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KS Notice 15-01 Cigarette Tax 2015-07-01

What is the new Kansas cigarette tax rate on July 1, 2015 and what inventory tax is owed?

Short answer: Revised Kansas Notice 15-01 explains that, effective July 1, 2015, the Kansas cigarette tax rate rose to $1.29 on each pack of 20 cigarettes (or $1.61 on each pack of 25). Wholesalers, retailers, and vending machine operators had to take inventory of cigarette stamps and stamped packs on hand at 12:01 a.m. July 1, 2015 and pay an additional floor-stock tax of $0.50 on each 20-cigarette pack ($0.62 on each 25-cigarette pack), with the extra tax due in full no later than October 31, 2015 and penalty and interest assessed on late payment. The inventory report (form CG-117) was due July 31, 2015 with a CG-3 voucher. The wholesale discount rate dropped from 0.80% to 0.55% on July 1, 2015, and wholesalers could order stamps only against 85% of their tax credit bond. The notice carries no printed issue date; the date shown reflects the July 1, 2015 effective date of the increase.

Apply this to your situation

This page answers the general question as of 2015. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 2015
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Notice: public guidance the Department issues to explain Kansas tax law, most often a newly enacted statute. It states the Department's general interpretation and administration of the law; it does not have the force of law and is not a private ruling issued to any one taxpayer. It reflects the statutes, regulations, and rates in effect on its issue date and may since have been amended or superseded by a later notice or law change, so confirm it is still current before relying on it. Kansas state and local sales and use taxes are administered centrally by the Department, so there is no self-collected home-rule city tax outside its scope. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Revised Kansas Notice 15-01 explains a cigarette tax rate increase and the one-time inventory (floor-stock) tax that came with it.

The new rate. Effective July 1, 2015, the cigarette tax rose to $1.29 on each pack of 20 cigarettes (or fractional part) and $1.61 on each pack of 25.

The inventory tax. Wholesalers, retailers, and vending machine operators had to take inventory of cigarette stamps (wholesalers only) and stamped packs on hand at 12:01 a.m., July 1, 2015, and pay an additional tax of $0.50 on each 20-cigarette pack ($0.62 on each 25-cigarette pack) then in stock. That additional tax was due in full no later than October 31, 2015; penalty and interest are assessed on late payment.

Forms. File the Tax Rate Change Inventory Report (form CG-117) by July 31, 2015, with a Cigarette Inventory Tax Voucher (CG-3); keep a copy for your records.

Wholesaler changes. The wholesale discount rate dropped from 0.80% to 0.55% on July 1, 2015. Wholesalers may need to update their tax credit bond and may order only against 85% of the bond. Violations may result in license suspension or revocation and/or fines.

Date note. The notice carries no printed issue date; the date shown reflects the July 1, 2015 effective date of the increase.

What this means for you

Cigarette wholesalers

  • Pay the $0.50-per-20-pack (or $0.62-per-25-pack) floor tax on stamps and stamped packs on hand at 12:01 a.m. July 1, 2015, by October 31, 2015; file form CG-117 by July 31.
  • The wholesale discount fell to 0.55%, and you may order stamps only against 85% of your tax credit bond.

Retailers and vending machine operators

  • Take inventory of stamped packs on hand at 12:01 a.m. July 1, 2015 and pay the additional per-pack tax by October 31, 2015.

Common questions

What is the new cigarette tax rate? $1.29 per pack of 20 (or $1.61 per pack of 25), effective July 1, 2015.

How much is the inventory tax? $0.50 on each 20-cigarette pack and $0.62 on each 25-cigarette pack on hand at 12:01 a.m. July 1, 2015.

When is the inventory tax due? In full by October 31, 2015; the CG-117 report is due July 31, 2015.

Did the wholesale discount change? Yes -- from 0.80% to 0.55%, and wholesalers may order only against 85% of their bond.

Citations and references

  • Effective July 1, 2015: cigarette tax $1.29 per 20-pack / $1.61 per 25-pack; floor-stock tax $0.50 / $0.62 per pack due October 31, 2015.
  • Form CG-117 (Tax Rate Change Inventory Report) due July 31, 2015 with CG-3 voucher.
  • Wholesale discount 0.80% to 0.55%; wholesalers may order against 85% of the tax credit bond.

Source

Original ruling text

Miscellaneous Tax
Division of Taxation Phone: (785) 368-8222
915 SW Harrison St FAX: (785) 291-3968
Topeka KS 66612-1588 www.ksrevenue.org
Nick Jordan, Secretary Department of Revenue Sam Brownback, Governor
Steve Stotts, Director of Taxation

                                        REVISED NOTICE 15-01

              Notice of Cigarette Tax Increase and Inventory Requirements

To comply with recent legislative changes, your company is required to take inventory of the
cigarette stamps not attached to cigarette packs (Wholesalers Only) and stamped packs
(Wholesalers, Retailers, and Vending Machine Operators) on hand at 12:01 a.m., July 1,
2015. On and after July 1, 2015 the tax rate will be $1.29 on each pack of 20 cigarettes or
fractional part thereof or $1.61 on each pack of 25 cigarettes.

Your Company is required to pay an additional tax of $0.50 on each 20-cigarette pack or $0.62
on each 25-cigarette pack in stock as of 12:01 a.m. Payment of the additional tax on your
inventory must be submitted in full no later than October 31, 2015. Penalty and Interest will
be assessed if the payment is not received in a timely manner.

Enclosed are the Tax Rate Change Inventory Report (CG-117) and a Cigarette Inventory Tax
Voucher (CG3). Complete Form CG-117 and return it by July 31, 2015. Please keep a copy of
the Tax Rate Change Inventory Report for your records.

Effective July 1, 2015, the wholesale discount percentage rate will change from 0.80% to 0.55%.

Wholesalers: You may need to update your Tax Credit Bond. You may only order against 85%
of the bond.

Please be advised that violations of these statutory provisions may result in license suspension or
revocation and/or fines. Thank you for your cooperation in this matter.

                                        Taxpayer Assistance

Additional copies of this notice, forms or publications are available from our web site,
www.ksrevenue.org. If you have questions, please contact:

                                 Customer Relations/Miscellaneous Tax
                                    Kansas Department of Revenue
                                         915 SW Harrison St.
                                       Topeka, KS 66612-1588
                                          Phone: 785-368-8222
                                          Fax: 785-291-3968

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