Virginia Law

A. Generally. A stamping agent may sell cigarettes in interstate commerce without affixing Virginia revenue stamps if such cigarettes are sold and shipped or delivered to persons outside this state. However, cigarettes without Virginia revenue stamps affixed may be sold in interstate commerce only if (i) such cigarettes are sold to persons engaged in business as dealers in cigarettes in other states, (ii) such cigarettes are purchased from the stamping agent exclusively for resale in other states, and (iii) such cigarettes are at the time of sale properly stamped with revenue stamps of other states.

B. Other sales of unstamped cigarettes by stamping agents. A stamping agent may also sell cigarettes without Virginia revenue stamps affixed thereto when (i) such cigarettes are sold to the United States or any of its instrumentalities for resale to or use or consumption by members of the armed services or to the Veterans Canteen Service of the Veterans Administration for resale to veterans of the United States armed services who are hospitalized or domiciled in hospitals or homes of the Veterans Administration or (ii) such cigarettes are sold and delivered to ships regularly engaged in foreign commerce or interstate coastwise shipping for consumption on the ships.

C. Records needed for cigarettes sold and shipped or delivered in interstate commerce to a person outside Virginia. A stamping agent who sells unstamped cigarettes that are delivered in interstate commerce must keep (i) adequate records that record the sale, (ii) a copy of the invoice for such purchase or other substantiating evidence, and (iii) the receipt from the common carrier, contract carrier, or post office showing shipment for delivery in another state. If delivered by the stamping agent to the purchaser at a point outside of Virginia, the stamping agent must maintain in addition to other records required by this chapter, a receipt that shows such delivery. A stamping agent who sells cigarettes stamped with revenue stamps of another state must keep records of each sale, the original purchase order, a copy of the invoice for such purchase, and a receipt from the purchaser showing that the purchase was made exclusively for resale in another state. In addition, records must be maintained that show the purchase and use of the other state's revenue stamps that the wholesale dealer used.

Exception. The stamping agent who stamps cigarettes with out-of-state revenue stamps and has a place of business located partly within a city in Virginia and partly without Virginia, or in a county which adjoins such city, shall not be required to obtain a receipt from a purchaser from the other state if the cigarette tax in the other state is higher than the tax imposed in Virginia.

D. Cigarettes sold to the United States or instrumentality of the United States for resale to or use or consumption. Stamping agents may sell unstamped cigarettes to the United States or to any U.S. instrumentalities for resale to or for the use or consumption by members of the armed services of the United States. The stamping agent may also sell unstamped cigarettes to the Veterans Canteen Service of the Veterans Administration for resale to veterans of the armed services of the United States who are hospitalized or domiciled in hospitals or homes of the Veterans Administration.

Stamping agents must keep books and records regarding such sales to the United States, U.S. instrumentalities, or Veterans Canteen Service and maintain files of the original purchase orders or copies of invoices showing such sales.

Example 1: Stamping agent A sells cigarettes to commissaries or officers' clubs operated by the U.S. Army as instrumentalities of the United States. Unstamped cigarettes may be sold to the commissaries or officers' clubs operated as instrumentalities of the United States.

Example 2: Stamping agent B sells cigarettes to federal reformatories for resale. The cigarettes must be stamped by the stamping agent prior to sale. Cigarettes may be sold to the United States or its instrumentalities without tax stamps affixed only if such cigarettes are sold for use or consumption to members of the armed forces or veterans of the armed forces hospitalized or domiciled in hospitals or homes of the Veterans Administration.

Example 3: Stamping agent C sells cigarettes to the Post Enlisted Men's Club, which is not organized or operated as an instrumentality of the United States. The cigarettes must be stamped by the stamping agent prior to sale since the Enlisted Men's Club is not considered an instrumentality of the United States, and such sale of cigarettes is not considered a sale made to the United States.

E. Cigarettes sold and delivered to ships regularly engaged in foreign commerce or interstate coastwise shipping for consumption on the ships. A stamping agent may sell unstamped cigarettes for delivery to ships regularly engaged in foreign commerce or coastwise shipping between points in Virginia and points outside Virginia. The unstamped cigarettes must be delivered by the stamping agent to the ship. The unstamped cigarettes must be for resale, use, or consumption upon such ship or in foreign commerce.

F. Conditions surrounding sale of unstamped cigarettes subjecting stamping agent to tax. If any wholesale dealer fails to comply with any of these provisions with respect to any sale of unstamped cigarettes, such stamping agent shall pay the tax imposed upon such cigarettes.