Virginia currently imposes a cigarette excise tax (Code of Virginia §58.1-1000 et seq.) in the amount of 1.5 cents per cigarette. This equates to 30-cents per pack for a standard pack of 20 cigarettes, or $3.00 per carton. Payment of the tax is evidenced by affixing a Virginia Revenue Stamp (cigarette stamp) to each pack of cigarettes.
Only suppliers who have applied for and received a Stamping Agent Permit from the Virginia Tax may purchase Virginia cigarette stamps. We are the only authorized dealer of cigarette stamps, and the stamps may neither be resold by, returned to, transferred to or purchased from, parties other than us.
Every stamping agent who sells, stores, or receives cigarettes for the purpose of distribution to any person, firm, corporation, or association within Virginia must pay the state excise tax on such cigarettes by affixing the stamps to the cigarette packs. There are only a few exceptions to this requirement, which are outlined under Exemptions to Stamping Requirements.
Other than exempt cigarettes, all cigarettes for sale in Virginia should have the revenue stamp affixed to each pack. Persons in possession of unstamped cigarettes are liable for the payment of the excise tax as well as a penalty of $2.50 per pack, up to $250,000.
Local Cigarette Taxes
Several Virginia localities levy local cigarette taxes. The local Commissioner of Revenue should be contacted directly for information on local tax rates and stamping requirements.
The Northern Virginia Cigarette Tax Board
The Northern Virginia Cigarette Tax Board (NVCTB) administers local cigarette taxes for the following 16 Northern Virginia localities: Fairfax County, City of Fairfax, Alexandria, Falls Church, Manassas, Lovettsville, Hillsboro, Middleburg, Haymarket, Dumfries, Purcellville, Leesburg, Warrenton, Clifton, Herndon and Vienna.
Wholesalers are not authorized to sell cigarettes into the jurisdictions covered by the NVCTB until such time as they have obtained a Virginia stamping permit and have been approved to do so by the Board.
A special "dual" tax stamp must be affixed to cigarette packs intended for sale in NVCTB communities. Cigarette distributors, retailers and consumers should be aware that local ordinances permit the NVCTB to seize cigarettes and issue fines against anyone found possessing or transporting unstamped or improperly stamped cigarettes within communities in their jurisdiction.
Although roll-your-own (RYO) tobacco is subject to the cigarette tax, the cigarette tax on RYO is administered in the same manner as the Tobacco Products Tax. Roll-your-own tobacco means any tobacco labeled for, or suitable for, use and purchase by consumers as tobacco for making cigarettes for personal consumption.
Roll-Your-Own Cigarette Machines
Some tobacco shops and cigarette retailers may have installed "self-serve" cigarette machines that allow the customer to make their own cigarettes. Typically, the customer can purchase tobacco and cigarette tubes and then use the store's machine to make the cigarettes. Establishments that have these machines are considered by Federal agencies to be cigarette manufacturers for tax and enforcement purposes. Store owners possessing or considering purchasing these machines should contact the Virginia Office of the Attorney General for further guidance regarding the use of these machines.
The 2012 General Assembly enacted a law, effective July 1, 2012 that provides for any person who maintains operates, or rents a "roll-your-own cigarette machine" at a retail establishment that enables a person produce cigarettes to be deemed a manufacturer of cigarettes. The resulting cigarette products are subject to state and local cigarette taxes, as well as Master Settlement Agreement (MSA) payment requirements, and also reduced cigarette ignition propensity requirements.
A retail establishment may purchase tobacco upon which tax has not been paid and which has not met the requirements of the Master Settlement Agreement statutes provided that i) the tobacco is sold only to consumers for use in making cigarettes on the roll-your-own cigarette machines, ii) the retail establishment pays the taxes due on such cigarettes, and iii) the retail establishment complies with the Master Settlement Agreement statutes.
The packaging of the cigarettes must also be marked as being compliant with fire safety standards and statements meeting federal requirements related to the health effects of smoking.
The sale and use of cigarette rolling machines purchased for personal use by an individual consumer to make cigarettes for personal consumption and not for rental or use by other consumers is not be subject to these provisions.
Store owners possessing or considering purchasing these machines should contact the Virginia Office of the Attorney General for further guidance regarding the legal requirements of using of these machines.
It is unlawful for any person to stamp or offer for sale a package of cigarettes of a manufacturer or brand family that is not included in the Tobacco Directory maintained by the Virginia Office of the Attorney General.
Cigarette wholesalers, retailers and consumers should be aware that products known as and referred to as bidis or beedies are considered to be cigarettes. As such, the brands must be approved by the Office of the Attorney General in order to be sold legally in Virginia.
The purchase of or the distribution into Virginia of cigarettes that are intended to be sold outside the United States or would otherwise violate federal law if sold in Virginia is prohibited and is a Class 5 felony. In addition, we may assess a civil penalty of up to the greater of 500% of the retail value of the cigarettes involved or $5,000. Such cigarettes are also subject to seizure by TAX or other enforcement agencies. Packages of these cigarettes are typically marked with wording such as "US Tax Exempt", "For Sale Outside US Only" or other similar wording.
