| This publication is designed to provide general information to tobacco
retailers and assist taxpayers in complying with current laws and rules.
. . .
For complete details, refer to the Arizona Revised Statutes and the
Arizona Administrative Code. In case of inconsistency or omission in this
publication, the language of the Arizona Revised Statutes and the Arizona
Administrative Code will prevail.
If you are a retailer selling cigarettes or other tobacco products,
you should read this brochure carefully. It provides you with important
information regarding tobacco tax rates, including the tobacco tax rates
on Indian reservations. It also provides information about the tax stamps
that must be affixed to packages of cigarettes. It is essential that you
are familiar with the tax stamps that must be affixed. Your cigarettes
will be seized if you process unstamped or improperly stamped cigarettes,
and you will be subject to misdemeanor or felony charges. . . .
Indian Reservation Tobacco Tax
The Indian Reservation Tobacco Tax generally pertains to the sale on
an Indian reservation of cigarettes, cigars, smoking tobacco, plug tobacco,
snuff and other forms of tobacco to non-Indians and is a tax on the consumer,
not the seller.
The Indian Reservation Tobacco Tax does not apply to cigarettes
and other tobacco products sold on a reservation by an Indian tribe, by
an Indian retailer who is an enrolled member of the tribe, or by a federally
licensed Indian trader to enrolled members of the tribe for whose benefit
the reservation was established. The Indian Reservation Tobacco Tax also
does not apply if the full luxury tax has otherwise been paid. The full
luxury tax of 58 cents for a pack of 20 cigarettes is paid on sales to
non-Indians by non-Indian retailers on a reservation. On the basis of tribal
membership, each tribe has been allocated a maximum number of tax-exempt
cigarettes that can be sold annually on a reservation to enrolled members
of the tribe by an Indian tribe, an Indian retailer, or a federally licensed
Indian trader. This annual allocation is divided into monthly allocations,
and distributors are notified each month as to the maximum number of tax-exempt
cigarettes that can be sold during that month to each Indian tribe and
to each Indian retailer registered with the Department of Revenue.
Indian Tribes may impose their own tobacco tax or similar levy. When
a tribal tax has been imposed by an Indian tribe, distributors are notified
and provided with information on how to proceed and how to stamp cigarettes.
Indian Reservation Tobacco Tax Rates:
Item Tax Rate
 |
Cigarettes (per 20 pack) or $.40per individual cigarette $.02 |
|
Smoking tobacco, snuff, etc. $.045 per oz. |
|
Cavendish, plug or twist $.011 per oz. |
|
Small cigars (weighing not more than 3# per 1000) $ .089 per 20 |
|
All other cigars (retailing at not more than $.05 each) $.044 per 3 |
|
All other cigars(retailing at more than $.05 each) $.044 each |
Reservation retailers are required to complete the Reservation Retailers
Monthly Report Form 805, which must be filed with the Department
of Revenue no later than the 20th day of the month following the month
for which the return is prepared. This report reflects the cigarette and
other tobacco sales, including the sale of tax-free cigarettes.
Tax Stamps
Distributors initially pay the appropriate taxes to the Department of
Revenue for the sale of cigarettes by obtaining tax stamps from the Department
of Revenue to affix to cigarette packages reflecting that the tax has been
paid. There are three different stamps to be affixed to cigarettes.
The distributor affixes the stamps on all packages of cigarettes that are
to be sold. Three factors are considered when determining which
stamp is to be affixed to a package of cigarettes, as follows:
Location of Sale
Type of Seller
Type of Buyer
The following are the three types of stamps to be affixed.
1. Blue Stamp (General luxury tax stamp)
2. Red Stamp (Indian Reservation luxury tax stamp)
3. Green Stamp (Indian Reservation tax free stamp)
The blue stamp is for the full amount of the tax, e.g., 58 cents
per pack of 20 cigarettes. This stamp is affixed to all cigarettes except
those to be sold by Indian retailers ontheir own reservations.
Blue stamped cigarettes are the only cigarettes that may be in retail
outlets off the reservation or for sale off the reservation. Retailers
off the reservation may not buy red stamped or green stamped cigarettes
for resale.
The red stamp is to be affixed to cigarettes to be sold
on
a reservation, by Indian tribes or Indian retailers to anyone that is not
a Tribal member. This stamp denotes the Indian Reservation Tobacco Tax,
40 cents per pack of 20 cigarettes, has been paid. No red stamped
cigarettes may be in retail outlets off the reservation or for sale off
the reservation.Also Indian retailers may not purchase for resale red stamped
cigarettes from retailers on other reservations.
The green stamp is to be affixed to cigarettes that may be sold
tax free, according to the allocation formula, on a reservation by an Indian
tribe, by a federally licensed Indian trader, or by authorized Indian retailers
to enrolled members of the tribe. Indian retailers must be registered
with the Department of Revenue to sell tax-free. An application form (DOR
20-2039) must be completed and approved to be registered as an authorized
retailer. No green stamped cigarettes may be in retail outlets off
the reservation or for sale off the reservation. Also, Indian
retailers may not purchase for resale green stamped cigarettes from retailers
on other reservations.
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