products, the tax is due immediately, along with a penalty equal to 100
percent of the tax due. Amounts due under this paragraph may be collected
as provided in ORS 323.605.
(c) If the purchaser in possession of untaxed tobacco products is a
retail dealer, the Department of Revenue may impose a civil penalty for
the possession of untaxed tobacco products. A civil penalty imposed under
this paragraph may not exceed $1,000 per violation. A penalty imposed
under this paragraph may be appealed to the magistrate division of the
tax court in the time and manner prescribed in ORS 305.404 to 305.560.
(5) This section does not apply to a consumer in possession of less
than 100 cigars or tobacco products with a wholesale sales price of less
than $50. [2003 c.804 §39] (1) Any
distributor, and any person dealing in, transporting or storing tobacco
products, shall keep at each registered place of business complete and
accurate records for that place of business, including itemized invoices,
of tobacco products held, purchased, manufactured, brought in or caused
to be brought in from without the state or shipped or transported to
retail dealers in this state, and of all sales of tobacco products made,
except sales to consumers.
(2) The records required by subsection (1) of this section shall
show the names and addresses of purchasers and other pertinent papers and
documents relating to the purchase, sale or disposition of tobacco
products.
(3) When a licensed distributor sells tobacco products exclusively
to consumers at the address given in the certificate and sells only
tobacco products for which taxes imposed under ORS 323.500 to 323.645
have been paid prior to sale, an invoice of any individual sale of less
than 100 cigars or of tobacco products with a wholesale sales price of
less than $50 is not required. Itemized invoices of all tobacco products
transferred to other places of business owned or controlled by that
licensed distributor shall be made and retained.
(4)(a) All books, records and other papers and documents required
by this section to be kept shall be preserved for a period of at least
five years after the initial date of the books, records and other papers
or documents, or the date of entries appearing therein, unless the
Department of Revenue, in writing, authorizes their destruction or
disposal at an earlier date.
(b) The department or its authorized representative, upon oral or
written demand, may make such examinations of the books, papers, records
and equipment required to be kept under this section as it may deem
necessary in carrying out the provisions of ORS 323.500 to 323.645.
(c) If the department, or any of its agents or employees, are
denied free access or are hindered or interfered with in making such
examination, the license of the distributor at such premises shall be
subject to cancellation, suspension or revocation by the department.
[1985 c.816 §23; 2003 c.804 §38]
Records of all deliveries or shipments of tobacco products from any
public warehouse of first destination in this state shall be kept by the
warehouse and be available to the Department of Revenue for inspection.
The records shall show the name and address of the consignee, the date,
the quantity of tobacco products delivered and any other information the
department may require. These records shall be preserved for five years
from the date of delivery of the tobacco products. [1985 c.816 §26; 2003
c.804 §41]When tobacco products, upon which the tax
imposed under ORS 323.500 to 323.645 has been reported and paid, are
shipped or transported by the distributor to retail dealers outside this
state, to be sold by those retail dealers, or are returned to the
manufacturer by the distributor or destroyed by the distributor, credit
for the paid tax may be made to the distributor. [1985 c.816 §27; 2003
c.804 §42]The
taxes imposed by ORS 323.500 to 323.645 do not apply to the sale of
tobacco products by a distributor to a common carrier engaged in
interstate or foreign passenger service or to a person authorized to sell
tobacco products on the facilities of a common carrier. Whenever tobacco
products are sold by distributors to common carriers engaged in
interstate or foreign passenger service for use or sale on facilities of
the carriers, or to persons authorized to sell tobacco products on those
facilities, the tax imposed by this section may not be levied with
respect to sales of the tobacco products by the distributors, but a tax
is hereby levied upon the carriers or upon the persons authorized to sell
tobacco products on the facilities of the carriers, as the case may be,
for the privilege of making these sales in Oregon at the same rate that
is imposed upon the distribution of tobacco products in this state. The
common carriers and authorized persons shall pay the tax imposed by this
section and file returns with the Department of Revenue as provided in
ORS 323.510. [1985 c.816 §27b; 2003 c.804 §43] (1)
Any transporter desiring to possess or acquire untaxed tobacco products
for transportation or transport upon the highways, roads or streets of
this state shall obtain a permit from the Department of Revenue
authorizing such transporter to possess or acquire for transportation or
transport the untaxed tobacco products, and shall have the permit in the
transporting vehicle during the period of transportation of the tobacco
products. The application for the permit shall be in such form and shall
contain such information as may be prescribed by the department. The
department may issue a permit for a single load or shipment or for a
number of loads or shipments to be transported under specified conditions.
(2) Each transporter who shall transport or possess or acquire for
the purpose of transporting untaxed tobacco products upon the highways,
roads or streets of this state is required to have within the
transporting vehicle invoices or bills of lading covering the shipment of
tobacco products being transported which shall show the name and address
of the consignor or seller, the name and address of the consignee or
purchaser and the quantity and types of tobacco products transported.
[1985 c.816 §27c] The
Department of Revenue shall administer and enforce ORS 323.500 to
323.645. The department is authorized to establish those rules and
procedures for the implementation and enforcement of ORS 323.500 to
323.645 that are consistent with its provisions and considered necessary
and appropriate. [1985 c.816 §28; 2003 c.804 §44]The provisions of ORS 314.400 apply to a person who fails to file
a return required under ORS 323.500 to 323.645 or fails to pay a tax at
the time the tax becomes due, and no extension is granted under ORS
323.510, or if the time granted as an extension has expired and the
person fails to file a return or pay a tax. [1985 c.816 §30; 1999 c.62
§25; 2003 c.804 §45] Except as otherwise provided
in ORS 323.500 to 323.645 or where the context requires otherwise, the
provisions of ORS chapters 305 and 314 as to the audit and examination of
returns, periods of limitations, determination of and notices of
deficiencies, assessments, liens, delinquencies, claims for refund and
refunds, conferences, appeals to the Oregon Tax Court, stay of collection
pending appeal, confidentiality of returns and the penalties relating
thereto, and the procedures relating thereto, apply to the determinations
of taxes, penalties and interest under ORS 323.500 to 323.645. [1985
c.816 §32; 1995 c.650 §46; 1999 c.1077 §7; 2001 c.76 §4; 2003 c.804 §47] Notwithstanding ORS
323.595, information on the license of a distributor is not confidential.
