Procedures
114.2: Procedures for the Issuance, Renewal, and Revocation of Cigarette Licenses, for the Appointment of Cigarette Stampers, and for Smoking Bar Permits
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114.2: Procedures for the Issuance, Renewal, and Revocation of Cigarette Licenses, for the Appointment of Cigarette Stampers, and for Smoking Bar Permits
 

I.  Introduction

Massachusetts law requires that cigarette manufacturers, wholesalers, vending machine operators, unclassified acquirers, transportation companies and retailers be licensed.   Pursuant to G.L. c. 62C, § 67, the Department of Revenue must conduct an investigation of the prior activities of any person or entity that applies for the issuance of a license from the Commissioner of Revenue to act as a cigarette manufacturer, wholesaler, vending machine operator, unclassified acquirer, transportation company, or retailer, as those terms are defined in G.L. c. 64C, § 1.  The Commissioner has ninety (90) days from the date of an application to either grant or deny the issuance of a license.  If the Commissioner fails to act within that ninety (90) day period, the application is deemed denied.  See Section VI for appeal rights.

Note:  Smokeless tobacco and “little cigars” are defined as “cigarettes” for purposes of the cigarette excise, including licensing.  However, smokeless tobacco is required to be stamped.  Rolls of tobacco wrapped in leaf tobacco or in any substance containing tobacco and as to which 1,000 units weigh not more than 3 pounds are “little cigars.”  See TIR 08-9.  

See TIR 08-16 and TIR 08-17 for information relating to cigar and smoking tobacco retailers and cigar and smoking tobacco distributors. 

II.  Application for a License or an Appointment

License application forms are available from the Cigarette and Tobacco Excise Unit of the Department or from the Department’s website at www.mass.gov/dor.  Those applying for a cigarette retailer’s license should use Form CT-RL.  Retailers may apply on line for a tobacco license through Web File for Business (WFB) on the website mentioned above.  Every other cigarette license applicant should use Form CTL.

Persons seeking appointment as cigarette stampers should also use Form CTL.  Chapter 64C does not categorize cigarette stampers as licensees. Instead, the statute gives the Commissioner of Revenue the authority to appoint stampers.

Applicants should submit a completed application form together with the application fee to the Cigarette and Tobacco Excise Unit.  If an applicant for a retailer license is not already registered to collect sales tax, it must register on line through Web File for Business (WFB) at www.mass.gov/dor to collect sales tax.  Only upon the issuance of a license or appointment as a stamper may the licensee or stamper begin to engage in the business permitted by its license or appointment. 

III.  License Application Requirements

A.  Wholesaler’s Application

Those applying to the Department for a wholesaler’s license must furnish duly executed affidavits from three (3) separate licensed cigarette manufacturers stating that, if the Commissioner grants the license, the manufacturer will sell cigarettes to the wholesaler.  If one or more of the three manufacturers ceases to do business as a cigarette manufacturer, ceases to be licensed as a manufacturer, or for any reason ceases to supply cigarettes to the wholesaler, the licensee must, within 60 days, provide substitute affidavit(s) from other manufacturer(s).  Failure to do so will result in the suspension or revocation of the wholesaler license.

B.  Stamper’s Application for Appointment

A stamper applicant is required to hold one of the following licenses issued pursuant to G.L. c. 62C, § 67 to be considered for appointment as a stamper: a manufacturer license, a wholesaler license, a vending machine operator license or an unclassified acquirer license.  However, neither a retailer license nor a transportation company license will satisfy this prerequisite for appointment as a stamper.

C.  The Department’s Investigation

The Department will review the license or appointment application and such additional information as will allow it to make a judgment about the applicant’s prior business experience, its record of tax compliance and its ability to accurately and faithfully carry out the record-keeping, tax collection, reporting and payment duties that cigarette licensees and appointees assume under G.L. c. 62C, c. 64C, c. 94E and c. 94F.

Upon completion of its investigation, the Department will notify the applicant in writing of its decision whether to grant or deny the application.  Upon approval of an application, the license or appointment letter will be mailed to the applicant at the business address shown on the application.

The grounds upon which the Commissioner may deny the grant of a license are listed in G.L. c. 62C, § 67 and include failure to pay taxes and conviction of a tax crime.

The Commissioner may apply the provisions of G.L. c. 62C, § 67 in reviewing an application for appointment as a stamper.

IV.  License or Appointment Renewal

Each license must be renewed annually, except for the licenses of retailers, which must be renewed every other year. Cigarette retailer licenses expire on September 30 of each year ending in an even digit (e.g., 2010 and 2012).  All other licenses expire annually on June 30.  Appointments of stampers expire annually on June 30.  Each of the grounds upon which the Commissioner may rely to deny the initial application for a license or appointment may also be relied upon to deny an application for renewal.

V.  Suspension or Revocation of a License or Appointment

The Department’s administrative authority to suspend or to revoke a license, as well as the grounds upon which such a suspension or revocation may be based, are found in G.L. c. 62C, § 47A and G.L. c. 62C, § 68.  The Department’s administrative authority to suspend or to revoke the authority of a cigarette stamper is found in G.L. c. 62C and c. 64C.

