[Added 5-11-2009]
As used in this article, the following terms shall have the meanings indicated:
CIGARETTE
Includes any roll of any size or shape of tobacco or other plant or substitute for tobacco.
CIGARETTE PACK
Includes any container, in which separate cigarettes are placed without such cigarettes being placed into any container within the package. Packs are those containers of cigarettes from which they are consumed by their ultimate user. Ordinarily a pack contains 20 cigarettes.
CIGARETTE TAX STAMP
A small gummed piece of paper or decal used to evidence provision for payment of the tax as required to be affixed to every package of cigarettes sold, distributed, or used within the Town.
RETAIL CIGARETTE DEALER
Every person who purchases or receives cigarettes from any source whatsoever for the purpose of sale within the Town to the ultimate consumer; or any person who owns, leases, or otherwise operates within his own place of business, one or more cigarette vending machines for the purpose of sale within the Town of cigarettes to the ultimate consumer.
[Amended 5-9-2011]
There is hereby levied an excise tax on the retail sale of cigarettes at a rate of $0.30 for each cigarette pack containing 20 cigarettes. A tax rate of $0.0125 shall be imposed on cigarettes exceeding 20 cigarettes per pack sold within the Town. The tax shall be paid and collected in the manner and at the time hereinafter prescribed; provided, that the tax payable for each cigarette or cigarette package sold or used within the Town shall be paid but once. The tax shall not apply to free distribution of sample cigarettes in packages containing five or fewer cigarettes.
A. 
The Mayor or designated agent is authorized to administer all provisions of this article, or to delegate to the Town Clerk and Town Treasurer for administration, enforcement and collection of these terms. The Mayor or designated agent is authorized to promulgate such rules and regulations governing:
(1) 
The display of cigarette stamps in vending machines;
(2) 
The placement of tax liens against property of taxpayers hereunder;
(3) 
The extending of varying discount rates;
(4) 
The establishing of different classes of taxpayers or those required to collect and remit the tax;
(5) 
The requirements concerning keeping and production of records;
(6) 
The administrative and jeopardy assessment to tax where reasonably justified;
(7) 
The required notice to authorities of sale of taxpayer's business;
(8) 
The audit requirements and authority; and
(9) 
The criteria for authority of distributors and others to possess untaxed cigarettes.
B. 
Any agency or authority so delegated by the Mayor or designated agent on behalf of the Town of Middletown pursuant to the provisions of Subsection A of this section immediately hereinabove, is authorized to:
(1) 
Issue a common revenue stamp;
(2) 
Employ legal counsel;
(3) 
Bring appropriate court action in its own name where necessary to enforce payment of the cigarette taxes or penalties; and
(4) 
Provide cigarette tax agents and the necessary enforcement supplies and equipment needed to effectively enforce the Cigarette Tax Ordinance.
[Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. II)]
A. 
The tax imposed by this article shall be evidenced by the use of a tax stamp and shall be paid by each retail cigarette dealer or other person liable for the tax under a reporting method deemed by the Town to carry out the provisions of this article. The stamps shall be affixed in such a manner that their removal will require continued application of water or steam. Each retail cigarette dealer or other person liable for the tax is hereby required, and it shall be his duty, to collect and pay the tax and report all packages of cigarettes on forms prescribed for this purpose:
(1) 
The quantity of Town stamped cigarettes sold or delivered to:
(a) 
Each registered agent appointed by the Town for which no tax was collected;
(b) 
Each manufacturer's representative; and
(c) 
Each separate person and place of business during the preceding calendar or fiscal month; and
(2) 
The quantity of Town tax stamps on hand, both affixed and unaffixed on the first and last day of the preceding calendar or fiscal month and the quantity of Town stamps or stamped cigarettes received during the preceding calendar or fiscal month; and
(3) 
The quantity of cigarettes on hand on which the Town stamp had not been affixed on the first and last day of the preceding calendar or fiscal month to which the Town stamp had not been affixed; and
(4) 
Such further information as the administrator for the Town may require for the proper administration and enforcement of this article for the determination of the exact number of cigarettes in the possession of each retail cigarette dealer or user.
B. 
Each retail cigarette dealer or other person liable for the tax shall file such reports with the Town and pay the tax due to the Town between the first and twentieth day after the close of each calendar or fiscal month and shall furnish copies of all cigarette tax reports submitted to the Virginia Department of Taxation for the previous month.
C. 
