1. A. Purchases, Payments, and Tax Credits.

   1. (1) Tax stamps may be purchased for:

      1. (a) Cash;
      2. (b) Approved credit up to 95 percent of the face amount of the security filed with and approved by the Comptroller as required by Tax-General Article, §13-825, Annotated Code of Maryland; and
      3. (c) Cigarette tax credits issued by the Comptroller.

   2. (2) Tax stamp payments are due for:

      1. (a) Cash sales at the time of purchase; and
      2. (b) Credit sales made during the month with the cigarette tax return due by the 21st of the month following the report month.
   3. (3) Approved cigarette tax credits used when purchasing cigarette tax stamps shall be presented at the time the purchase order for cigarette tax stamps is placed with the Comptroller.
   4. (4) If any licensed wholesaler who purchases cigarette tax stamps on credit fails to remit full payment for accumulated cigarette tax stamps purchased on credit by the due date, the credit privileges may be suspended or revoked by the Comptroller.

2. B. The Comptroller may exempt a licensed wholesaler from posting a security when the wholesaler has been in continuous compliance with the:

   1. (1) Tobacco tax laws of Maryland for the past 5 years; and
   2. (2) Conditions of any bond or other security filed with the Comptroller pursuant to Tax-General Article, §13-825, Annotated Code of Maryland.

3. C. The Comptroller may revoke an exemption granted to a person under this regulation for:

   1. (1) Failure to be in continuous compliance with the tobacco tax laws;
   2. (2) Failure to pay any tobacco tax or assessment when due;
   3. (3) Failure to file a tobacco tax return or report when due; or
   4. (4) For other good and sufficient reasons.
4. D. A licensee may apply to the Comptroller for reinstatement of a revoked exemption under §C of this regulation. The Comptroller may reinstate the security exemption if the licensed wholesaler has been in continuous compliance as provided in §B for a period of 2 years following the revocation.
5. E. A licensed wholesaler applying for an exemption from filing a security shall complete forms provided by the Comptroller and shall submit the supporting information as the Comptroller deems necessary. This information may include, but is not limited to, an audited financial statement, copies of federal and State tax returns for the preceding 3 years, and a current balance sheet. An exempt licensed wholesaler shall file a renewal application for exemption concurrent with the license renewal application in order to maintain the exemption. When the licensed wholesaler is a corporation, a new exemption application shall be filed any time the officer of the corporation exercising direct control over its fiscal management is changed.

6. F. Security Exemption.

   1. (1) The Comptroller shall notify the applicant in a timely fashion of the approval or rejection of the security exemption.
   2. (2) If approved, the amount of the maximum credit limit based on the past 5 years experience of the wholesaler shall be established.
   3. (3) If, after an exemption has been approved, a licensee's need to purchase tax stamps is in an amount that exceeds the maximum credit limit, the licensee may apply for an additional exemption from filing a security in accordance with §E of this regulation.
7. G. Wholesalers who do not post a security or have not been granted a security exemption under this regulation will be required to purchase stamps by authorizing the Comptroller to withdraw the amounts due from the wholesaler’s bank account, otherwise known a direct debit.

Authority: Tax-General Article, §§2-103, 12-303, and 12-306, Annotated Code of Maryland

Effective date:

Regulation .01 effective June 27, 1961

Regulation .01D repealed effective January 23, 1981 (8:2 Md. R. 110)

Regulation .02 effective April 28, 1965

Regulations .03—.04 effective June 27, 1961

Regulation .05 effective July 1, 1969

Regulation .05A amended effective December 21, 1981 (8:25 Md. R. 1993)

Regulation .05F adopted effective November 16, 1979 (6:23 Md. R. 1838)

Regulation .05 repealed and new Regulation .05 adopted effective September 19, 1988 (15:19 Md. R. 2245)

Regulations .06—.08 effective June 27, 1961

Regulation .07 repealed effective August 6, 1990 (17:15 Md. R. 1853)

Regulation .09 adopted effective January 1, 1987 (13:25 Md. R. 2656)

Chapter revised effective August 6, 1990 (17:15 Md. R. 1854)

Regulation .05 amended effective July 1, 1993 (20:7 Md. R. 639)

Regulation .05G amended effective July 10. 2023 (50:13 Md. R. 511)

Regulation .06 amended effective July 10. 2023 (50:13 Md. R. 511)

Regulation .07B amended effective July 10. 2023 (50:13 Md. R. 511)

Regulation .08 adopted effective May 29, 2000 (27:10 Md. R. 964)

Regulation .08 repealed as an emergency provision effective May 1, 2011 (38:11 Md. R. 670); emergency extended to March 16, 2012 (38:21 Md. R. 1274); repealed permanently effective November 28, 2011 (38:24 Md. R. 1499)

Regulation .08D amended effective August 1, 2005 (32:13 Md. R. 1110); September 1, 2006 (33:17 Md. R. 1436)

Regulation .08H adopted effective March 23, 2009 (36:6 Md. R. 487)

Regulation .09 adopted effective March 4, 2013 (40:4Md. R. 344)