VI.  Appeal Rights

An applicant whose initial or renewal application for a license has been denied by action of the Department or whose application has been deemed to have been denied where the Department has not acted on the application within 90 days, has the right to appeal the denial to the Appellate Tax Board within sixty (60) days of the date of notice of denial or sixty (60) days from the deemed denial. 

A licensee whose license has been suspended or revoked has the right to appeal to the Appellate Tax Board within ten (10) days after written notice of the suspension or revocation has been mailed or delivered to the licensee.

The Commissioner has the sole discretionary authority to appoint cigarette stampers.  The request for appointment as a cigarette stamper will not be unreasonably withheld and, once granted, will not be revoked, suspended or denied renewal unreasonably as long as the appointed stamper fully and timely complies with all requirements under G.L. c. 62C, c. 64C, c. 94E and c. 94F. 
 

VII.       Responsibilities of Licensees and Stampers

It is the responsibility of each cigarette licensee and cigarette stamper to know and follow all the requirements imposed upon licensees and stampers under all applicable statutes and regulations, including G.L. c. 62C, c. 64C, c. 94E and c. 94F and 830 CMR 64C.14.1 and 830 CMR 94E.1.1.  These duties include, but are not limited to, the keeping of complete and accurate records, the timely filing of all required returns and informational schedules, the payment of the full measure of the cigarette excise and the sales tax, and the sale or stamping of products listed on the Tobacco Product Manufacturer Directory. 

See TIR 08-13 regarding the wholesaler’s requirement to collect and to prepay the sales tax on all tobacco products.   

Any questions concerning the duties of a cigarette licensee or of a cigarette stamper may be directed to the Cigarette and Tobacco Excise Unit at 617-887-5090. As of the date of the publication of this Administrative Procedure, the mailing address of the Cigarette and Tobacco Excise Unit is:

Massachusetts Department of Revenue
Cigarette and Tobacco Excise Unit
P.O. Box 7004
Boston, MA 02204

VIII.      Smoking Bar Permit

A smoking bar is an establishment that holds a valid state license and any required city or town permit and/or license to sell tobacco products and that is primarily engaged in the retail sale of tobacco products for consumption by consumers on the premises.  The phrase “primarily engaged in the retail sale of tobacco products” means that at least 51 per cent of the smoking bar’s combined revenues from the sale of tobacco products, food and beverages are from the retail sale of tobacco products.  Pursuant to G.L. c. 270, § 22 and 830 CMR 270.1.1, applicants for a smoking bar permit must do the following:

    • Complete Form SBP. This form can be found at www.mass.gov/Ador/docs/dor/Cigarette/PDFs/SBP.pdf pdf format of SBP.pdf
;
    • Obtain a Certificate of Good Standing. This application can be found at www.mass.gov/Ador/docs/dor/Forms/MiscForm/PDFs/certgoodstanding.pdf pdf format of certgoodstanding.pdf
;
    • For a first time applicant for a permit, submit a business plan that demonstrates that at least 51 per cent of the applicant's revenues will be generated from the retail sale of tobacco products for consumption on the premises;
    • Provide a copy of any city or town permit and/or license to sell tobacco products; and
    • Mail the above documents to: Massachusetts Department of Revenue, P.O. Box 7004, Boston, MA 02204.

There is no fee for a smoking bar permit.  A permit holder must submit a Smoking Bar Quarterly Declaration (Form SBQD) to the Department every quarter no later than twenty days following the end of the preceding quarter.  Form SBQD can be found at www.mass.gov/Ador/docs/dor/Cigarette/PDFs/SBQD.pdf pdf format of SBQD.pdf
.

If a smoking bar does not file a Form SBQD, the Commissioner will send a written notice to the business requiring that a Form SBQD be submitted within twenty-one days of the notice or the permit will be suspended.  If a smoking bar does not meet the 51 per cent requirement at the end of a quarter and at the end of the year, the Commissioner may suspend or revoke the permit. 

A permit is valid for two years from the date of issuance, unless suspended or revoked.  A permit that is not suspended at the time of its expiration may be renewed for consecutive two-year periods.

Please note that some cities and towns may require that revenues in a percentage greater than 51 per cent be generated from the retail sale of tobacco products for on-premises consumption in order for an establishment to qualify as a smoking bar.


REFERENCES:
G.L. c. 62C, §§ 47A, 67, 68
G.L. c. 64C, § 1
G.L. c. 94E
G.L. c. 94F
G.L. c. 270 § 22
830 CMR 64C.14.1
830 CMR 94E.1.1
830 CMR 270.1.1
TIR 08-9
TIR 08-13
TIR 08-16
TIR 08-17
Certificate of Good Standing (on-line at www.mass.gov/dor)
Form CTL, Application for All Cigarette Licenses
Form CT-RL, Application for Tobacco Retailer License
Form SBP, Application for Smoking Bar Permit 
Form SBQD, Smoking Bar Quarterly Declaration