A bill to increase penalties and confiscations of untaxed tobacco products has passed the Alabama Senate.
Senate Bill 216 (SB216), by Sen. Bobby Singleton (D–Montgomery), seeks to add an additional level of tracking and enforcement by the Alabama Department of Revenue (ADR).
This bill would deem the sale of tobacco products, when the purchaser uses a sales tax number to purchase the products, to be considered a purchase for resale and would require the seller to obtain a tobacco tax account with the ADR and report the sales monthly.
The bill would also penalize non-registered sellers who fail to obtain a tobacco tax account. This bill would authorize civil and criminal penalties relating to transporting or distributing unstamped or untaxed tobacco products by any person without an active tobacco permit or transporters permit, including seizure of the products and the vehicle used to transport the products.
“This just gives [ADR] another tool in the toolbox to be able to collect taxes on tobacco products,” Singleton said.
The ADR would set up a website used for registered retailers to create an online account. Anyone who sells tobacco products without an account would be in violation of this bill, and any products sold could be considered contraband by the state. The contraband goods may be seized without a warrant and disposed of or destroyed by law enforcement, and the seller could face significant fines.
The penalties for the first offense of transporting untaxed tobacco would be considered a class A misdemeanor, which carries a fine of up to $6,000 and one year in jail. Any subsequent violations would be viewed as a Class C felony, which has a 10-year maximum sentence.
The bill would also permit any vehicle used to transport confiscated products to be subject to confiscation by law enforcement and sold at public auction to the highest bidder after due advertisement.
The ADR currently has broad sections on its website detailing the rules and regulations pertaining to tobacco and tobacco tax. The current ADR website allows citizens to report cigarette tax evasion, cigarette smuggling, counterfeit cigarette sales, and other violations. It also has information about the tobacco tax in Alabama.
It is unclear who will have access to the online database created by the ADR, nor does it state the qualifications for obtaining a tobacco tax account.
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