When upon examination and audit of any invoices, records, books, cancelled checks or other memoranda touching on the purchase, sale, receipt, storage or possession of tobacco products taxed herein, any dealer or other person liable for the tax is unable to furnish evidence to the Town of sufficient tax payments and stamp purchases to cover cigarettes which were sold, used, stored, received, purchased or possessed by him, the prima facie presumption shall arise that such cigarettes were received, sold, used, stored or purchased or possessed by him without the proper tax having been paid. The Town shall, from the results of such examination and audit, based upon such direct or indirect information available, assess the tax due, impose a penalty of 10% and may impose interest of 3/4% per month of the gross tax due.
D. 
When any retail cigarette dealer or other person liable for the tax, files a false or fraudulent report or fails to file a report or fails to perform any act or performs any act to evade payment of the tax, the Town shall administratively assess the tax due and impose a penalty not to exceed 50% of the tax due and interest of 3/4% per month of the gross tax due.
E. 
The retail cigarette dealer or other person liable for the tax shall be notified by certified mail of such deficiency and such tax, penalty and interest assessed shall be due and payable within 10 days after notice of such deficiency has been issued. Every retail cigarette dealer or other person liable for the tax shall examine each package of cigarettes to ensure that the Town stamp has been affixed prior to offering them for sale.
F. 
Any retail cigarette dealer or other person liable for the tax who shall receive cigarettes not bearing the Town stamp shall, within one hour of receipt of such cigarettes, commence and with all reasonable diligence continue to affix the Town stamp to each and every package of cigarettes until all unstamped packages of cigarettes have been stamped and before offering such cigarettes for sale. Any retail cigarette dealer or other person liable for the tax who has notified the Town that he is engaged in interstate or intrastate business shall be permitted to set aside such part of his stock as may be legally kept to conduct such interstate or intrastate business (that is, cigarettes held for sale outside the jurisdiction of the Town) without affixing the stamps required by this article.
G. 
Any such interstate and intrastate stock shall be kept entirely separate and apart from the Town stamped stock, in such a manner as to prevent the commingling of the interstate or intrastate stock with the Town stock. Any dealer or other person liable for the tax found to have untaxed cigarettes which have been lost whether by negligence, theft, or any other unaccountable loss, shall be liable for and shall pay the tax due thereon.
H. 
It shall also be the duty of each retail cigarette dealer or other person liable for the tax to maintain and keep for a period of three years, not including the current calendar year, records of all of cigarettes received, sold, possessed, transferred or handled by him in any manner, whatsoever, whether the same were stamped or unstamped, to make all such records available for audit, inspection and examination at all reasonable times as well as the means, facilities and opportunity for making such audit, inspection or examination upon demand of the Town.
[Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. II)]
A. 
Any retail cigarette dealer or other person liable for the tax that shall sell, use, store, possess, distribute or transport cigarettes within or into the Town shall first make application to the Town or its designee to qualify as a register agent. Such application blank, which shall be supplied upon request, shall require such information relative to the nature of the business engaged in by said applicant as the Town deems necessary for the administration and enforcement of this article. Any applicant whose place of business is outside the Town shall automatically, by filing this application, submit himself to the Town's legal jurisdiction and appoint the Mayor as his agent for any service of lawful process. Upon receipt of the properly completed required application forms, the Town shall determine whether the applicant qualifies to be a registered agent. The Town will issue to any qualified applicant a yearly registered agent permit to qualify him to purchase, sell, use, store, possess, distribute or transport within or into the Town, Town-stamped cigarettes.
B. 
Registered agents shall agree to the reporting and payment requirements placed upon them by this article and the rules and regulations as from time to time may be promulgated by the Town. When any registered agent's monthly report and payment of the tax is not received within the dates prescribed, the Town shall impose a late reporting penalty of 10% of the gross tax due or $10 whichever is greater, but in no event more than $1,000. The Town also may require such registered agent to provide proof that he has complied with all applicable laws or the Commonwealth of Virginia to legally conduct such business and to file financial statements showing all assets and liabilities. The Town may revoke or suspend any registered agent's permit due to failure to file tax records in a timely manner, or for non-payment of taxes due.
C. 
All money collected, as cigarette taxes under this article shall be deemed to be held in trust by the retail cigarette dealer collecting the same until remitted to the Town.
D. 