The Department of Revenue may publicly disclose or publish a list of
names of distributors, along with any other information set forth on a
license. [2003 c.804 §36a]If, under ORS 323.500 to 323.645, the Department
of Revenue is not satisfied with the return of the tax or as to the
amount of tax required to be paid to this state by any person, it may
compute and determine the amount required to be paid upon the basis of
the facts contained in the return or upon the basis of any information
within its possession or that may come into its possession. One or more
deficiency determinations may be made of the amount due for one or for
more than one period. Notices of deficiency shall be given and interest
on deficiencies shall be computed as provided in ORS 305.265. Subject to
ORS 314.421 and 314.423, liens for taxes or deficiencies arise at the
time of assessment, continue until the taxes, interest and penalties are
fully satisfied and may be recorded and collected in the manner provided
for the collection of delinquent income taxes. [1985 c.816 §33; 2003
c.804 §48] If the
Department of Revenue believes that the collection of any tax imposed
under ORS 323.500 to 323.645 or any amount of the tax required to be paid
to the state or of any determination will be jeopardized by delay, it
shall make a determination of the tax or amount of tax required to be
collected, noting that fact upon the determination. The amount determined
is immediately due and payable and the department shall assess the taxes,
notify the person and proceed to collect the tax in the same manner and
using the same procedures as for the collection of income taxes under ORS
314.440. [1985 c.816 §34; 2003 c.804 §49]If the
Department of Revenue finds that an amount of gross purchases net of
discounts equal to 25 percent or more of the gross purchases net of
discounts as reported on the taxpayer’s tobacco products tax return has
been omitted from the return, the department may give notice of
deficiency as prescribed in ORS 305.265 at any time within five years
after the date the return was due or filed, whichever is later. [2001
c.76 §2](1) If any tax imposed under ORS 323.500 to
323.645, or any portion of the tax, is not paid within the time provided
by law and no provision is made to secure the payment of the tax by bond,
deposit or otherwise, pursuant to rules adopted by the Department of
Revenue, the department may issue a warrant directed to the sheriff of
any county of the state commanding the sheriff to levy upon and sell the
real and personal property of the taxpayer found within the county, for
the payment of the amount of the tax, with the added penalties, interest
and the sheriff’s cost of executing the warrant, and to return the
warrant to the department and pay to it the money collected from the
sale, within 60 days after the date of receipt of the warrant.
(2) The sheriff shall, within five days after the receipt of the
warrant, record with the clerk of the county a copy of the warrant, and
the clerk shall immediately enter in the County Clerk Lien Record the
name of the taxpayer mentioned in the warrant, the amount of the tax or
portion of the tax and penalties for which the warrant is issued and the
date the copy is recorded. The amount of the warrant so recorded shall
become a lien upon the title to and interest in real property of the
taxpayer against whom it is issued in the same manner as a judgment that
creates a judgment lien under ORS chapter 18. The sheriff immediately
shall proceed upon the warrant in all respects, with like effect and in
the same manner prescribed by law in respect to executions issued against
property upon judgment of a court of record, and shall be entitled to the
same fees for services in executing the warrant, to be added to and
collected as a part of the warrant liability.
(3) In the discretion of the department a warrant of like terms,
force and effect may be issued and directed to any agent authorized to
collect the taxes imposed by ORS 323.500 to 323.645. In the execution of
the warrant, the agent shall have all the powers conferred by law upon
sheriffs, but is entitled to no fee or compensation in excess of actual
expenses paid in the performance of such duty.
(4) If a warrant is returned not satisfied in full, the department
shall have the same remedies to enforce the claim for taxes against the
taxpayer as if the people of the state had recovered judgment against the
taxpayer for the amount of the tax. [1985 c.816 §35; 1987 c.158 §55; 2003
c.576 §205; 2003 c.804 §50](1) Any contraband tobacco products found by an authorized
representative of the Department of Revenue or any law enforcement agency
may be immediately seized and subject to forfeiture. If seized and
forfeited under this subsection, the tobacco products shall be destroyed.
(2) Notwithstanding ORS 305.280, a seizure and forfeiture made
under this section may be appealed to the magistrate division of the tax
court within 30 days of the date of the seizure in the manner prescribed
in ORS 305.404 to 305.560. [2003 c.804 §57](1) The Director of the Department of Revenue
is authorized to enter into a tobacco products tax refund agreement with
the governing body of any Indian reservation in Oregon. The agreement may
provide for a mutually agreed upon amount as a refund to the governing
body of any tobacco tax collected under ORS 323.500 to 323.645 in
connection with the sale of tobacco products to Indians on the Indian
reservation, or the use, storage or consumption of tobacco products by
Indians on the Indian reservation. This provision is in addition to other
laws allowing tax refunds.
(2) There is continuously appropriated to the director, from the
suspense account established under ORS 293.445 and 323.625, the amounts
necessary to make the refunds provided by subsection (1) of this section.
[1985 c.816 §36; 1999 c.21 §61; 2003 c.804 §51] (1) The
violation of any provision of ORS 323.500 to 323.645 or any rule adopted
thereunder shall be deemed an act committed in part at the office of the
Department of Revenue in Salem, Oregon, and venue shall lie in Marion
County, Oregon.
(2) The certificate of the department to the effect that a tax has
not been paid, that a return has not been filed or that information has
not been supplied, as required by or under the provisions of ORS 323.500
to 323.645, shall be prima facie evidence that the tax has not been paid,
that the return has not been filed or that the information has not been
supplied. [2003 c.804 §55](1) In addition to all other remedies specified in ORS 323.500
to 323.645, action may be brought by the Attorney General, at the request
of the Department of Revenue, in the name of the state, to recover the
amount of any taxes, penalties and interest due under ORS 323.500 to
323.645, if the action for recovery is commenced within three years from
the time the tax is due to be paid.
