HAR §18-245-2. Preparation and sale of stamps

The department shall prescribe, prepare, and furnish stamps of such design, specifications, denominations and quantities as may be necessary for the payment of the tax imposed by section 245- 3, HRS, and may provide for the issuance and exclusive use of stamps of a new design and forbid the use of stamps of any other design. In lieu of stamps, the department may also allow the use of other stamping indicia implemented through the use of computers or machines or any other device. [Eff 12/16/2000] (Auth: HRS §§245-23, 245-42) (Imp: HRS §245-23) TOBACCO WHOLESALER AND DEALER LICENSE §18-245-2-1 License; renewal of license; notification of change.  (a) It shall be unlawful for any person to engage in the business of a wholesaler or dealer in cigarettes or tobacco products upon which a tax is required to be paid under chapter 245, HRS, in the State without first having received a license issued by the department of taxation; provided that this rule shall not be construed to supersede any other law relating to licensing of persons in the same business. (b) The license shall be issued by the department upon application, in such form and manner as shall be required by the department, including the payment of a fee as allowed by law, and shall be renewable annually on July 1 for the twelve months ending the succeeding June 30. (c) The annual renewal fee and completed renewal application shall be submitted on or before the department’s prescribed deadline. Unless renewed, all wholesaler or dealer licenses expire at the time provided by law. (d) In the event of any change in the information provided in the application for a license or documentation provided in the application process, each licensed wholesaler or dealer shall notify the department, in writing, within ten days of the change. Notice to licensed wholesalers or dealers, as required by law, shall be deemed met if notice is sent to the address on file with the department. (e) Any person or entity that operates as a wholesaler or dealer, and also sells cigarettes or other tobacco products to consumers at retail, shall obtain a separate retail tobacco permit. [Eff 04/26/2007] (Auth: HRS §245-2) (Imp: HRS §245-13) §18-245-2-2 Notice of revocation, suspension, or declination to renew.  (a) Before the department may revoke or suspend a license or decline to renew a license, the department shall mail a notice of its intention to revoke, suspend, or decline to renew the license to the licensee at its last known address appearing in the records of the department (unless the department has been notified by the U.S. Postal Service that the address is invalid and there is no forwarding address for the licensee); provided, that this section shall not apply to automatic forfeiture based on the failure to file an application within the period provided by chapter 245 or any rule adopted under chapter 245. (b) In the event the department is unable to provide notice by mail as provided in subsection (a), the department may give notice of its intention to revoke, suspend, or decline to renew a license by publishing the notice once in each of two successive weeks (two total publications) in a newspaper of general circulation published in the HRS §245-23 HRS §245-2 HRS §245-2 CIGARETTE TAX STAMPING §18-245-2-4 245- 3 (Unofficial Compilation as of 12/31/2025) State; provided, that this section shall not apply to automatic forfeiture based on the failure to file an application within the period provided by chapter 245 or any rule adopted under chapter 245. (c) The department may revoke, suspend, or decline to renew the license whenever the department finds that the applicant or licensee has failed to comply with chapter 245 or any rule adopted under chapter 245, or for any other good cause. If a person or entity whose license is revoked, suspended, or not renewed disputes the department’s actions the aggrieved party may petition the director in writing, within 60 days of the date of the notice, setting forth reasons why revocation, suspension, or declination to renew the license should not occur. (d) In the petition, the licensee may provide information, to which the department may give due consideration, regarding mitigation measures taken by the licensee to abide by the requirements of any federal, state, or county law pertaining to the sale, acquisition, possession, stamping, distribution, transportation, or importation, of cigarettes or tobacco products. (e) The department may consider single or multiple federal, state, or county violation(s) pertaining to the unlawful sale, acquisition, possession, stamping, distribution, transportation, importation, or smuggling of cigarettes, counterfeit cigarettes, counterfeit stamps, or other tobacco products in violation of federal, state, or county law in determining the appropriate action to be taken. (f) Revocation, suspension, or declination to renew a license shall have no effect on liability for payment of taxes, fees, penalties, or interest incurred or imposed.