Registered agents must account for all Town authorized tax stamps purchased. Periodic audits may be conducted to determine any unaccounted variance between the number of stamps purchased and the number of stamps reported, and an assessment will be made for all unaccounted stamps. Any assessment of registered agents located outside the jurisdictions of the Town will be based upon the average sales of packages of cigarettes by jurisdiction during the audit period. For registered agents located within the jurisdictions of Town, any assessment will be based upon the tax rate of the jurisdiction in which they are located. In addition, there will be a penalty for non-reporting of 10% of the gross tax due.
A. 
Retail cigarette dealers who shall sell, offer for sale, store, possess, distribute, purchase, receive or transport cigarettes for the purpose of sale within the Town, shall purchase cigarettes only from registered agents giving or supplying the business trade name and business address of the location where the cigarettes will be placed for sale to the public. To be properly registered and licensed, a retail store must first have a valid Virginia State sales and use tax certificate and valid Town retail business license. Cigarettes must be purchased and stored separately for each business location. All copies of cigarette purchase invoices/receipts must be retained by the retailer for a period of three years and shall be made available to agents of the Town upon request for use in conducting audits and investigations.
B. 
Retail dealers must make their place of business available for inspection by tobacco revenue agents to insure that all cigarettes are properly tax-stamped and all cigarette taxes are properly paid.
[Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. II)]
A. 
Any cigarettes placed in any vending machines within the Town shall be presumed for sale within the Town. All cigarettes within the vending machines shall be placed as to allow visual inspection of the tax stamp through the viewing area as provided for by the vending machine manufacturer; if there are any cigarettes within the vending machine for which the tax stamp cannot be seen, then there shall be a rebuttable presumption that the machine contains untaxed cigarettes in violation of this article.
B. 
Any cigarettes, vending machines, cigarette tax stamps, or other property found in violation of this article shall be declared contraband goods and may be seized by the Town. In addition to any tax due, the retail cigarette dealer or other person liable for the tax possessing such untaxed cigarettes or tax stamps shall be subject to civil and criminal penalties herein provided.
C. 
In lieu of seizure, the Town may seal such vending machines to prevent continued illegal sale or removal of such cigarettes. The removal of such seal from a vending machine by an unauthorized person shall be a violation of this article. Nothing in this article shall prevent the seizure of any vending machine at any time after it is sealed.
D. 
All cigarette vending machines shall be plainly marked with the name, address and telephone number of the owner of the machine.
It shall be unlawful and a violation of the article for any retail cigarette dealer or other person liable for the tax:
A. 
To perform any act or fail to perform any act for the purpose of evading the payment of any tax imposed by this article or of any part thereof, or to fail to perform any of the duties imposed under him under the provisions of this article or to fail to obey any lawful order which may be issued under this article; or
B. 
To falsely make, or cause to be made, any invoices or reports, or to forge, alter or counterfeit any stamp or to procure or cause to be made, forged, altered or counterfeited any such stamp, or knowingly and willfully to alter, publish, pass or tender as true any false, altered, forged or counterfeited stamp or stamps; or
C. 
To sell, offer for sale, or distribute any cigarettes upon which the Town tax stamp has not been affixed; or
D. 
To possess, store, use, authorize or approve the possession, storage or use of any cigarette packages upon which the Town tax stamp has not been affixed; or
E. 
To transport, authorize or approve the transportation of any cigarette packages in quantities of more than 60 packages into or within the Town upon which the Town tax stamp has not been affixed, if they are:
(1) 
Not accompanied by a receipt/bill of lading or other document indicating the true name and address of the consignor or seller and the consignee or purchaser and the brands and quantity of cigarettes transported; or
(2) 
Accompanied by a receipt/bill of lading or other document which is false in whole or part; or
(3) 
Accompanied by a receipt/bill of lading or other document indicating:
(a) 
A consignee or purchaser in another state or the District of Columbia who is not authorized by the law of such other jurisdiction to receive or posses such tobacco products on which the taxes imposed by such other jurisdiction have not been paid unless the tax on the jurisdiction of destination has been paid and said cigarettes bear the tax stamps of the jurisdiction; or
(b) 
A consignee or purchaser in the Commonwealth of Virginia but outside the taxing jurisdiction who does not possess a Virginia sales and use tax certificate, and where applicable, any licenses issued by a state or local jurisdiction of destination.
F. 
To reuse or refill with cigarettes any package from which cigarettes have been removed, for which the tax imposed has been theretofore paid; or
G. 
