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Tobacco Taxes

Cigarette Tax

The tax rate on packs of 20 cigarettes has been increased from 3 cents to 30 cents (proportionate rate for packs of 25), effective June 1, 2005.  A portion of this tax increase (1 cent) has been earmarked for the Cancer Research Fund and will be split between the University of Kentucky and the University of Louisville. 

Cigarette Tax Stamps Order Form - Form 73A404 (41K)- Updated November, 2005

Cigarette Inventory (Floor Stocks) Tax

In order to bring all inventories of cigarettes at wholesalers and in retail outlets in Kentucky up to the new tax rate, every retailer or cigarette licensee shall take a physical inventory of all cigarette packages bearing Kentucky tax stamps, and all unaffixed cigarette tax stamps possessed by them or in their control at 11:59 p.m. on May 31, 2005, and pay a one-time inventory floor tax at the rate of 27 cents per pack of 20 cigarettes (proportionate rate for packs of 25).

Vendors may establish the inventory of cigarettes in vending machines by (1) taking an actual physical inventory, (2) estimating the cigarettes in vending machines by reporting one-half of the normal fill capacity of the machines as reflected in individual inventory records maintained for vending machines, or (3) using a combination of these two methods.

Form 73A421, Cigarette Inventory Floor Tax (38K), is due on or before June 10, 2005. Taxpayers have the option to remit the payment in three equal monthly installments which are due June 10, 2005, July 10, 2005, and August 10, 2005, or to pay the tax in a one-time payment which is due on or before June 10.

Other Tobacco Products and Snuff

Other tobacco products (OTP) will be taxed at the rate of 7.5 percent of gross receipts effective August 1, 2005.  "Other tobacco products" means cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, cavendish, plug and twist tobacco, fine-cut, and other chewing tobacco, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco prepared in a manner to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing or smoking but does not include cigarettes as defined in subsection (5) of this section,or snuff.

Snuff will be taxed at the rate of 9.5 cents per unit (1.5 ounces).  The term “snuff” means any finely cut, ground, or powdered tobacco that is not intended to be smoked.  “Snuff” includes “moist snuff” sometimes referred to as “roll snuff” including the long cut and fine-cut varieties.  Any smokeless tobacco product similar in composition and makeup to snuff shall be taxed at the rates applicable to snuff.

Other tobacco products and snuff will be reported on Monthly Report of Other Tobacco Products and Snuff - Form 73A422 (28K).  The due date of the return is the 20th day of the month following the month in which the transactions occur. 

Questions can be directed to the Excise Tax Section, 200 Fair Oaks Lane, Frankfort KY  40620, (502) 564-6823.

 

Last Updated 1/12/2006
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