[Eff 04/26/2007] (Auth: HRS §245-2) (Imp: HRS §245-13) §18-245-2-3 Good cause to suspend, revoke, or decline to renew a wholesaler or dealer license.  (a) In addition to any other acts or conditions provided by law, the department may suspend or, after hearing, revoke or decline to renew any license, whenever the department finds that the applicant or licensee has failed to comply with chapter 245 or any rule adopted under chapter 245, or for any other good cause. Good cause includes instances where an applicant or licensee has: (1) Submitted a false or fraudulent application or intentionally provided a false statement in an application; (2) Possessed or displayed a false or fraudulent license or retail tobacco permit; (3) Failed to meet or maintain the conditions and requirements necessary to qualify for the granting of a license or retail tobacco permit; (4) Procured a wholesaler or dealer license or retail tobacco permit through fraud, misrepresentation, or deceit; (5) Aided and abetted a person or entity that does not possess a license or retail tobacco permit to directly or indirectly perform activities requiring a license or retail tobacco permit; (6) Instances of noncompliance, violation, or conviction of any law directly pertaining to the sale, importation, acquisition, possession, stamping, distribution, transportation, or smuggling of cigarettes, counterfeit cigarettes, counterfeit tax stamps, or other tobacco products in violation of county, state, or federal law; (7) Intentionally failed to make accessible for inspection any records of the licensee or permittee for the purpose of determining compliance with chapter 245 to any representative of the department or the attorney general; or (8) Failed to comply with applicable tax obligations. (b) In assessing whether good cause exists when considering a revocation, suspension, or declination to renew a license based upon a person’s or entity’s employee’s violation(s) of §709-908, HRS, the department may consider whether the sale of the tobacco product to the minor was an isolated incident, and if not, the extent to which the person or entity acted in reckless disregard of the risk that tobacco products would be sold to minors. (c) In determining good cause the department may consider: (1) The nature, circumstances, extent, and gravity of the violation; (2) With respect to the licensee, the degree of culpability and any history of prior compliance or prior violations of tobacco enforcement or tax laws; and (3) Such other matters as justice may require or as the department deems relevant. (d) Revocation, suspension, or declination to renew a license shall have no effect on liability for payment of taxes, fees, penalties, or interest incurred or imposed. [Eff 04/26/2007] (Auth: HRS §245-2) (Imp: HRS §245-13) §18-245-2-4 Demand for a hearing.  Any person or entity whose application for the issuance, renewal, reinstatement, or restoration of a license has been denied by the department, shall be entitled to a hearing; provided that a demand for a hearing is filed with the department within sixty days of the date of the notice informing the applicant of the denial of application, suspension, or revocation; and provided further that this section HRS §245-2 HRS §245-2 §18-245-2-5 CIGARETTE TAX STAMPING 245- 4 (Unofficial Compilation as of 12/31/2025) shall not apply to a denial based on the failure to file an application within the period provided by chapter 245 or any rule adopted under chapter 245. [Eff 04/26/2007] (Auth: HRS §245-2) (Imp: HRS §245-13) §18-245-2-5 Proceedings upon demand for hearing on action taken relating to a wholesaler or dealer license.  (a) If a demand for a hearing is filed within the time prescribed, the department shall order a hearing pursuant to procedures complying with chapters 91 and 245, HRS. (b) For purposes of proceedings relating to action taken upon a tobacco wholesaler or dealer license, the director shall conduct the hearings, shall render the decision, and shall issue such orders and take such actions as may be required; provided that the director may designate an agent who shall be the presiding officer, conduct the hearings, and make recommendations in writing to the director, which recommendations shall include recommendations as to findings of fact and conclusions of law. The director shall then render the decision as to findings of fact and conclusions of law and shall issue such orders and take such actions as may be further required. (c) In all such proceedings, the director’s authorized agent shall have the power to give notice of the hearing, arrange for