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Alaska Cigarette and Tobacco Products Tax

License Application

Vending Machine Operator is a person who imports or ac-

Instructions

quires cigarettes in the state, upon which the tax has not been

paid, and distributes them through vending machines.

License Required

Wholesaler-Disbributor is a person outside of the state who

sells cigarettes into the state and agrees to pay the cigarette and

No person shall import, manufacture, sell, purchase, possess

tobacco products tax imposed under AS 43.50.

or acquire cigarettes as a manufacturer, distributor, direct-buy-

ing retailer, vending machine operator, or buyer without first

Tobacco Products Distributor is a person who brings, or

having obtained the appropriate license. In addition, no per-

causes to be brought, a tobacco product into the state from

son shall distribute any tobacco product without first having

outside the state for sale; makes, manufactures, or fabricates

obtained the appropriate license.

a tobacco product in the state for sale in the state; or ships,

or transports a tobacco product to a retailer in the state for

Businesses located out of state that wish to sell cigarettes and

sale by the retailer. If you import cigarettes as well as tobacco

tobacco products into the state and pay the tax imposed under

products, you only need to apply for the appropriate cigarette

AS 43.50, may apply for a cigarette wholesaler-distributor li-

license.

cense or a tobacco distributor license.

Tax Imposed

Please be advised that by applying for a license authorizing the

sale of cigarettes, you are agreeing to purchase and affix ciga-

There is an excise tax of 100 mills on each cigarette ($2.00 per

rette tax stamps, or designate a third party to do so on your

pack of 20) imported or acquired in Alaska. The cigarette tax

behalf, as the means of paying the state excise tax.

must be paid through the purchase of cigarette tax stamps. Use

Form 0405-620 to purchase cigarette tax stamps. Taxpayers

Caution: A person who fails to obtain a cigarette license prior

are entitled to a discount of 3% on the first $1,000,000 and

to importing cigarettes into the state is subject to a penalty of

2% on the next $1,000,000 of cigarette tax stamps purchased

100% of the tax due on the cigarettes in addition to the tax.

in a calendar year. A tax is levied on tobacco products at the

Definition of License Types

rate of 75% of the wholesale price. Taxpayers may deduct 0.4

percent (.004) of the total tobacco products tax to cover the

Buyer is a person who imports or acquires cigarettes for the

expense of collecting and remitting the tobacco products tax.

person’s own consumption from any source other than a man-

Other Definitions

ufacturer, distributor, direct-buying retailer, retailer, or whole-

saler-distributor.

Cigarette means a roll for smoking of any size or shape, made

wholly or partly of tobacco whether the tobacco is flavored,

Direct-Buying Retailer is a person who is engaged in the sale

adulterated, or mixed with another ingredient, if the wrapper

of cigarettes at retail in the state, and who brings, or causes to

or cover of the roll is made of paper or a material other than

be brought, cigarettes into the state.

tobacco.

Cigarette Distributor a person who brings cigarettes, or has cig-

Tobacco Products include the following: cigars; cheroots;

arettes brought into the state, and who sells or distributes at least

perique; snuff and snuff flour; smoking tobacco, including

75% of the cigarettes to others for resale in the state. Tax is lev-

ied when cigarettes are first imported or acquired in the state.

Manufacturer is a person who makes, fashions, or produces

cigarettes for sale to distributors or other persons.

Form 0405-520 instructions 05/07 • page 1

Form 0405-520 - Alaska Cigarette And Tobacco Products Tax License Application Instructions

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