To remove from any cigarette pack any stamp with intent to use or cause the same to be used after same has already been used or to buy, sell, or offer for sale or give away any used, removed, altered, or restored stamps to any person, or to reuse any stamp which had theretofore been used for evidence of the payment of any tax prescribed by this article or to sell, or offer to sell, any stamp provided for herein; or
H. 
To sell, offer for sale or distribute any loose or single cigarettes; or
I. 
To perform any act that violates the resolutions promulgated by the Town.
If the Town determines that the collection of any tax or any amount of tax required to be collected and paid under this article will be jeopardized by the delay, the Town shall make an assessment of the tax or amount of tax required to be collected and shall mail or issue a notice of such assessment to the taxpayer together with a demand for immediate payment of the tax or of the deficiency in tax declared to be in jeopardy including penalties and interest. In the case of a current period, for which the tax is in jeopardy, the Town may declare the taxable period of the taxpayer immediately terminated and shall cause notice of such finding and declaration to be mailed or issued to the taxpayer together with a demand for immediate payment of the tax based on the period declared terminated and such tax shall be immediately due and payable, whether or not the term otherwise allowed by this article for filing a return and paying the tax has expired.
[Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. II)]
A. 
Any person assessed by the Town with a cigarette tax, penalties and interest or any person whose cigarettes, vending machines and other property have been sealed or seized under processes of this article who has been aggrieved by such assessment, seizure, or sealing may file a request for a hearing before the Town for a correction of such assessment and the return of such property seized or sealed.
B. 
Where holders of property interest in cigarettes, vending machines or other property are known at time of seizure or sealing, notice of seizure or sealing shall be sent to them by certified mail within 24 hours. Where such holders of property interest are unknown at time of seizure or sealing, it shall be sufficient notice to such unknown interest holders to post such notice to a door or wall or the room or building which contained such seized or sealed property. Any such notice of seizure or sealing shall include procedures for an administrative hearing for return of such property seized or sealed as well as affirmative defenses set forth in this section which may be asserted.
C. 
Such hearing shall be requested within 10 days of the notice of such assessment, seizure or sealing and shall be set forth the reasons why said tax, penalties and interest, cigarettes, vending machines or other property should be returned or released. Within five days after receipt of such hearing request the administrator shall notify the petitioner by certified mail of a date and time for the informal presentation of evidence at a hearing to be held within 15 days of the date notification is mailed. Any such request for hearing shall be denied if the assessed tax, penalties and interest has not been paid as required or if the request is received more than 10 days from first notice to the petitioner of such seizure or sealing. Within five days after the hearing, the Administrator shall notify the petitioner, by registered mail, whether his request for a correction has been granted or refused.
D. 
Appropriate relief shall be given by the Administrator if he is convinced by the preponderance of the evidence that said seized cigarettes were in the possession of a person other than the petitioner without the petitioner's consent at the time said cigarettes, vending machines or other property were seized or sealed or that petitioner was authorized to possess such untaxed cigarettes. If the Administrator is satisfied that the tax was erroneously assessed, he shall refund the amount erroneously assessed together with any interest and penalties paid thereon and shall return any cigarettes, vending machines or other property seized or sealed to the petitioner. Any petitioner who is dissatisfied with the written decision of the Administrator may within 30 days of the date of such decision, appeal such decision to the appropriate court in the jurisdiction where the seizure or sealing occurred.
Any seized and confiscated cigarettes, vending machines or other property used in furtherance of any illegal evasion of the tax may be disposed of by the sale or other method deemed appropriate by the Town after any petitioner has exhausted all administrative appeal procedures. No credit from any sale of cigarettes, vending machines, or other property seized shall be allowed toward any tax and penalties assessed.
The Administrator, upon finding of good cause may grant an extension of time to file a tax report upon written application for a period not exceeding 30 days. Except as hereinafter provided, no interest or penalty shall be charged, assessed or collected by reason of the granting of such an extension.
Any persons violating any of the provisions of this article shall be guilty of a Class 1 misdemeanor. Such fine and/or imprisonment shall not relieve any such person from the payment of any tax, penalty or interest imposed by this article.
The sale of any quantity or the use, possession, storage or transportation of more than 60 packs of cigarettes upon which the tax stamp has not been affixed shall be and constitute a separate violation. Each continuing day of violation shall be deemed to constitute a separate offense.
If any part of this article should be held invalid by a court of competent jurisdiction, such decision shall not affect the remainder of the article, and every remaining part shall continue in full force and effect.