(2) The Attorney General shall have authority to investigate any
criminal violation of ORS 323.500 to 323.645. [2003 c.804 §59] The remedies of the state provided for
in ORS 323.500 to 323.645 are cumulative. No action taken by the
Department of Revenue or Attorney General constitutes an election by the
state to pursue any remedy to the exclusion of any other remedy for which
provision is made in ORS 323.500 to 323.645. [1985 c.816 §40; 2003 c.804
§52](1) Except as otherwise provided in ORS 323.500 to
323.645, any person aggrieved by an act or determination of the
Department of Revenue or its authorized agent under ORS 323.500 to
323.645 may appeal to the Oregon Tax Court in the time and manner
provided in ORS 305.404 to 305.560. These appeal rights shall be the
exclusive remedy available to determine the person’s liability for the
taxes imposed under ORS 323.500 to 323.645.
(2) An appeal to the Oregon Tax Court under ORS 323.500 to 323.645
stays proceedings to collect any unpaid tax unless the tax court believes
the collection of the tax will be jeopardized by delay or otherwise
orders collection proceedings to continue. [2003 c.804 §46] All moneys received by the
Department of Revenue under ORS 323.500 to 323.645 shall be deposited in
the State Treasury and credited to a suspense account established under
ORS 293.445. Amounts necessary to pay the expenses incurred by the
Department of Revenue and to reimburse the Oregon State Police and the
Department of Justice for the administration and enforcement of ORS
323.500 to 323.645 are continuously appropriated to the Department of
Revenue from the suspense account. After payment of administrative and
enforcement expenses and of refunds or credits arising from erroneous
overpayments, the balance of the money shall be credited to the General
Fund. Of the amount credited to the General Fund under this section 41.54
percent shall be dedicated to funding the maintenance and expansion of
the number of persons eligible for medical assistance under the Oregon
Health Plan, or to funding the maintenance of the benefits available
under the Oregon Health Plan, or both, and 4.62 percent shall be credited
to the Tobacco Use Reduction Account established under ORS 431.832. [1985
c.816 §42; 1997 c.2 §10; 1999 c.21 §62; 2003 c.804 §53]Note: The amendments to 323.625 by section 53a, chapter 804, Oregon
Laws 2003, become operative January 1, 2008. See section 67, chapter 804,
Oregon Laws 2003. The text that is operative on and after January 1,
2008, is set forth for the user’s convenience.
323.625. All moneys received by the Department of Revenue under ORS
323.500 to 323.645 shall be deposited in the State Treasury and credited
to a suspense account established under ORS 293.445. After payment of
refunds or credits arising from erroneous overpayments, the balance of
the money shall be credited to the General Fund. Of the amount credited
to the General Fund under this section 41.54 percent shall be dedicated
to funding the maintenance and expansion of the number of persons
eligible for medical assistance under the Oregon Health Plan, or to
funding the maintenance of the benefits available under the Oregon Health
Plan, or both, and 4.62 percent shall be credited to the Tobacco Use
Reduction Account established under ORS 431.832.(1)(a) A civil penalty may be imposed by the Department of
Revenue on any person who violates any provision of ORS 323.500 to
323.645.
(b) A civil penalty imposed under this subsection may not exceed
$1,000 per violation.
(c) A penalty imposed under this subsection may be appealed to the
magistrate division of the tax court in the time and manner prescribed in
ORS 305.404 to 305.560.
(2) Any person required to obtain a license as a distributor under
ORS 323.500 to 323.645 who knowingly engages in business as a distributor
without a license or after a license has been suspended or revoked is
guilty of a Class C felony.
(3) Any person required to make, render, sign or verify any report
under ORS 323.500 to 323.645 who makes any false report with the intent
to defraud is guilty of a Class C felony.
(4) Any transporter who knowingly violates the provisions of ORS
323.570 is guilty of a Class C felony.
(5) Any person who knowingly violates any provision of ORS 323.500
to 323.645, except as otherwise provided in this section, is guilty of a
Class A misdemeanor.
(6) Any person who, with intent to defraud, makes, alters, forges
or utters a false receipt or invoice recording a sale of tobacco products
in this state is guilty of a Class C felony.
(7) In addition to any other sentence the court may impose upon a
conviction under this section, the court may order the forfeiture of the
instrumentalities used in violating ORS 323.500 to 323.645 and the
proceeds resulting from a violation of ORS 323.500 to 323.645. [2003
c.804 §56] (1) A
person commits the crime of unlawful distribution of tobacco products if
the person knowingly sells or distributes, possesses or transports for
sale or distribution or imports for sale or distribution tobacco products
that do not comply with ORS 323.500 to 323.645.
(2) The offense of unlawful distribution of tobacco products is
classified as follows:
(a) If the amount of tobacco products tax avoided in committing the
offense over a 90-day period totals less than $1,000, the offense is a
Class A misdemeanor.
(b) If the amount of tobacco products tax avoided in committing the
offense over a 90-day period totals $1,000 or more, but less than $5,000,
the offense is a Class C felony classified as crime category 3 of the
sentencing guidelines grid of the Oregon Criminal Justice Commission.
(c) If the amount of tobacco products tax avoided in committing the
offense over a 90-day period totals $5,000 or more, but less than
$10,000, the offense is a Class C felony classified as crime category 5
of the sentencing guidelines grid of the Oregon Criminal Justice
Commission.
(d) If the amount of tobacco products tax avoided in committing the
offense over a 90-day period totals $10,000 or more, the offense is a
Class B felony classified as crime category 7 of the sentencing
guidelines grid of the Oregon Criminal Justice Commission.
(3) As used in this section, “tobacco products tax” means the
amount of tax due under ORS 323.500 to 323.645, if the tax were timely
paid upon first distribution of the tobacco products in this state. [2003
c.804 §58](1) The taxes imposed by ORS
323.505 are in lieu of all other state, county or municipal taxes on the
sale or use of tobacco products.
(2) Any tobacco product with respect to which a tax has once been
imposed under ORS 323.505 shall not be subject upon a subsequent
distribution to the taxes imposed by ORS 323.505. [1985 c.816 §44a]ORS 323.500 to 323.645 may be cited as the
Tobacco Products Tax Act. [1985 c.816 §46]TOBACCO DELIVERY SALES As used in ORS
323.700 to 323.730:
(1) “Consumer” means an individual who is not a licensed
distributor of tobacco or a licensed tobacco retailer.
