S.C. Code Regs. 117-1600.2 — Stamps Required on Cigarettes

Tax Stamps
(a) Each distributor of cigarettes taxable under Article 5 of Chapter 21 of Title 12 who first receives
untaxed cigarettes for sale or distribution in South Carolina is subject to the tax imposed in S.C. Code
Section 12-21-620. A licensed South Carolina distributor may not sell, distribute or ship unstamped
cigarettes to other South Carolina distributors located in South Carolina. Payment of the tax is
evidenced by a cigarette tax stamp affixed to each individual package of cigarettes by distributors
before being sold, distributed, or shipped to another person; however, each individual package of
cigarettes must be stamped in accordance with Code Section 12-21-735 and within any time period
that may be required under the law so as to not be considered contraband.
A distributor may affix stamps only to packages of cigarettes obtained directly from a manufacturer
or importer with a valid permit issued pursuant to 26 U.S.C. Section 5713. If cigarettes are
manufactured in this State and sold directly to consumers in this State by a manufacturer or importer,
the cigarette packages must be stamped by a licensed distributor before being sold.
Every distributor who first receives within this State manufactured cigarettes on which the required
South Carolina cigarette tax stamp has not been affixed shall purchase all necessary stamps directly
from the Department of Revenue, or the person designated to receive payment on behalf of the
Department, and all such distributors are prohibited from selling or otherwise disposing of South
Carolina cigarette tax stamps to any other person, firm, corporation, club or association.
Orders for stamps shall be sent directly to the Department of Revenue, or the person distributing
cigarette stamps on behalf of the Department, on order forms prescribed for such use and provided by
the Department. The Department of Revenue may, at its discretion, allow or require orders for
cigarette stamps to be submitted by paper form or electronically.
The Department also has the discretion to authorize the sale of cigarette tax stamps on thirty-day
credit periods. If authorized by the Department, distributors may purchase cigarette tax stamps on
thirty-day credit periods, provided a bond has been executed with a solvent surety company qualified
to do business in South Carolina in an amount equal to 110% of the distributor's estimated tax liability
for thirty days, but not less than $2,000. For credit purchases, payment for each calendar month's
liability is due on or before the 20
th day of the following month, including Sundays and holidays. For
example, if a credit purchase is made during May, full payment for that credit purchase is due on or
before the 20
th day of June.
In the event of default in the bonding or payment provisions, the Department has discretion to
revoke a distributor's privilege to purchase stamps. Failure to timely pay will also subject a distributor
to all applicable penalties, interest, and possible revocation of the distributor's license.
(b) Stamps may only be affixed to packages of cigarettes that are listed on the South Carolina
Tobacco Directory published by the Office of the Attorney General pursuant to Section 11-48-30.
(c) No distributor, whose place of business is located without the State of South Carolina and who is
engaged in the sale of cigarettes, shall be permitted to purchase South Carolina cigarette tax stamps
unless and until such distributor agrees in writing to furnish the South Carolina Department of
Revenue any information it may deem necessary concerning the amount of such sales and to whom
such sales have been made, and to open for inspection by the Department, its agents or employees any
books, records, papers, or memoranda, bearing upon the amount of tax payable to the Department on
account of such sales to South Carolina residents or merchants.
(d) No distributor who is engaged in the sale of cigarettes shall be permitted to purchase South
Carolina cigarette tax stamps unless and until such distributor is current in filing any and all reports
and other documentation required by this regulation.
Exempt Stamps
A distributor that receives or possesses cigarettes intended for sale or distribution into or within
South Carolina which are exempt from the tobacco stamp tax under Code Section 12-21-100 shall
affix stamps to each individual package of cigarettes that indicate the package of cigarettes is exempt
from tax. Orders for exempt stamps shall be sent directly to the Department of Revenue, or the person
distributing cigarette stamps on behalf of the Department, on order forms prescribed for such use and
provided by the Department.
Stamp Requirements
The cigarette tax stamps must:
(1) Be of a type that when affixed on each individual package the stamps cannot be removed
without being mutilated or destroyed;
(2) Contain tamper-evident features as determined by the Department of Revenue to make it
difficult to remove or tamper with the stamp as well as anti-counterfeit features as determined by the
Department of Revenue;
(3) Contain a unique serial number or other mark which permits identification of the distributor
that affixed the stamp to the particular package of cigarettes; and
(4) Note whether the taxes prescribed by Chapter 21 of Title 12 were paid or whether the package
of cigarettes was exempt from the taxes.