the administration of oaths, examine witnesses, certify official acts, rule on offers of proof, receive relevant evidence, regulate the course and conduct of the hearing, including regulating the manner of any examination of a witness to prevent harassment or intimidation and ordering the removal of disruptive individuals, and perform such other duties necessary for the proper conduct of the hearing. (d) The director’s authorized agent shall take a verbatim record of the evidence presented at any hearing by any reasonable means within the agent’s discretion, including an audio recording. The director’s authorized agent may engage the services of a stenographer, or someone similarly skilled, to take a verbatim record of evidence presented at any hearing. Any party may request a certified transcript of the proceedings. The party making the request for the services of a stenographer or certified copies of the hearing shall be responsible for the relevant fees. (e) A director’s authorized agent shall be disqualified from deciding a contested matter if the agent: (1) Has a substantial financial interest, as defined In section 84-3, HRS, in a business or other undertaking that will be directly affected by the decision of the contested case; (2) Is related within the third degree by blood or marriage to any party to the proceeding or any party’s representative or attorney; (3) Has participated in the investigation preceding the institution of the contested case proceedings or has participated in the development of the evidence to be introduced in the hearing; or (4) Has a personal bias or prejudice concerning a party that will prevent a fair and impartial decision involving that party. (f) If a director’s authorized agent is absent or otherwise unable to proceed with the agent’s duties associated with a contested case or hearing, the director may designate another representative to serve as a substituting presiding officer without abatement of the proceedings. (g) No person shall communicate with the director’s authorized agent regarding matters to be decided by the agent with the intent, or the appearance of intent, to influence the decision of the agent, unless all of the parties to the proceedings are given notice of the communication and an opportunity to also communicate. The director’s authorized agent shall disclose any ex parte communications or attempts at ex parte communications on the record and allow all parties the opportunity to respond, refute, or comment on any such communication. [Eff 04/26/2007] (Auth: HRS §245-2, HRS § 245-12) (Imp: HRS §245-13) RETAIL TOBACCO PERMIT §18-245-2.5-1 Retail tobacco permit.  (a) Beginning December 1, 2006, every person or entity engaged in the retail sale of cigarettes or other tobacco products upon which a tax is required to be paid under chapter 245, HRS, shall obtain a retail tobacco permit. (b) Beginning March 1, 2007, it shall be unlawful for any person or entity engaged in the retail sale of cigarettes or other tobacco products upon which a tax is required to be paid under chapter 245, HRS, to sell, possess, keep, acquire, distribute, or transport cigarettes or other tobacco products for retail sale unless a retail tobacco permit has been issued to the retailer under this section and the retail tobacco permit is valid and in effect. (c) The retail tobacco permit shall be issued by the department upon application by the retailer in the form and manner prescribed by the department, and the payment of any fee allowed by law. Permits shall be valid for one year, from December 1 to November 30, and renewable annually. Whenever a retail tobacco permit is defaced, destroyed, or lost, or the permittee relocates the permittee’s business, the department may issue a duplicate retail tobacco permit to the permittee for a fee, as allowed by law. (d) A separate retail tobacco permit shall be obtained for each place of business owned, controlled, or operated by a retailer. A retailer that owns or controls more than one place of business may submit a single application HRS §245-2 HRS §245-2.5 CIGARETTE TAX STAMPING §18-245-2.5-3 245- 5 (Unofficial Compilation as of 12/31/2025) for more than one retail tobacco permit. Each retail tobacco permit issued shall clearly describe the place of business where the operation of the business is conducted. (e) Any person or entity that operates as a dealer or wholesaler and also sells cigarettes or other tobacco products to consumers at retail shall acquire a separate retail tobacco permit. (f) A retail tobacco permit shall be nonassignable and nontransferable from one person or entity to another person or entity. A retail tobacco permit may be transferred from one business location to another business location after an application has been filed with the department requesting the transfer and approval