(2) “Delivery sale”:
(a) Means a sale of tobacco to a consumer in this state in which:
(A) The purchaser submits the order for the sale by means of a
telephone or other method of voice transmission, a delivery service or
the Internet or other online service; or
(B) The tobacco is delivered by use of a delivery service.
(b) Includes any sale of tobacco described in paragraph (a) of this
subsection, regardless of whether the seller is located within Indian
country or is otherwise within or outside of this state.
(c) Does not include any sale to a licensed distributor or licensed
tobacco retailer in this state.
(3) “Delivery service” means any person that is engaged in the
commercial delivery of letters, packages or other containers.
(4) “Indian country” has the meaning given that term in 18 U.S.C.
1151.
(5) “Legal minimum purchase age” means the minimum age at which an
individual may purchase tobacco in this state.
(6) “Mail” means the use of the United States Postal Service for
delivery of letters, packages or other containers.
(7) “Person accepting a purchase order for a delivery sale” means a
person who fills a tobacco purchase order given by a consumer and
processes the order for mail, shipping or other delivery, or who
contracts with another party to provide delivery service.
(8) “Purchase order” means a written or electronic document
authorizing a seller to provide goods.
(9) “Sale of tobacco to a consumer” means any sale of tobacco to an
individual in this state, unless the individual is licensed as a
distributor or retailer of tobacco by the Department of Revenue.
(10) “Shipping container” means a container in which tobacco is
packaged in connection with a delivery sale.
(11) “Shipping documents” means bills of lading, airbills or any
other documents used to evidence the undertaking by a delivery service to
deliver letters, packages or other containers.
(12) “Tobacco” means cigarettes, as defined in ORS 323.010, or
tobacco products, as defined in ORS 323.500. [2003 c.804 §73]A person may not make a delivery sale of tobacco to a person
who is under the legal minimum purchase age. [2003 c.804 §74]A person accepting a purchase order for a delivery sale, prior to
the first mailing, shipment or other delivery of tobacco to a consumer,
shall comply with:
(1) The age verification requirements set forth in ORS 323.709;
(2) The distributor license requirements set forth in ORS 323.712;
(3) The disclosure requirements set forth in ORS 323.715;
(4) The mailing or shipping requirements set forth in ORS 323.718;
(5) The reporting requirements set forth in ORS 323.721; and
(6) All other laws of this state applicable to sales of tobacco
that occur entirely within Oregon, including but not limited to ORS
323.005 to 323.482, 323.500 to 323.645 and 323.806. [2003 c.804 §75]A person may not mail or ship tobacco in connection with
a delivery sale order unless the person, before mailing or shipping the
tobacco, does all of the following:
(1) Obtains a certification from the prospective consumer that
includes a written statement signed by the prospective consumer that:
(a) Certifies the prospective consumer’s address and that the
prospective consumer is at least the legal minimum purchase age; and
(b) Confirms that the prospective consumer understands that signing
another person’s name to the certification is illegal, that the sale of
tobacco to individuals under the legal minimum purchase age is illegal
and that the purchase of tobacco by individuals under the legal minimum
purchase age is illegal under ORS 167.401;
(2) Verifies the information contained in the certification against
a commercially available database of government-collected information
showing the age or date of birth of the individual placing the order and
obtains a photocopy or other image of a valid, government-issued
identification stating the age or date of birth of the individual placing
the order;
(3) Provides a notice to the prospective consumer, via electronic
mail or other means, that meets the requirements of ORS 323.715; and
(4) In the case of an order for tobacco placed through an Internet
website, receives payment for the delivery sale from the prospective
purchaser by a credit or debit card that has been issued in the name of
the prospective purchaser or by a personal check issued by the
prospective purchaser. [2003 c.804 §76] (1) Each person seeking to engage
in delivery sales of tobacco to purchasers in this state shall apply for
and obtain:
(a) A cigarette distributor’s license under ORS 323.105, if the
person intends to engage in cigarette delivery sales; and
(b) A tobacco products distributor’s license under ORS 323.520, if
the person intends to engage in tobacco products delivery sales.
(2) A person may not engage in delivery sales in this state without
first obtaining each applicable distributor’s license under subsection
(1) of this section. [2003 c.804 §76a] The notice required
under ORS 323.709 (3) shall include:
(1) A prominent and clearly legible statement that tobacco sales to
persons under the legal minimum purchase age are illegal;
(2) A prominent and clearly legible statement that sales of tobacco
are restricted to those individuals who provide verifiable proof of age
in accordance with ORS 323.709; and
(3) A prominent and clearly legible statement that sales of
cigarettes are subject to tax under ORS 323.005 to 323.482 and that sales
of other tobacco products are subject to tax under ORS 323.500 to
323.645, and an explanation of how the applicable tax has been paid or is
to be paid. [2003 c.804 §77]
(1) Each person accepting a purchase order for a delivery sale, in
connection with the delivery sale order, shall:
(a) Include as part of the shipping documents a clear and
conspicuous statement providing as follows: “TOBACCO: OREGON LAW
PROHIBITS SHIPPING TO INDIVIDUALS UNDER 18 AND REQUIRES THE PAYMENT OF
ALL APPLICABLE TAXES”; and
(b) Use a method of mail, shipping or other delivery of tobacco
described in this paragraph as follows:
(A) Unless subparagraph (B) of this paragraph applies, use a method
of shipping or other delivery that obligates the delivery service to
require:
(i) The consumer placing the delivery sale order, or another
individual of at least the legal minimum purchase age who resides at the
residence of the consumer, to sign to accept delivery of the shipping
container; and
(ii) Proof, in the form of a valid, government-issued
identification bearing a photograph of the individual who signs to accept
delivery of the shipping container, demonstrating that the individual who
signs to accept delivery:
(I) Is either the consumer or another individual residing at the
residence of the consumer; and
(II) Is at least the legal minimum purchase age, except that proof
of age is required only if the individual appears to be under 27 years of
age.