Only cigarette manufacturers, cigarette wholesale distributors or retailers may be licensed as a stamping agent. To become a licensed stamping agent you must file an application, Form TT-1 Application for Cigarette Stamping Permit and Tobacco Products Tax Distributor's License, and TT-1 A Personal Data Form. There is a $600 application fee due with the application and a criminal background check will be conducted on the principal operatives of the company. Applicants should allow at least 90 days for processing of their applications and the issuance of their permits. Permits are valid for a period of three years from the date of issue.
Principal operatives requiring a criminal background check includes anyone who meets any of the following criteria: any officer, director, manager, sole proprietor, partner, member, stockholder, or any other person possessing an ownership interest of 10% or greater in the applicant entity. Background checks will also be required for anyone who exercises authority or control over the purchase, storage, sale or distribution of cigarettes or OTP, or over the compliance with any cigarette or tobacco products tax laws.
Any person who assumes any of the roles mentioned above after the initial application is filed must apply to us for a background check within thirty (30) days of assuming that role. Cigarette distributors with multiple locations must obtain a separate permit for each stamping location. There is an additional $100 fee for each background check submitted subsequent to the initial application.
All stamping agents must file a Form TT-13 (Virginia based stamping agents) or TT-14 (stamping agents based outside of Virginia) by the 20th of each month to report their cigarette stamp inventory activity and stamp usage for the prior month. Stamping agents are required to file a report even if they had no stamping activity for the month.
There is no tax payment due with the TT-13 or TT-14.
There is a $250 late filing, or non-filing, penalty for reports received after the 20th of the month. A stamping agent permit may be revoked by the Virginia Department of Taxation if more than two monthly reports are not filed, or not timely filed, within one calendar year.
Reports Required by Attorney General.
All stamping agents and Other Tobacco Products distributors selling Roll-Your-Own Tobacco are also required to file a monthly report, Form AG-1 or AG-2, with the Office of the Attorney General. Forms and additional information can be found on the Office of the Attorney General website.
Cigarette Stamp Purchases
Cigarette stamps may be purchased from us by completing Form TT-2, Order for Virginia Cigarette Tax Stamps. Present the completed form with your payment to the Fiscal Office at 1957 Westmoreland Street, Richmond, VA. Stamps are also available for purchase from the Treasurer's Office of the following localities:
- City of Bristol
- City of Culpeper
- City of Danville
- City of Fairfax
- City of Lynchburg
- City of Roanoke
- City of Waynesboro
Stamping agents are eligible for a discount on the purchase price of cigarette stamps at the rate of 2 percent of the amount charged for the stamps. Stamps may also be purchased on credit provided the stamping agent has a bond on file with us.
Stamping agents may also apply for a credit for the write off of a bad debt related to the sale of cigarettes. Only the cigarette taxes attributable to the debt being written off are eligible for this credit. To apply for the credit, file Form TT-12 and its Schedule A. Once the credit is granted, it may be applied to the cost of future cigarette stamp purchases.
Please contact the Fiscal Office at 804.367.8465 if you need more information on stamp purchases.
Exemptions to Stamping Requirement / Failure to Affix Stamps
All packs of cigarettes must be stamped prior to shipping them to either other wholesaler distributors or retail outlets.
There are only three exceptions to the stamping requirement. Cigarette packs do not have to have the Virginia cigarette stamp affixed if:
- The cigarettes are sold to a cigarette dealer who is engaged in business as a cigarette dealer in another state (and, such cigarettes are purchased for resale in another state; such cigarettes at the time of sale are properly stamped with revenue stamps authorized and issued by another state).
- The cigarettes are sold to the United States or any instrumentality thereof for the purpose of resale to and consumption by, members of the armed services (cigarettes sold directly to members of the armed forces must be stamped), and;
- Cigarettes are sold to ships regularly engaged in foreign commerce or coastwise shipping between points in Virginia and are intended for sale or consumption on those ships.
Stamping agents are subject to a penalty of up to $250,000 for failure to properly affix the required stamps. It shall be prima facie evidence of intent to defraud when the number of unstamped cigarettes is the greater of 30 packs, or 5 percent of the cigarette inventory in the place of business of such person or business. Notwithstanding these threshold limits, if the number of unstamped packs exceeds 500 packs, it shall be prima facie evidence of willful intent to defraud. Each pack not having proper stamps affixed is deemed a separate offense. We may also revoke the stamping agent's permit for non-compliance with cigarette stamping requirements.
Cigarette Retailer Requirements
Virginia does not require cigarette retailers to have a license to sell cigarettes. However, even though stamping agents are required to affix the stamps to cigarettes prior to shipping to retail outlets, every cigarette retailer is responsible for inspecting their shipments upon receipt to ensure cigarette stamps have been properly affixed. Unstamped packs should be removed from inventory and set aside for return to the cigarette supplier. We conduct regular random inspections of cigarette retailers throughout the Commonwealth. Any person who is not a stamping agent who sells, purchases, transports, receives or possesses unstamped cigarettes for the purpose of evading taxes is subject to civil penalties ranging from $2.50 per pack up to $250,000 depending on circumstances. Possession of more than 30 packs of unstamped cigarettes by any person who is not a stamping agent is presumed to be for the purpose of evading taxes. In addition, possession of 3,000 packs or less of unstamped cigarettes is a class 2 misdemeanor, and possession of over 3,000 unstamped packs is a class 6 felony.
