Fillable Form Rpd-41278 - Cigarette Stamp Inventory Tax Return (Page 2 of 2) in pdf

STATE OF NEW MEXICO - TAXATION AND REVENUE DEPARTMENT

Cigarette Tax Increases July 1, 2010

Inventory Required on June 30, 2010

Effective July 1, 2010, New Mexico’s tax on a pack of cigarettes is increasing by $0.75 cents if

packaged in lots of 20, 10 or 5 cigarettes, and by $0.9375 cents if packaged in lots of 25 ciga-

rettes. The new tax rate is $1.66 for a package or container of 5, 10 or 20 cigarettes, and $2.075

for a package or container of 25 cigarettes. This change comes as a result of House Bill 3, which

was passed in the Special Session of the 2010 Legislature and signed into law by Governor Bill

Richardson.

At the close of business on June 30, 2010, distributors licensed to affix stamps to cigarettes must

take an inventory of cigarette stamps on hand – whether or not the stamps are affixed to cigarette

packages - and submit the count with payment of the difference between the old and the new tax

on or before August 25, 2010. Cigarette stamps on hand include all New Mexico cigarette stamps

affixed or unaffixed to packages of cigarettes regardless of where they are located. You must

include the total number of cigarette stamps to which you retain legal ownership at the close of

business on June 30, 2010, whether in transit, stored at another location, or in your possession.

The Department will audit inventory tax payments. It is incumbent upon the taxpayer to keep de-

tailed records of purchases, sales and ownership of stamps.

The required inventory report form is RPD-41278, “Cigarette Stamp Inventory Tax Return.” It is

available on the Taxation and Revenue Department’s web site at Click on

“Forms” and then on “Tobacco Products Tax Forms”.

The inventory and tax payment requirement falls on distributors who are licensed according to the

Cigarette Tax Act to sell or distribute cigarettes in New Mexico. Persons who purchase stamps on

account and must therefore furnish cigarette surety bonds should expect the bond amount to in-

crease in proportion to the tax increase. The amount of the bond is 1.5 times the average monthly

stamp order.

Pre-ordering the New Tax-credit Stamp

To give distributors time to prepare for July 1, 2010, a revised Form RPD-41158, Purchase Order

for New Mexico Cigarette Stamps, is released and the new tax-credit stamps can be ordered for

shipment or pick-up beginning June 21, 2010. You may pre-order the new tax-credit stamps, how-

ever you may not sell or distribute packages of cigarettes with the new tax-credit stamp affixed

until July 1, 2010. Any new tax-credit stamps obtained from the Department must be on-hand

and unaffixed on June 30, 2010. At the close of business on June 30, 2010, after taking inventory

of stamps on hand for purposes of Form RPD-41278, Cigarette Inventory Tax Return,* you may

affix the new tax-credit stamps to packages of cigarettes for delivery or sale to a retailer located

on land of a tribe that has imposed a qualifying tribal cigarette tax. The retailer must be a tribe or

tribal member licensed or approved by the tribe to sell cigarettes on that tribes land.

*Do not include inventory of the new tax-credit stamps on Form RPD-41278, Cigarette Inventory

Tax Return.

When completing Form RPD-41315, Cigarette Distributor’s Monthly Report, and Schedules for

report periods prior to July 1, 2010, you are not provided space to record inventories and trans-

actions for the new tax-credit stamp. You should not affix tax-credit stamps during the reporting

period of June 2010. For report periods beginning on or after July 1, 2010, you should use the new

revised forms for cigarette distributor reporting.

For additional information on the Cigarette Tax Act and the changes described above, please con-

tact Sharon Baker at (505) 827-6842, or write to the Cigarette Tax Unit at: New Mexico Taxation

and Revenue Department, P.O. Box 25123, Santa Fe, NM 87504-5123.

Form Rpd-41278 - Cigarette Stamp Inventory Tax Return Page 2

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