S.C. Code Regs. 117-1600.5 — Stamping and Storage of Cigarettes in South Carolina by a Distributor

(A) Stamping Methods
Distributors generally stamp and store cigarettes in one of two methods - a ''Stamp-to-Order''
method and an ''Advanced Stamping'' method. These methods can be briefly described as follows:
Stamp-to-Order Method: Under this method, cigarettes are stamped only as orders are received.
Once the cigarettes are stamped, distributors typically load the order onto a truck or place the order in
a staging area for loading onto a truck either later that day or the next day. The stamp-to-order
method is only permissible in South Carolina if the law does not require that cigarettes be stamped
within a specified time period in order not to be considered contraband.
Advanced Stamping Method: Under this method, cigarettes are stamped before orders are received.
If the law requires that cigarettes be stamped within a specified time period in order not to be
considered contraband, then distributors must stamp all cigarettes within the time period established
by law so as not to be considered contraband.
(B) Storage Requirements
The storage requirements established in this section only apply to warehouses located in South
Carolina. Each warehouse in South Carolina which, in addition to selling South Carolina tax paid
cigarettes, sells cigarettes in another state or cigarettes which are tax exempt in South Carolina, must
obtain approval of its storage method from the Department in advance of implementation. South
Carolina warehouses which only sell South Carolina tax paid cigarettes are not required to obtain
approval of their storage methods.
Stamp-to-Order
If a distributor is permitted under this regulation and approved by the Department to use the
stamp-to-order method, then the distributor is not required to maintain separate compartments or
areas for South Carolina tax paid cigarettes, cigarettes to be sold in another state, and cigarettes to be
sold tax exempt in South Carolina. However, the distributor's staging areas must be clearly marked
and separated to avoid commingling of South Carolina tax paid cigarettes with cigarettes to be sold in
another state or cigarettes to be sold tax exempt in South Carolina. The Department must approve the
distributor's staging areas in advance of implementation. The Department will provide a copy of the
written approval to the distributor to maintain for the distributor's records. If the distributor at a later
date redesigns its warehouse or system whereby the Department-approved staging areas are changed,
such change must be approved by the Department in advance of implementation.
Advanced Stamping
If a distributor is approved by the Department to use the advanced stamping method, then the
distributor is required to maintain separate compartments or areas for cigarettes. Distributors who
follow the advanced stamping method must, at a minimum, maintain one separate area for South
Carolina tax paid cigarettes and one separate area for cigarettes to be sold in another state and/or
cigarettes to be sold tax exempt in South Carolina. Alternatively, distributors may choose to maintain a
separate area for each respective state and a separate area for cigarettes to be sold tax exempt in South
Carolina.
These areas may be separated by creating a separate room(s), compartment(s), by using a bin(s), or
other manner of storage clearly separating South Carolina tax paid cigarettes from cigarettes to be sold
in another state and/or cigarettes to be sold tax exempt in South Carolina. Distributors must clearly
mark the separate areas with signs warning employees regarding which cigarettes are South Carolina
tax paid cigarettes, which cigarettes are to be sold in another state, and which cigarettes are to be sold
tax exempt in South Carolina.
Any distributor operating a warehouse where cigarettes are stamped in advance must obtain
approval from the Department for its separate room(s), compartment(s), bin(s), or other manner of
storage in advance of implementation. The Department will provide a copy of the written approval to
the distributor to maintain for the distributor's records. If the distributor at a later date redesigns its
warehouse or system whereby the Department-approved separate room(s), compartment(s), bin(s), or
other manner of storage is changed, such change must be approved by the Department in advance of
implementation.
(C) Other Stamping and Storage Methods
There may be other stamping and storage methods than stamp-to-order and advanced stamping. All
other stamping and storage methods must be approved by the Department on a case-by-case basis.
Written approval for another stamping and storage method must be obtained from the Department in
advance of implementation. The Department will provide forms for distributors to submit requests for
approval of stamping and storage methods, and approval will be determined on a warehouse-by-
warehouse basis. The Department will provide a copy of the written approval to the distributor to
maintain for the distributor's records. If the distributor at a later date redesigns its warehouse or
system whereby the Department-approved stamping and storage method is changed, such change
must be approved by the Department in advance of implementation.
The provisions of this subsection do not apply to distributors who only sell South Carolina tax paid
cigarettes and who do not sell cigarettes in another state or cigarettes which are tax exempt in South
Carolina.