(B) If the person is fulfilling a purchase order for a delivery
sale by mailing tobacco, to the extent permitted by the United States
Postal Service, use a method of mailing that requires the postal service
to require:
(i) The consumer placing the delivery sale order, or another
individual of at least the legal minimum purchase age residing at the
residence of the consumer, to sign to accept delivery of the shipping
container; and
(ii) Proof, in the form of a valid, government-issued
identification bearing a photograph of the individual who signs to accept
delivery of the shipping container, demonstrating that the individual who
signs to accept delivery:
(I) Is either the consumer or another individual residing at the
residence of the consumer; and
(II) Is at least the legal minimum purchase age, except that proof
of age is required only if the individual appears to be under 27 years of
age.
(2) If the person accepting a purchase order for a delivery sale
delivers the tobacco without using a delivery service or the United
States Postal Service, the person shall comply with all requirements of
ORS 323.700 to 323.730 that apply to a delivery service and shall be in
violation of this section if the person fails to comply with all
requirements applicable to a delivery service. [2003 c.804 §78] (1) Prior to
delivering, mailing or shipping tobacco in connection with a delivery
sale, a person who accepts purchase orders for delivery sales shall file
a statement with the Department of Revenue. The statement shall set forth
the name, trade name and address of the principal place of business of
the seller and any other place of business of the seller.
(2) Not later than the 10th day of each calendar month, each person
that has made a delivery sale or delivered, mailed or shipped tobacco or
contracted with another party for delivery service in connection with a
delivery sale made during the previous calendar month shall file a
memorandum of sale or a copy of the delivery sales invoice with the
Department of Revenue. The memorandum or delivery sales invoice shall
provide, for each delivery sale made during the previous calendar month:
(a) The name and address of the consumer to whom the delivery sale
was made;
(b) The brand or brands of the tobacco that were sold in the
delivery sale; and
(c) The quantity of tobacco that was sold in the delivery sale.
(3) A person that satisfies the requirements of 15 U.S.C. 376 is
deemed to meet the requirements of this section. [2003 c.804 §79](1) A person that accepts a purchase order for a delivery
sale of cigarettes may not make a delivery sale of cigarettes to a person
in this state if the packages in which the cigarettes are contained do
not bear the proper tax stamps required to be affixed to the packages of
cigarettes under ORS 323.005 to 323.482.
(2) A person that accepts a purchase order for a delivery sale of
tobacco products may not make a delivery sale of tobacco products in this
state if the sales invoice for the delivery sale does not comply with ORS
323.538. [2003 c.804 §80]
(a) The first time a person violates a provision of ORS 323.700 to
323.730, the person shall be subject to a penalty of $1,000 or five times
the retail value of the tobacco involved in the violation, whichever is
greater; and
(b) In the case of a second or subsequent violation of ORS 323.700
to 323.730, the person shall be subject to a penalty of $5,000 or five
times the retail value of the tobacco involved in the violation,
whichever is greater.
(2) A person who knowingly violates a provision of ORS 323.700 to
323.730 or who knowingly submits a false certification under ORS 323.709
under the name of another person:
(a) Shall be subject to a penalty of $10,000 or five times the
retail value of the tobacco involved, whichever is greater; or
(b) May be imprisoned for a period of not more than five years.
(3) A person who accepts a purchase order for a delivery sale and,
in connection with the sale, fails to pay a tax due under ORS 323.005 to
323.482 or 323.500 to 323.645 shall pay a penalty of five times the
amount of tax due and not timely paid under ORS 323.005 to 323.482 or
323.500 to 323.645.
(4) The penalties prescribed under this section are in addition to
and not in lieu of any other penalty applicable under the laws of this
state.
(5) Any tobacco sold or attempted to be sold in a delivery sale
that does not meet the requirements of ORS 323.700 to 323.730 may be
immediately seized and subject to forfeiture. Tobacco seized and
forfeited under this subsection shall be destroyed.
(6) Any fixtures, equipment, materials or other personal property
on the premises of a person who violates ORS 323.700 to 323.730 may be
immediately seized and subject to forfeiture. Property seized and
forfeited under this subsection may be sold or destroyed. [2003 c.804 §81] The Attorney General or any
person that holds a permit, issued under section 5713 of the Internal
Revenue Code, to engage in business as a manufacturer or importer of
tobacco products or as an export warehouse proprietor, may bring an
action to enforce the provisions of ORS 323.700 to 323.730 or to prevent
or restrain violations of ORS 323.700 to 323.730. [2003 c.804 §82]MASTER SETTLEMENT AGREEMENT As used in ORS
323.800 to 323.806:
(1) “Adjusted for inflation” means increased in accordance with the
formula for inflation adjustment set forth in Exhibit C to the Master
Settlement Agreement.
(2)(a) “Affiliate” means a person who directly or indirectly owns
or controls, is owned or controlled by, or is under common ownership or
control with, another person.
(b) For purposes of defining “affiliate”:
(A) The terms “owns,” “is owned” and “ownership” mean ownership of
an equity interest, or the equivalent thereof, of 10 percent or more; and
(B) The term “person” means an individual, partnership, committee,
association, corporation or any other organization or group of persons.
(3) “Allocable share” means Allocable Share as that term is defined
in the Master Settlement Agreement.
(4)(a) “Cigarette” means any product that contains nicotine, is
intended to be burned or heated under ordinary conditions of use, and
consists of or contains:
(A) Any roll of tobacco wrapped in paper or in any substance not
containing tobacco;
(B) Tobacco, in any form, that is functional in the product and
that because of its appearance, the type of tobacco used in the filler,
or its packaging and labeling, is likely to be offered to, or purchased
by, consumers as a cigarette; or
(C) Any roll of tobacco wrapped in any substance containing tobacco
that, because of its appearance, the type of tobacco used in the filler,
or its packaging and labeling, is likely to be offered to, or purchased
by, consumers as a cigarette described in subparagraph (A) of this
paragraph.
(b) The term “cigarette” includes “roll-your-own tobacco” (i.e.,
tobacco that, because of its appearance, type, packaging or labeling, is
suitable for use and likely to be offered to, or purchased by, consumers
as tobacco for making cigarettes). For purposes of this paragraph, 0.09
ounces of roll-your-own tobacco shall constitute one individual cigarette.
(5) “Master Settlement Agreement” means the settlement agreement
(and related documents) entered into on November 23, 1998, by the State
of Oregon and leading United States tobacco product manufacturers.
