(For Effective Date, See note.) Excise Tax; Rate on Tobacco and Vaping Products; Retail Selling Price Before Addition of Tax; Exemptions; Collection and Payment on First Transaction; Dealers or Distributors; Tax Separately Identified; Collection

1. Law
2. Georgia Code
3. Revenue and Taxation
4. Taxes on Tobacco and Vaping Products
5. (For Effective Date, See note.) Excise Tax; Rate on Tobacco and Vaping Products; Retail Selling Price Before Addition of Tax; Exemptions; Collection and Payment on First Transaction; Dealers or Distributors; Tax Separately Identified; Collection

1. An excise tax, in addition to all other taxes of every kind imposed by law, is imposed upon the sale, receipt, purchase, possession, consumption, handling, distribution, or use of cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, and vapor products in this state at the following rates:
   1. Little cigars: two and one-half mills each;
   2. All cigars other than little cigars: 23 percent of the wholesale cost price, exclusive of any trade, cash, or other discounts or any promotion, advertising, display, or similar allowances;
   3. Cigarettes: 37› per pack of 20 cigarettes and a like rate, pro rata, for other size packages;
   4. Loose or smokeless tobacco: 10 percent of the wholesale cost price, exclusive of any trade, cash, or other discounts or any promotion, advertising, display, or similar allowances;
   5. Consumable vapor products in a closed system: 5› per fluid milliliter;
   6. Consumable vapor products in an open system: 7 percent of the wholesale cost price, exclusive of any trade, cash, or other discounts or any promotion, advertising, display, or similar allowances; and
   7. Vapor devices that contain any consumable vapor product at the time of sale and which are not designed or intended to be reused or refilled: 7 percent of the wholesale cost price, exclusive of any trade, cash, or other discounts or any promotion, advertising, display, or similar allowances.
2. When the retail selling price is referred to in this chapter as the basis for computing the tax, it is intended to mean the ordinary retail selling price of the article to the consumer before adding the amount of the tax.
3. The taxes imposed by this chapter are levied on the purchase or use of cigars, cigarettes, or loose or smokeless tobacco by the state or any department, institution, or agency of the state and by the political subdivisions of the state and their departments, institutions, and agencies. The taxes imposed by this chapter are not imposed on cigars, cigarettes, or loose or smokeless tobacco purchased exclusively for use by the patients at the Georgia War Veterans Home and the Georgia War Veterans Nursing Home.
4. The taxes imposed by this chapter are not levied on cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, or vapor products, the purchase or use of which this state is prohibited from taxing under the Constitution or statutes of the United States.
5. The taxes imposed by this chapter shall be advanced and paid by the dealer or distributor licensed pursuant to this chapter to the commissioner for deposit and distribution as provided in this chapter upon the first transaction within this state, whether or not the transaction involves the ultimate purchaser or consumer. The licensed dealer or distributor shall collect the tax on the first transaction within this state from the purchaser or consumer, and the purchaser or consumer shall pay the tax to the dealer or distributor. The dealer or distributor shall be responsible for the collection of the tax and the payment of the tax to the commissioner. Whenever cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, or vapor products are shipped from outside this state to anyone other than a distributor, the person receiving the cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, or vapor products shall be deemed to be a distributor and shall be responsible for the tax on the cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, or vapor products and the payment of the tax to the commissioner. No tobacco products, alternative nicotine products, or vapor products shall be received in, sold in, or shipped into this state unless lawfully obtained from a person licensed pursuant to this chapter or from an importer with a valid permit issued pursuant to 26 U.S.C. Section 5712.
6. The amount of taxes advanced and paid to the state as provided in this Code section shall be added to and collected as a part of the sales price of the cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, or vapor products sold or distributed. The amount of the tax shall be stated separately from the price of the cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, or vapor products.
7. The cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, and vapor products tax imposed shall be collected only once upon the same cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, or vapor products.

(Ga. L. 1955, p. 268, § 3; Ga. L. 1955, Ex. Sess., p. 48, § 1; Ga. L. 1964, p. 50, § 1; Ga. L. 1967, p. 563, §§ 2-4; Ga. L. 1971, p. 36, §§ 1, 2; Ga. L. 1971, p. 346, § 1; Code 1933, § 91A-5502, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1983, p. 1834, § 13; Ga. L. 1986, p. 468, § 1; Ga. L. 2003, p. 665, § 19; Ga. L. 2012, p. 831, § 2/HB 1071; Ga. L. 2020, p. 257, § 2/SB 375.)

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 2003, "; and" was substituted for a period at the end of paragraph (a)(3).

Editor's notes.

- Ga. L. 1986, p. 468, § 2, not codified by the General Assembly, provided that that Act would become effective July 1, 1986, and would apply to taxable events and transactions occurring on or after that date.

Ga. L. 2003, p. 665, § 1, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'State and Local Tax Revision Act of 2003.'"

Law reviews.

- For article, "Revenue and Taxation: Amend Titles 48, 2, 28, 33, 36, 46, and 50 of the Official Code of Georgia Annotated, Relating Respectively to Revenue and Taxation, Agriculture, the General Assembly, Insurance, Local Government, Public Utilities, and State Government," see 28 Georgia St. U.L. Rev. 217 (2011).

