Neb. Admin. Code § 316-57-010 — Petition for Approval of a Lower Cost

010.01 Any wholesaler making wholesale sales of cigarettes to licensed Nebraska retailers or any retailer making retail sales of cigarettes in Nebraska who desires to prove that the cost of doing business in Nebraska is less than the statutory presumptive cost of doing business computed according to the Unfair Cigarette Sales Act may submit a petition for approval of a lower cost along with actual cost data to DOR. The statutory presumptive cost of doing business is used in determining cigarette sales prices until approval has been granted by the Tax Commissioner to sell at a lower cost. 010.02 The petition for approval of a lower cost must include the following cost information: 010.02(A) Any person making sales of cigarettes in Nebraska for more than a 12 month period will submit actual cost data for the 12 month period ending no more than 90 days prior to the submission of the petition, and actual cost data for each of the petitioner's locations that intend to sell cigarettes at less than the statutory presumptive cost of doing business. 010.02(B) Any person making sales of cigarettes in Nebraska for less than a 12 month period will submit actual cost data for the period beginning with the start of business and ending no more than 90 days prior to the date the petition for approval of a lower cost was submitted for each of the petitioner's locations. In addition, the petitioner will submit an explanation of any expected differences between the petitioner's actual cost data and the costs for the remaining months of the initial 12 month period of operations. 010.03 Upon receiving the petition for approval of a lower cost and actual cost data, the Tax Commissioner will do one of the following within 45 days: 010.03(A) Approve the petition; 010.03(B) Request additional cost data or an explanation of the previously submitted information; 010.03(C) Schedule the matter for hearing at least 20 days, but not more than 60 days, after the date of mailing of the hearing notice; or 010.03(D) Return as incomplete any petition for approval and actual cost data that does not contain the necessary information. 010.04 DOR must notify the petitioner of the Tax Commissioner’s determination within 45 days after the hearing. Any order of approval will include the percentage of cost of doing business as determined by DOR for the petitioner's specific location. 010.04(A) The percentage of cost of doing business must be used by the petitioner when establishing the minimum selling price for cigarettes that are to be sold at a specific location. 010.04(B) The initial order of approval will also contain an expiration date not to exceed 18 months from the date of the approval. The expiration date should coincide with the petitioner's calendar or fiscal year end. Each subsequent order of approval cannot exceed 12 additional months. 010.05 The actual cost data to be submitted shall (1) be based on cost of goods sold, (2) contain the petitioner's basic cost of cigarettes sold for the specific location, (3) set forth each specific total direct cost, overhead cost, and expense paid or incurred, and (4) set forth the basis used to allocate each overhead cost and expense item in the purchase and sale of cigarettes in Nebraska. The total dollar amount of each overhead cost and expense item to be allocated must be set forth and followed by a showing of its 100% allocation. 010.06 When submitting actual cost data, the petitioner must provide supporting documentation such as, but not limited to: 010.06(A) A written explanation of any difference between the petitioner's overall cost of doing business from his or her cigarette cost of doing business for the specific location that is engaged in the business of selling cigarettes at wholesale to licensed Nebraska retailers or making sales of cigarettes at retail in this state; 010.06(B) A copy of one cigarette purchase invoice from each cigarette manufacturer or wholesaler for every month of the period of analysis; 010.06(C) Copies of the latest filed federal income tax returns including Schedule A and all attachments; 010.06(D) Schedule K-1 (Form 1065); 010.06(E) Form 4562; 010.06(F) Latest available income statements; 010.06(G) Latest available annual reports; and 010.06(H) Any other financial statements or information necessary to substantiate the actual cost data. (Neb. Rev. Stat. §§ 28-1423, and 59-1501 through 59-1518. March 21, 2022.)