(6) “Qualified escrow fund” means an escrow arrangement with a
federally or state chartered financial institution having no affiliation
with any tobacco product manufacturer and having assets of at least $1
billion where such arrangement requires that such financial institution
hold the escrowed funds’ principal for the benefit of releasing parties
and prohibits the tobacco product manufacturer who is placing the funds
into escrow from using, accessing or directing the use of the escrowed
funds’ principal except as consistent with ORS 323.806 (2)(b).
(7) “Released claims” means Released Claims as that term is defined
in the Master Settlement Agreement.
(8) “Releasing parties” means Releasing Parties as that term is
defined in the Master Settlement Agreement.
(9)(a) “Tobacco product manufacturer” means an entity that, after
October 23, 1999, directly (and not exclusively through any affiliate):
(A) Manufactures cigarettes anywhere that such manufacturer intends
to be sold in the United States, including cigarettes intended to be sold
in the United States through an importer (except where such importer is
an Original Participating Manufacturer (as that term is defined in the
Master Settlement Agreement) that will be responsible for the payments
under the Master Settlement Agreement with respect to such cigarettes as
a result of the provisions of subsection II(mm) of the Master Settlement
Agreement and that pays the taxes specified in subsection II(z) of the
Master Settlement Agreement, and provided that the manufacturer of such
cigarettes does not market or advertise such cigarettes in the United
States);
(B) Is the first purchaser anywhere for resale in the United States
of cigarettes manufactured anywhere that the manufacturer does not intend
to be sold in the United States; or
(C) Becomes a successor of an entity described in subparagraph (A)
or (B) of this paragraph.
(b) The term “tobacco product manufacturer” does not include an
affiliate of a tobacco product manufacturer unless such affiliate is
itself a tobacco product manufacturer under paragraph (a)(A), (B) or (C)
of this subsection.
(10) “Units sold” means the number of individual cigarettes sold in
the State of Oregon by the applicable tobacco product manufacturer
(whether directly or through a distributor, retailer or similar
intermediary or intermediaries) during the year in question, as measured
by excise taxes collected by the State of Oregon on packs (or
roll-your-own tobacco containers) bearing the excise tax stamp of this
state. The Department of Revenue shall promulgate such rules as are
necessary to ascertain the amount of state excise tax paid on the
cigarettes of such tobacco product manufacturer for each year. [Formerly
293.533; 2005 c.22 §228]Note: 323.800 to 323.806 were enacted into law by the Legislative
Assembly but were not added to or made a part of ORS chapter 323 or any
series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation. (1) Cigarette smoking presents
serious public health concerns to the State of Oregon and to the citizens
of the State of Oregon. The Surgeon General has determined that smoking
causes lung cancer, heart disease and other serious diseases, and that
there are hundreds of thousands of tobacco-related deaths in the United
States each year. These diseases most often do not appear until many
years after the person in question begins smoking.
(2) Cigarette smoking also presents serious financial concerns for
this state. Under certain health care programs, the State of Oregon may
have a legal obligation to provide medical assistance to eligible persons
for health conditions associated with cigarette smoking, and those
persons may have a legal entitlement to receive such medical assistance.
(3) Under those health care programs, the State of Oregon pays
millions of dollars each year to provide medical assistance for persons
for health conditions associated with cigarette smoking.
(4) It is the policy of the State of Oregon that financial burdens
imposed on this state by cigarette smoking be borne by tobacco product
manufacturers rather than by this state to the extent that such
manufacturers either determine to enter into a settlement with the State
of Oregon or are found culpable by the courts.
(5) On November 23, 1998, leading United States tobacco product
manufacturers entered into a settlement agreement, entitled the “Master
Settlement Agreement,” with the State of Oregon. The Master Settlement
Agreement obligates those manufacturers, in return for a release of past,
present and certain future claims against them as described in the Master
Settlement Agreement:
(a) To pay substantial sums to the State of Oregon (tied in part to
their volume of sales);
(b) To fund a national foundation devoted to the interests of
public health; and
(c) To make substantial changes in their advertising and marketing
practices and corporate culture, with the intention of reducing underage
smoking.
(6) It would be contrary to the policy of the State of Oregon if
those tobacco product manufacturers who determine not to enter into such
a settlement could use a resulting cost advantage to derive large,
short-term profits in the years before liability may arise without
ensuring that this state will have an eventual source of recovery from
them if they are proven to have acted culpably. It is thus in the
interest of the State of Oregon to require that such manufacturers
establish a reserve fund to guarantee a source of compensation and to
prevent such manufacturers from deriving large, short-term profits and
then becoming judgment-proof before liability may arise. [Formerly
293.530]Note: See note under 323.800. Any tobacco product
manufacturer selling cigarettes to consumers within the State of Oregon
(whether directly or through a distributor, retailer or similar
intermediary or intermediaries) after October 23, 1999, shall do one of
the following:
(1) Become a Participating Manufacturer (as that term is defined in
section II(jj) of the Master Settlement Agreement) and generally perform
its financial obligations under the Master Settlement Agreement; or
(2)(a) Place into a qualified escrow fund by April 15 of the year
following the year in question the following amounts (as such amounts are
adjusted for inflation):
(A) For 1999, $0.0094241 per unit sold after October 23, 1999.
(B) For 2000, $0.0104712 per unit sold.
(C) For each of the years 2001 and 2002, $0.0136125 per unit sold.
(D) For each of the years 2003 through 2006, $0.0167539 per unit
sold.
(E) For 2007 and each year thereafter, $0.0188482 per unit sold.
(b) A tobacco product manufacturer that places funds into escrow
pursuant to paragraph (a) of this subsection shall receive the interest
or other appreciation on such funds as earned. Such funds themselves
shall be released from escrow only under the following circumstances:
(A) To pay a judgment or settlement on any released claim brought
against such tobacco product manufacturer by the State of Oregon or any
releasing party located or residing in this state. Funds shall be
released from escrow under this subparagraph in the order in which they
were placed into escrow and only to the extent and at the time necessary
to make payments required under such judgment or settlement;
(B) To the extent that a tobacco product manufacturer establishes
that the amount it was required to place into escrow on account of units
sold in Oregon in a particular year was greater than the Master
Settlement Agreement payments, as determined pursuant to section IX(i) of
that agreement after final determination of all adjustments, that the
manufacturer would have been required to make on account of such units
sold had it been a Participating Manufacturer (as that term is defined in
the Master Settlement Agreement), the excess shall be released from
escrow and revert back to such tobacco product manufacturer; or
(C) To the extent not released from escrow under subparagraph (A)
or (B) of this paragraph, funds shall be released from escrow and revert
back to such tobacco product manufacturer 25 years after the date on
which they were placed into escrow.
