1. (a) A tax is levied, assessed, and imposed upon the use, consumption, or possession for use of cigarettes within Indiana at the rates set forth and in the manner provided in section 12 of this chapter.
2. (b) Payment of the taxes levied, assessed, and imposed by this chapter is evidenced by purchasing and affixing stamps to individual packages of cigarettes, or otherwise by canceling the stamps, as provided in this chapter. Except as provided in subsection (e), a distributor shall firmly and securely affix each individual package of cigarettes (even those contained within a carton or larger containers of cigarettes) with the requisite denomination and amount of stamps upon the receipt of cigarettes taxed under this chapter.

3. (c) Once a stamp has been affixed to an individual package of cigarettes, no further tax may be assessed, imposed, or collected upon the sale or use of the package of cigarettes. If a retailer receives cigarettes that do not have the proper amount of stamps firmly affixed to each individual package by a distributor, the retailer shall:

   1. (1) stamp or firmly affix stamps immediately on each individual package if the retailer is also a licensed distributor; or
   2. (2) if the retailer is not a licensed distributor, return the stamps to the distributor from whom the stamps that were to have been firmly affixed were purchased.
4. (d) The payment and affixing of a stamp on an individual package of cigarettes shall be considered as an advance payment, precollected for convenience and facility only, and shall be added to the price of the cigarettes and recovered from the ultimate consumer or user. Notwithstanding any other provisions contained in this chapter, the liability for the tax imposed by this chapter shall be conclusively presumed to be on the retail purchaser or ultimate consumer.
5. (e) A distributor engaged in interstate business shall be permitted to set aside part of the distributor's stock of individual packages as may be necessary for the conduct of such interstate business without affixing the stamps required by this chapter.
6. (f) Distributors, wholesalers, or retailers may state the amount of the tax separately from the price of such cigarettes on all price display signs, sales or delivery slips, bills, and statements which advertise or indicate the price of such cigarettes.
7. (g) Sample packages of cigarettes may not be distributed in this state without stamps of the proper denomination affixed to the package.

As amended by P.L.2-1988, SEC.26; P.L.191-2016, SEC.5; P.L.128-2026, SEC.43.