The Department of Revenue administers Tobacco Taxes on cigarettes, other tobacco products, and snuff. Tobacco Tax laws are located in Chapter 138
of the Kentucky Revised Statutes.
2018 Inventory Floor Tax for Cigarettes
House Bill 487 was recently passed by the General Assembly. As part of the bill the tax rate for cigarettes was increased from $0.60 to $1.10 per 20 cigarettes and a proportionate rate for packs of 25s as of July 1, 2018.
Every retailer or cigarette licensee with cigarette inventories 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 June 30, 2018, and pay an inventory floor tax at the rate of 50 cents per pack of 20 cigarettes (proportionate rate for packs of 25). The filing and first payment are due by July 10, 2018. If you choose to do installment payments, then the remaining proportionate amounts will be due on August 10, 2018 and the last on September 10, 2018.
You must file online for Inventory Floor Tax for Cigarettes. (The Google Chrome web browser is recommended.)
How to Register
Cigarette and Tobacco Licenses are obtained online through the
Kentucky One Stop Business Portal
The distribution of untaxed tobacco products without first obtaining a license from the Department of Revenue is prohibited.
Retailers are prohibited from buying untaxed tobacco products unless the retailer is a licensed retail distributor who directly pays the applicable excise tax on its purchase price of tobacco products to the Department of Revenue.
Licensees (December 4, 2018)
The Department of Revenue will soon have electronic filing available through the KY Business One Stop Portal. We have information to assist you in creating the XML file layout necessary in creating your tax return. Please see the EDI Guide below as well as the technology guides containing examples of the file layout.