(c) Each tobacco product manufacturer that elects to place funds
into escrow pursuant to this subsection shall annually certify to the
Attorney General that it is in compliance with this subsection. The
Attorney General may bring a civil action on behalf of the State of
Oregon against any tobacco product manufacturer that fails to place into
escrow the funds required under this subsection. Any tobacco product
manufacturer that fails in any year to place into escrow the funds
required under this subsection shall:
(A) Be required within 15 days to place such funds into escrow as
shall bring such manufacturer into compliance with this subsection. The
court, upon a finding of a violation of this subsection, may impose a
civil penalty to be paid to the General Fund of this state in an amount
not to exceed five percent of the amount improperly withheld from escrow
per day of the violation and in a total amount not to exceed 100 percent
of the original amount improperly withheld from escrow;
(B) In the case of a knowing violation, be required within 15 days
to place such funds into escrow as shall bring such manufacturer into
compliance with this subsection. The court, upon a finding of a knowing
violation of this subsection, may impose a civil penalty to be paid to
the General Fund of this state in an amount not to exceed 15 percent of
the amount improperly withheld from escrow per day of the violation and
in a total amount not to exceed 300 percent of the original amount
improperly withheld from escrow; and
(C) In the case of a second knowing violation, be prohibited from
selling cigarettes to consumers within the State of Oregon (whether
directly or through a distributor, retailer or similar intermediary or
intermediaries) for a period not to exceed two years. Each failure to
make an annual deposit required under this section shall constitute a
separate violation. [Formerly 293.535]Note: The amendments to 323.806 [formerly 293.535] by section 22,
chapter 801, Oregon Laws 2003, become operative only if there is a final
judgment that invalidates the amendments to 323.806 by section 21,
chapter 801, Oregon Laws 2003. If the court enters a final judgment that
invalidates the amendments to 323.806 by section 21, chapter 801, Oregon
Laws 2003, the amendments to 323.806 by section 22, chapter 801, Oregon
Laws 2003, become operative 31 days after entry of the final judgment.
See section 25, chapter 801, Oregon Laws 2003. The text that, if the
court enters a final judgment that invalidates the amendments to 323.806
by section 21, chapter 801, Oregon Laws 2003, is operative 31 days after
entry of the final judgment is set forth for the user’s convenience.
323.806. Any tobacco product manufacturer selling cigarettes to
consumers within the State of Oregon (whether directly or through a
distributor, retailer or similar intermediary or intermediaries) after
October 23, 1999, shall do one of the following:
(1) Become a Participating Manufacturer (as that term is defined in
section II(jj) of the Master Settlement Agreement) and generally perform
its financial obligations under the Master Settlement Agreement; or
(2)(a) Place into a qualified escrow fund by April 15 of the year
following the year in question the following amounts (as such amounts are
adjusted for inflation):
(A) For 1999, $0.0094241 per unit sold after October 23, 1999.
(B) For 2000, $0.0104712 per unit sold.
(C) For each of the years 2001 and 2002, $0.0136125 per unit sold.
(D) For each of the years 2003 through 2006, $0.0167539 per unit
sold.
(E) For 2007 and each year thereafter, $0.0188482 per unit sold.
(b) A tobacco product manufacturer that places funds into escrow
pursuant to paragraph (a) of this subsection shall receive the interest
or other appreciation on such funds as earned. Such funds themselves
shall be released from escrow only under the following circumstances:
(A) To pay a judgment or settlement on any released claim brought
against such tobacco product manufacturer by the State of Oregon or any
releasing party located or residing in this state. Funds shall be
released from escrow under this subparagraph in the order in which they
were placed into escrow and only to the extent and at the time necessary
to make payments required under such judgment or settlement;
(B) To the extent that a tobacco product manufacturer establishes
that the amount it was required to place into escrow in a particular year
was greater than this state’s allocable share of the total payments that
such manufacturer would have been required to make in that year under the
Master Settlement Agreement (as determined pursuant to section IX(i)(2)
of the Master Settlement Agreement, and before any of the adjustments or
offsets described in section IX(i)(3) of that agreement other than the
inflation adjustment) had it been a Participating Manufacturer (as that
term is defined in the Master Settlement Agreement), the excess shall be
released from escrow and revert back to such tobacco product
manufacturer; or
(C) To the extent not released from escrow under subparagraph (A)
or (B) of this paragraph, funds shall be released from escrow and revert
back to such tobacco product manufacturer 25 years after the date on
which they were placed into escrow.
(c) Each tobacco product manufacturer that elects to place funds
into escrow pursuant to this subsection shall annually certify to the
Attorney General that it is in compliance with this subsection. The
Attorney General may bring a civil action on behalf of the State of
Oregon against any tobacco product manufacturer that fails to place into
escrow the funds required under this subsection. Any tobacco product
manufacturer that fails in any year to place into escrow the funds
required under this subsection shall:
(A) Be required within 15 days to place such funds into escrow as
shall bring such manufacturer into compliance with this subsection. The
court, upon a finding of a violation of this subsection, may impose a
civil penalty to be paid to the General Fund of this state in an amount
not to exceed five percent of the amount improperly withheld from escrow
per day of the violation and in a total amount not to exceed 100 percent
of the original amount improperly withheld from escrow;
(B) In the case of a knowing violation, be required within 15 days
to place such funds into escrow as shall bring such manufacturer into
compliance with this subsection. The court, upon a finding of a knowing
violation of this subsection, may impose a civil penalty to be paid to
the General Fund of this state in an amount not to exceed 15 percent of
the amount improperly withheld from escrow per day of the violation and
in a total amount not to exceed 300 percent of the original amount
improperly withheld from escrow; and
(C) In the case of a second knowing violation, be prohibited from
selling cigarettes to consumers within the State of Oregon (whether
directly or through a distributor, retailer or similar intermediary or
intermediaries) for a period not to exceed two years. Each failure to
make an annual deposit required under this section shall constitute a
separate violation.Note: See note under 323.800.FEDERAL CIGARETTE LABELING AND ADVERTISING ACT ENFORCEMENT (1) The Legislative Assembly finds
that consumers and retailers purchasing cigarettes are entitled to be
assured through appropriate enforcement measures that cigarettes they
purchase were manufactured for consumption within the United States.
