Oregon cigarette taxes
The cigarette tax program |
has been taxed in Oregon since 1966, but not everyone is paying the
tax. The Department of Revenue (DOR) has a team of agents that contact
retailers and distributors of cigarettes and other tobacco products. The
- Inspect tobacco products and invoices;
- Ensure the proper cigarette taxes are being paid;
- Explain the state's cigarette tax laws; and
- Educate and assist retailers so they can comply with state cigarette tax laws.
Cigarette tax revenues fund programs for Oregonians
Cigarette taxes are used to fund many programs for Oregonians:
- Police and fire services;
- Parks and other public services;
- The Oregon Health Plan;
- Senior citizens transportation services; and
- Tobacco use reduction.
Cigarette tax distribution 2014
|Oregon Health Plan
|Tobacco use reduction act
Every pack of cigarettes sold in Oregon must have an Oregon tax stamp. Oregon-licensed cigarette distributors purchase the tax stamps from the Oregon Department of Revenue.
"Cigarette" means any roll for smoking, made wholly of tobacco, that has a wrapper made of paper or other substance not containing tobacco.
The definition of "cigarette" changed January 1, 2002
A product is classified as a cigarette if:
Under the 2002 definition, rolls of tobacco-wrapped product are classified as "other tobacco products" even though 1,000 of the units weigh less than three pounds.
- The seller offers it as a cigarette.
- The consumer purchases it as a cigarette.
The new definition conforms with the Master Tobacco Settlement agreement. For more information, go to www.naag.org.
|Reporting "cigarette activity" required|
Those not licensed to distribute cigarettes in Oregon but who engage in "cigarette activity" here are required to file quarterly reports. In general, "cigarette activity" refers to shipping, storing, or repackaging the product in Oregon before it is shipped out of state.
The owner of the product must report shipments that are made into and out of Oregon, the dates, the source, and the destination of the shipments.
You do not need to file reports if you merely handle cigarettes. For example, transporters or owners of storage facilities are not required to file reports unless they also own the cigarettes. A transporter who has received the proper permits from the Oregon Department of Transportation and who merely moves cigarettes through the state in a continuous process is not required to file a report.
|What law governs cigarette tax?|
|For a complete statement of the law, see Oregon Revised Statutes (ORS) Chapter 323. |
|The current tax rate is $1.31 per stamp for a pack of 20 cigarettes. |
|Who must pay the tax?|
|Any individual or business that obtains a cigarette product with the intent to distribute, sell, or purchase it for individual use in Oregon is responsible for paying the tax to the Oregon Department of Revenue. This includes cigarette distributors, wholesale cigarette manufacturers, cigarette manufacturers, and consumers. |
|A cigarette distributor/wholesaler must obtain an Oregon Cigarette Distributor’s License before obtaining and purchasing Oregon tax stamps and distributing cigarettes in Oregon. The licensing process is: |
- The distributor and wholesaler must submit a license application to the Oregon Department of Revenue.
- After the department approves the application, the department will issue a license. The license certifies that the licensee is authorized to distribute cigarettes at a specified location.
- The distributor and wholesaler must display the license where it can be easily seen at the distributor’s business location.
- The distributor must submit a Cigarette Tax Signature Form. On the form, you must include the names and signatures of individuals who are authorized to purchase and/or receive cigarette tax stamps on behalf of the distributor.
- The distributor must designate the method of tax stamp shipment and provide their billing number and the courier’s name.
Distributors must be licensed by the Department of Revenue to purchase Oregon tax stamps. The state requires that licensed cigarette distributors must:
- File a quarterly Reconciliation Report with supporting schedules.
- Purchase all tax stamps directly from the Oregon Department of Revenue by submitting a cigarette tax stamp order request.
- Affix an appropriate tax stamp to each package of cigarettes prior to distributing in Oregon.
- Keep copies of all documents for their records.
Cigarette manufacturers who distribute cigarettes in Oregon as gifts or promotions must pay the tax on the cigarette products. Manufacturers must file an Oregon Tax Report for Non-exempt Cigarettes each month that a distribution occurs.
Every manufacturer distributing cigarettes in Oregon to someone other than an Oregon licensed distributor is required to deliver a statement with each shipment. The statement must contain prescribed information. The manufacturer must provide the Department of Revenue a copy within 10 days.
Individuals in Oregon who purchase unstamped cigarettes via the internet or from some other source are responsible for paying the cigarette tax on products purchased. Individuals must file an Oregon Cigarette Consumer's Monthly Tax Return (Form 514) to report all purchases of unstamped cigarettes. Tax Form 514 is available online or by calling 503-945-8120.
Retailers who sell cigarette products are required to comply with cigarette tax laws by possessing and selling only Oregon-stamped cigarette packs.
Transporters must apply for a Permit for Transportation of Unstamped Cigarettes from the Department of Revenue to possess, acquire for transportation, or transport untaxed cigarettes in Oregon. Each transporter must carry the permit, the invoices or bills of lading covering the shipment, and other prescribed information in the vehicle during transport.
Every distributor and every person dealing in, transporting, or storing cigarettes in Oregon must keep all pertinent records and returns for five years.
|Method of payment|
|Oregon-licensed distributors pay the tax by purchasing tax stamps. Payment may be made at the time of purchase, by approved payment deferral, or by electronic funds transfer (EFT) to the Oregon Department of Revenue. |
For taxpayers other than licensed distributors, when the tax is not paid through the use of stamps, the tax is due on the 20th of the month following the month in which the distribution occurs.
|Distribution of tax|
|The money received by the Department of Revenue is paid to the State Treasury. It is then distributed to the Oregon Health Plan, General Fund, Tobacco Usage Reduction Account, Elderly and Disabled Special Transportation Fund, and cities and counties. |
|Penalty and interest|
|Violations of the cigarette tax law may be subject to a civil penalty of up to $1,000. Penalties of up to $100,000 may be assessed against persons who are convicted of willful violations committed with the intent to defeat or evade the tax. |
If a report or return and payment of tax is not received by the due date, a penalty will be charged equal to 5 percent of the amount due. If the amount due is not paid within three months, an additional penalty of 20 percent will be charged.
Interest will be added to any unpaid amount, figured from the time the tax becomes due. Interest will be at the rate established under Oregon law for each month or fraction of a month.
|Contact the cigarette tax program|
1-866-840-2740 (toll-free from Oregon prefix)
||Oregon Department of Revenue|
Tobacco Compliance Unit
955 Center Street NE
Salem, OR 97301-2555