TITLE 63

REVENUE AND TAXATION

CHAPTER 25

CIGARETTE AND TOBACCO PRODUCTS TAXES

63-2510A.  Bonding. (1) At the time an application for a wholesaler’s license or permit, under section 63-2503, Idaho Code, is submitted to the state tax commission, the applicant shall file a bond, in such form as the commission may determine, conditioned upon faithful performance of all of the requirements of this chapter. The total amount of the bond shall be fixed by the commission and shall be the greater of twice the estimated average tax liability for the reporting period for which the applicant will be required to file a return, under section 63-2510, Idaho Code, or the value of stamps in the wholesaler’s inventory including the value of stamps ordered but not yet received. The total amount required to be secured by the bond may be increased or reduced by the commission at any time. Any bond given in conjunction with the provisions of this section shall be a continuing instrument, and shall cover the period during which the license or permit in connection with which the bond is given is in effect, unless the surety on the bond is released or discharged by the commission. Any surety on any bond furnished by a wholesaler shall be discharged only by the commission. Any surety on any bond furnished by a wholesaler shall be discharged and released by the commission from, any and all, liability to the state, accruing on the bond after the expiration of thirty (30) days from the date upon which the surety shall have lodged with the commission a written request to be released and discharged. The request shall not operate to relieve, release, or discharge the surety from any liability accrued, or which will accrue, before the expiration of the thirty (30) day period. The commission shall promptly, upon receipt of the notice of the request, notify the wholesaler and require him to furnish a new bond. Unless the wholesaler files a new bond with the commission in the amount provided in this section before the expiration of the thirty (30) day period, the commission shall immediately cancel the wholesaler’s license or permit.

(2)  In the event that any taxes due under the provisions of this chapter are not paid by a wholesaler, and the unpaid taxes are assessed by the commission, and after all avenues for appeal of the assessment have been exhausted, the commission may apply the unpaid tax liability against the bond required in this section.

(3)  A wholesaler may pay full value for stamps in advance in lieu of posting a bond. A wholesaler that has posted a bond may petition for release from the bond requirement after having filed timely and fully paid cigarette tax returns, as provided in section 63-2510, Idaho Code, for a period of not less than twelve (12) months. Upon such petition from the wholesaler, the commission will review the cigarette tax return filing and payment record of the wholesaler and, if determined necessary, within sixty (60) days examine the books and records of the wholesaler. The commission will, no later than ninety (90) days from the date of receipt of the petition, advise the wholesaler in writing of its determination and the reasons therefor. If the wholesaler wishes to seek a redetermination of the commission’s decision, a petition for redetermination may be filed as provided in section 63-3045, Idaho Code.

(4)  If at any time after release of a bond requirement the wholesaler becomes delinquent for any period in the filing of tax returns or the payment of the tax as required in section 63-2510, Idaho Code, the commission may make immediate demand that the return be filed or the payment be tendered and that a bond be filed as set forth in subsection (1) of this section. Any wholesaler against whom such demand is made may petition for a redetermination as provided in section 63-3045, Idaho Code, except that the petition must be filed no later than ten (10) days after service upon the person of notice thereof. If a petition for redetermination is not filed within the ten (10) day period, the determination shall become final and the commission shall issue a jeopardy assessment as provided in section 63-3630, Idaho Code, and thereafter may:

(a)  Seize all Idaho cigarette stamps in the possession of the wholesaler which are not applied to cigarettes;

(b)  File a lien of record upon the cigarettes held in inventory by the wholesaler or seize such cigarettes;

(c)  Revoke the wholesaler’s cigarette permit as provided in section 63-2503, Idaho Code, except that no notice or hearing shall be required; and

(d)  Notify the manufacturers of the cigarettes held in inventory by the wholesaler of any or all actions so taken.

(5)  A wholesaler who acquires all cigarettes with tax stamps affixed at the time of acquisition may petition the state tax commission for waiver of the bond required in subsection (1) of this section. Upon receipt of evidence establishing that the wholesaler is not required to pay cigarette taxes under this chapter because the wholesaler exclusively purchases cigarettes with stamps affixed by another wholesaler, the state tax commission may waive the requirement for a bond. Any such waiver is conditioned upon the wholesaler’s continuing qualification for the waiver under this subsection.

History:

[63-2510A, added 1988, ch. 224, sec. 3, p. 430; am. 1990, ch. 41, sec. 1, p. 64; am. 1992, ch. 49, sec. 4, p. 153; am. 2006, ch. 60, sec. 6, p. 189; am. 2016, ch. 28, sec. 1, p. 69.]