(2) The Legislative Assembly declares that it is the intent of ORS
323.850 to 323.862 to align state law with the Federal Cigarette Labeling
and Advertising Act (15 U.S.C. 1331 et seq.) and 26 U.S.C. 5754. [1999
c.1077 §1]Note: 323.850 to 323.865 were enacted into law by the Legislative
Assembly but were not added to or made a part of ORS chapter 323 or any
series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation. As used in ORS
323.850 to 323.862:
(1) “Cigarette” means any product that contains nicotine, is
intended to be burned or heated under ordinary conditions of use and
consists of or contains:
(a) Any roll of tobacco wrapped in paper or in any substance not
containing tobacco;
(b) Tobacco, in any form, that is functional in the product and
that, because of its appearance, the type of tobacco used in the filler
or its packaging and labeling, is likely to be offered to, or purchased
by, consumers as a cigarette; or
(c) Any roll of tobacco that is wrapped in any substance containing
tobacco and that, because of its appearance, the type of tobacco used in
the filler or its packaging and labeling, is likely to be offered to, or
purchased by, consumers as a cigarette described in paragraph (a) of this
subsection.
(2) “Cigarette” includes “roll-your-own,” which is any tobacco
that, because of its appearance, type, packaging or labeling, is suitable
for use and likely to be offered to, or purchased by, consumers as
tobacco for making cigarettes. For purposes of the definition of
“cigarette,” 0.09 ounces of “roll-your-own” tobacco shall constitute one
individual “cigarette.”
(3) “Cigarette distributor” means any person or business that sells
or distributes cigarettes to a tobacco retailer.
(4) “Package” means a package, carton or container of any kind in
which cigarettes are offered for sale, sold or otherwise distributed or
intended for distribution to consumers.
(5) “Tobacco product manufacturer” has the meaning given that term
in ORS 323.800.
(6) “Tobacco retailer” means any person or business that offers
cigarettes for sale to members of the public. [1999 c.1077 §2]Note: See note under 323.850.(1) No tax stamp may be affixed to, or made upon,
any package of cigarettes if:
(a) The package differs in any respect from all the requirements of
the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331 et
seq.) on October 23, 1999, for the placement of labels, warnings or any
other information upon a package of cigarettes that is to be sold within
the United States;
(b) The package has been imported into the United States in
violation of 26 U.S.C. 5754 or 19 U.S.C. 1681a, or implementing
regulations of the federal laws listed in this paragraph;
(c) The package is labeled “For Export Only,” “U.S. Tax Exempt,”
“For Use Outside U.S.” or similar wording indicating that the
manufacturer did not intend that the product be sold in the United
States; or
(d) The package, or package containing individually stamped
packages, has been altered by adding, masking or deleting the wording
described in paragraph (c) of this subsection.
(2) Any person who sells or holds for sale cigarette packages to
which are affixed a tax stamp in violation of this section commits the
same offense as possessing or selling cigarettes without a tax stamp.
(3) The Department of Justice shall notify the Department of
Revenue in writing when a determination has been made that a cigarette
distributor, on or after the date specified in the notice issued under
ORS 323.859, has sold or held for resale cigarette packages to which a
stamp has been affixed in violation of this section. Upon notification of
such violation, the Department of Revenue shall automatically suspend the
license of the cigarette distributor for a period of 90 days. Upon
determination by the Department of Justice of any subsequent violation of
this section by the distributor, the Department of Revenue shall revoke
the distributor’s license consistent with the provisions of ORS 323.140.
(4) On or after the date specified in the notice issued under ORS
323.859, the Oregon State Police or any other law enforcement agency may
seize or, acting in coordination with the Department of Revenue, destroy
or sell back for destruction or export only to the manufacturer or
licensed exporter “only to export” cigarette packages to which is affixed
a tax stamp in violation of this section. Notwithstanding the provisions
of ORS 323.320, the Department of Revenue shall not refund or credit to a
distributor the denominated value of tax stamps when such seizure,
destruction or sale back to the manufacturer has occurred.
(5) A violation of this section is an unlawful practice under ORS
646.605 to 646.652. [1999 c.1077 §3; 2001 c.696 §4]Note: See note under 323.850. (1) Within the
45-day period immediately following October 23, 1999, the Department of
Revenue shall issue a notice to:
(a) All licensed Oregon cigarette distributors informing the
distributors of the licensing provisions of ORS 323.856; and
(b) All tobacco retailers and cigarette distributors informing the
retailers and distributors of the penalties for holding or selling
cigarettes in violation of ORS 323.856.
(2) The notice shall specify a date, not earlier than the 60th day
or later than the 90th day after the date on which the notice is mailed,
after which a penalty may be imposed or seizures, destruction or sales
may take place under ORS 323.850 to 323.862.
(3) The notice shall be in writing and sent by first class mail.
The mailing shall be made by the Department of Revenue.
(4) Failure of tobacco retailers or cigarette distributors to
receive written notice is not a defense to any action to suspend or
revoke a license of a cigarette distributor or to an action involving the
seizure of cigarettes. [1999 c.1077 §4]Note: See note under 323.850. The Department of Revenue may
disclose information submitted to the department related to cigarettes,
tobacco product manufacturers and tobacco retailers to the Attorney
General, and such other parties as the Attorney General determines
necessary, to monitor and enforce compliance by tobacco product
manufacturers with ORS 323.800 to 323.806. [1999 c.1077 §5; 2005 c.22
§229]Note: See note under 323.850. The Department of Justice, in
accordance with ORS chapter 183, may adopt rules necessary for the
implementation and administration of ORS 323.850 to 323.862. [1999 c.1077
§6]Note: See note under 323.850.
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