Retailers who wish to install a "Roll-Your-Own" cigarette making machine in their store must meet several legal and tax requirements. Please review the previous section on Roll-Your-Own Machines for further details.
Individual Consumer Requirements
Consumers should be aware that all cigarette packs should have the Virginia stamp affixed regardless of where in Virginia the cigarettes were purchased. Typically, but not always, Virginia consumers come into possession of unstamped cigarettes through internet purchases. However, consumers should be aware that the purchase of illegal cigarettes by any means is prohibited. Internet sites often sell illegal cigarettes.
If you do purchase unstamped cigarettes, a Form TT-7, Consumer Cigarette Tax Return, should be completed and submitted with your cigarette tax payment to the Virginia Department of Taxation. Payment of the consumer cigarette tax does not make possession of illegal cigarettes legal.
In general, any individual having in their possession more than 3 cartons (30 packs) of unstamped cigarettes or more than 25 cartons (5,000 packs) of stamped cigarettes is considered to be engaged in cigarette trafficking. Persons other than authorized holders possessing more than 25 cartons of tax-paid cigarettes with the intent to distribute are guilty of a Class 2 misdemeanor for a first offense and guilty of a Class 1 misdemeanor for a subsequent offense. Such individuals are also subject to civil penalties up to $50,000. In addition to the penalties, such cigarettes are subject to seizure and confiscation.
An authorized holder is anyone who is a cigarette manufacturer, wholesaler dealer, licensed stamping agent, cigarette retailer or a licensed common carrier.
Tax-paid cigarettes are defined as cigarettes that either i) bear valid Virginia cigarette tax stamps or ii) were purchased outside the Commonwealth and either bear a valid tax stamp of the applicable stamp or evidence can be provided that the applicable excise taxes have been paid.
Cigarette Manufacturer Requirements
Virginia does not license cigarette manufacturers to produce or sell cigarette products in the Commonwealth. However, all manufacturers producing cigarettes in the Commonwealth, or shipping cigarettes into or within Virginia, must file a monthly report of such activities, Form TT-18. The manufacturer must identify all purchasers of cigarettes by name and address; and also state the quantities (in sticks) of cigarettes purchased by brand. This report is due on the tenth of each month following the month of purchases.
Failure to file the monthly report is a Class 2 misdemeanor. In addition, we may also impose a civil penalty of up to $5,000 for each failure to file or refusal to provide the requested information.
Manufacturers must also file their Federal PACT act report with us by the 20th of each month.
Cigarette manufacturers selling cigarettes to consumers within Virginia, whether directly or through a distributor or similar intermediary, must either A) become a participating manufacturer (PM) and perform its financial obligations under the Master Settlement Agreement or, B) be a non-participating manufacturer (NPM) and place into a qualified escrow fund by April 15 of each year such amounts as directed under the Code of Virginia §3.2-402.2.
Additional Information and Appeals
For further information on cigarette tax penalties and enforcement issues, please read Rulings of the Commissioner, PD 10-186 Cigarette Tax Guidelines.
Taxpayers may appeal cigarette tax and penalty assessments to us using the administrative appeals process as established in Code of Virginia §58.1-1821 and explained in detail in the Virginia Taxpayers Bill of Rights.
Disposition of Taxes
Revenue generated by the cigarette tax, and cigarette tax penalties is deposited into the Virginia Health Care Fund.
Cigarette Tax Forms
TT-1 Application for Permit to Purchase and Virginia Revenue Stamps
TT-1 A Schedule A: TT-1 Personal Data Form
TT-2 Order for Virginia Cigarette Tax Stamps
TT-7 Consumer Cigarette Tax Return
TT-12 Application for Cigarette Tax Credit Certificate
TT-13 Monthly Report of Resident Cigarette Wholesaler
TT-14 Monthly Report of Non-resident Cigarette Wholesaler
TT-18 Monthly Report of Cigarette Manufacturers
Publication Virginia Taxpayer Bill of Rights
Publication Rulings of the Tax Commissioner 10-186 Guidelines and Rules Related to Enforcement
Publication Virginia Tobacco Directory
AG-1 Stamping Agent's Report to OAG of NPM Cigarettes
AG-2 Stamping Agent's Report to OAG of PM Cigarettes
General Assistance, Permit or Reporting Information
Virginia Department of Taxation
P.O. Box 715
Richmond, VA 23218-0715
Stamp Purchasing Information
Virginia Department of Taxation
Virginia Tobacco Directory, Certified Brands
Office of the Attorney General
900 East Main Street
Richmond, Virginia 23219