§ 3-2-103. Method of collection.

(a)

The tax imposed by this article shall be evidenced by the use of a tax stamp and shall be paid by each dealer or other person liable for the tax under a reporting method deemed by the board to carry out the provisions of this article. The stamps shall be affixed in such a manner that their removal will require continued application of water or steam. Each dealer or other person liable for the tax is hereby required, and it shall be his duty to collect and pay the tax and report all packages of cigarettes on forms prescribed for this purpose by the board:

(1)

the quantity of Northern Virginia Cigarette Tax Board-stamped cigarettes sold or delivered to:

a.

each registered agent appointed by the board for which no tax was collected;

b.

each manufacturer's representative; and

c.

each separate person and place of business within the city during the preceding calendar month; and

(2)

the quantity of Northern Virginia Cigarette Tax Board stamps on hand, both affixed and unaffixed on the first day and the last day of the preceding calendar month and the quantity of Northern Virginia Cigarette Tax Board stamps or Northern Virginia Cigarette Tax Board-stamped cigarettes received during the preceding calendar month;

(3)

the quantity of cigarettes on hand to which the Northern Virginia Cigarette Tax Board stamp had not been affixed on the first and last day of the preceding calendar month and the quantity of cigarettes received during the preceding calendar month to which the Northern Virginia Cigarette Tax Board stamp had not been affixed; and

(4)

any further information as the administrator for the board may require for the proper administration and enforcement of this article for the determination of the exact number of cigarettes in the possession of each dealer or user.

(b)

Each dealer or other person liable for the tax shall file such reports with the board and pay the tax due to the board prior to the due date and shall furnish copies of any cigarette tax reports submitted to the Virginia Department of Taxation.

(c)

When, upon examination and audit of any invoices, records, books, cancelled checks or other memoranda touching on the purchase, sale, receipt, storage or possession of tobacco products taxed herein, any dealer or other person liable for the tax is unable to furnish evidence to the board of sufficient tax payments and stamp purchases to cover cigarettes which were sold, used, stored, received, purchased or possessed by him, the prima facie presumption shall arise that such cigarettes were received, sold, used, stored, purchased or possessed by him without the proper tax having been paid. The board, shall, from the results of such examination and audit based upon such direct or indirect information available, assess the tax due and impose a penalty of 10 percent and may impose interest of three-quarters percent per month of the gross tax due.

(d)

When any dealer or other person liable for the tax files a false or fraudulent report or fails to file a report or fails to perform any act or performs any act to evade payment of the tax, the board shall administratively assess the tax due and impose a penalty not to exceed 50 percent of the tax due and interest of three-quarter percent per month of the gross tax due.

(e)

The dealer or other person liable for the tax shall be notified by certified mail of the deficiency and such tax, penalty and interest assessed shall be due and payable within 10 days after notice of the deficiency has been issued. Every dealer or other person liable for the tax shall examine each package of cigarettes to ensure that the Northern Virginia Cigarette Tax Board stamp has been affixed thereto prior to offering them for sale.

(f)

Any dealer or other person liable for the tax who shall receive cigarettes not bearing the Northern Virginia Cigarette Tax Board stamp shall, within one hour of receipt of such cigarettes, commence and with all reasonable diligence continue to affix the Northern Virginia Cigarette Tax Board stamp on each and every package of cigarettes until all unstamped packages of cigarettes have been stamped and before offering the cigarettes for sale. Any dealer or other person liable for the tax who has notified the board that he is engaged in interstate or intrastate business shall be permitted to set aside any part of his stock as may be legally kept for the conduct of such interstate or intrastate business (that is, cigarettes held for sale outside the jurisdiction of the board) without affixing the stamps required by this article. Any interstate or intrastate stock shall be kept entirely separate and apart from the Northern Virginia Cigarette Tax Board stamped stock, in such a manner as to prevent the commingling of the interstate or intrastate stock with the Northern Virginia Cigarette Tax Board stock. Any dealer or other person liable for the tax found to have had untaxed cigarettes which have been lost whether by negligence, theft or any other unaccountable loss shall be liable for and shall pay the tax due thereon.

(g)

It shall also be the duty of each dealer, or other person liable for the tax and he is hereby required, to maintain and to keep for a period of three years, not including the current calendar year, any records of cigarettes received, sold, stored, possessed, transferred or handled by him in any manner whatsoever, whether the same were stamped or unstamped, to make all of such records available for audit, inspection and examination and to make available at all reasonable times, the means, facilities and opportunity for making an audit, inspection or examination upon demand of the board. (Code 1963, Sec. 36-52; Ord. No. 4473, 1/20/07, Sec. 1)