JUDICIAL DECISIONS

Editor's notes.

- In light of the similarity of the statutory provisions, decisions under Ga. L. 1937, p. 83, § 1, which was subsequently repealed but was succeeded by provisions in this Code section, are included in the annotations for this Code section.

Tax does not violate commerce clause.

- Cigarette tax laid not upon the privilege of receiving cigarettes in this state, but levied upon the privilege of retaining, keeping, holding, or possessing cigarettes for personal use, after the cigarettes have been received, acquired, or brought into this state, is not violative of the commerce clause, U.S. Const., Art. I, Sec. 8, Cl. 3. Head v. Cigarette Sales Co., 188 Ga. 452, 4 S.E.2d 203 (1939) (decided under Ga. L. 1937, p. 83, § 1).

Tax is an excise tax, not ad valorem, and not unconstitutional for nonuniformity.

- Tax imposed upon every person who received by means in this state, and who held or possessed for his or her own personal use in this state, or for the use of any member of their family, cigarettes which had been stamped as required, is an excise upon the privilege of holding or possessing such cigarettes for personal use, and not a direct or ad valorem tax upon such articles, and accordingly, does not violate Ga. Const. 1877, Art. VII, Sec. II, Para. I because it was not uniform with an ad valorem tax levied by the state upon tangible property. Head v. Cigarette Sales Co., 188 Ga. 452, 4 S.E.2d 203 (1939) (decided under Ga. L. 1937, p. 83, § 1).

Different treatment of those holding stamped or unstamped cigarettes constitutional.

- State does not create an unreasonable classification in violation of the uniformity clause, Ga. Const. 1877, Art. VII, Sec. II, Para. I, in levying a tax upon persons who hold or possess for personal use unstamped cigarettes, while exempting those who hold or possess cigarettes for such purpose which have been stamped by a dealer as required by law. Head v. Cigarette Sales Co., 188 Ga. 452, 4 S.E.2d 203 (1939) (decided under Ga. L. 1937, p. 83, § 1).

Tax is not part of cost of property sold for sales and use tax purposes.

- If the imposition of taxes, such as those on cigarettes, falls upon the consumer or the incident of the sale by the retailer to the consumer they are not included as part of the retail sale price for calculating the sales and use tax. If, however, the tax is imposed at a time prior to the point of retail sale or other consumer transaction, it is an element of the cost of the property sold and must be included as part of the retail sale price for purposes of calculating the sales and use tax imposed by Ga. L. 1951, p. 360 (see O.C.G.A. Art. 1, Ch. 8, T. 48). The state cigarette tax is not an element of the "cost of the property sold" and is not, therefore, included in "gross sales" and "sales price" upon which the sales and use tax is calculated. Blackmon v. Coastal Serv., Inc., 125 Ga. App. 28, 186 S.E.2d 441 (1971), aff'd, 229 Ga. 471, 192 S.E.2d 372 (1972).

Tax collected once, but imposed on every step in distribution and consumption.

- Cigar and cigarette tax is an excise tax, to be collected only once, but nevertheless imposed upon each separate transaction and event in the process of distribution and consumption. In re Jim Clay Tobacco Co., 355 F. Supp. 274 (N.D. Ga. 1973).

Cigar and cigarette tax is levied against the distributor. In re Jim Clay Tobacco Co., 355 F. Supp. 274 (N.D. Ga. 1973).

There is no substantial independent significance in the distinction between the words "distributor" and "taxpayer." In re Jim Clay Tobacco Co., 355 F. Supp. 274 (N.D. Ga. 1973).

Inability to collect from vendees does not absolve the distributor of the burden to pay the excise tax imposed by this section although the state, in the state's discretion, may pursue whatever entity appears most likely to yield results. In re Jim Clay Tobacco Co., 355 F. Supp. 274 (N.D. Ga. 1973).

Under this section, there is no doubt that the distributor's liability is absolute, without regard to whether or not the distributor is able to pass on the economic burden to retail distributors and the ultimate retail consumers. If the cigarettes are destroyed in a fire before the ultimate retail sale, while in the hands of a retail distributor, or if the retail distributor becomes a bankrupt, the distributor's obligation is nevertheless fixed. In re Jim Clay Tobacco Co., 355 F. Supp. 274 (N.D. Ga. 1973).

OPINIONS OF THE ATTORNEY GENERAL

Department is not authorized to permit the National Guard to purchase or sell cigarettes or cigars without the payment of the tobacco tax. 1963-65 Op. Att'y Gen. p. 242.

RESEARCH REFERENCES

Am. Jur. 2d.

- 71 Am. Jur. 2d, State and Local Taxation, §§ 22, 23, 434, 439, 492.

C.J.S.

- 53 C.J.S., Licenses, § 55. 84 C.J.S., Taxation, § 159 et seq.

ALR.

- Deductibility of other taxes or fees in computing excise or license taxes, 174 A.L.R. 1263.

What constitutes a sale "at retail" within federal retailers' excise tax statute (26 USC (IRC 1954) chap 31), 93 A.L.R.2d 1120.

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