has been obtained from the department. (g) A retail tobacco permit issued under this section shall be displayed at all times in a conspicuous place at the place of business requiring the retail tobacco permit. (h) Any sales of cigarettes or tobacco products made through a cigarette or tobacco product vending machine are subject to the terms, conditions, and penalties of this chapter. A retail tobacco permit need not be displayed on a cigarette or tobacco product vending machine if the retail tobacco permit holder is the owner of the cigarette or tobacco product vending machine and the cigarette or tobacco product vending machine is operated at the location described in the retail tobacco permit. (i) A vehicle from which cigarettes or tobacco products are sold is considered a place of business and requires a retail tobacco permit. Retail tobacco permits for a vehicle shall be issued bearing a specific motor vehicle identification number and are valid only when physically carried in the vehicle having the corresponding motor vehicle identification number. Retail tobacco permits for vehicles shall not be moved from one vehicle to another. [Eff 04/26/2007] (Auth: HRS §245-2.5) (Imp: HRS §245-13) §18-245-2.5-2 Renewal of retail tobacco permit; notification of change.  (a) The annual renewal fee and completed renewal application shall be submitted on or before the department’s prescribed deadline. Unless renewed, all retail tobacco permits expire at the time provided by law. (b) In the event of any change in the information provided in the application for a retail tobacco permit, or documentation provided in the application process, each retail permit holder shall notify the department, in writing, within ten days of the change. Notice to retail permit holders, as required by law, shall be deemed met if notice is sent to the address on file with the department. [Eff 04/26/2007] (Auth: HRS §245-2.5) (Imp: HRS §245-13) §18-245-2.5-3 Notice of revocation, suspension, or declination to renew a retail tobacco permit.  (a) Before the department may revoke or suspend a retail tobacco permit or decline to renew a retail tobacco permit, the department shall mail its notice of intention to revoke, suspend, or decline to renew the retail tobacco permit to the permittee at its last known address appearing in the records of the department (unless the department has been notified by the U.S. Postal Service that the address is invalid and there is no forwarding address for the licensee or permittee); provided, that this section shall not apply to the automatic forfeiture based on the failure to file an application within the period provided by chapter 245 or any rule adopted under chapter 245. (b) In the event the department is unable to provide notice by mail as provided in subsection (a), the department may give notice of its intention to revoke, suspend, or decline to renew a retail tobacco permit by publishing the notice once in each of two successive weeks (two total publications) in a newspaper of general circulation published in the State); provided, that this section shall not apply to the automatic forfeiture based on the failure to file an application within the period provided by chapter 245 or any rule adopted under chapter 245. (c) The department may revoke, suspend, or decline to renew the retail tobacco permit whenever the department finds that the applicant or permittee has failed to comply with chapter 245 or any rule adopted under chapter 245, or for any other good cause. If a person or entity whose retail tobacco permit is revoked, suspended, or not renewed disputes the department’s actions the aggrieved party may petition the director in writing, within 60 days of the date of the notice, setting forth reasons why revocation, suspension, or declination to renew the retail tobacco permit should not occur. (d) In the petition, the permittee may provide information, to which the department may give due consideration, regarding mitigation measures taken by the permittee to abide by the requirements of any federal, state, or county law pertaining to the sale, acquisition, possession, stamping, distribution, transportation, or importation, of cigarettes or tobacco products. (e) The department may consider single or multiple federal, state, or county violation(s) pertaining to the unlawful sale, acquisition, possession, stamping, distribution, transportation, importation, or smuggling of cigarettes, counterfeit cigarettes, counterfeit stamps, or other tobacco products in violation of federal, state, or county law in determining the appropriate action to be taken. (f) Revocation, suspension, or declination to renew a retail tobacco permit shall have no effect on liability for payment of taxes, fees, penalties, or interest incurred or imposed. [Eff 04/26/2007] (Auth: HRS §245-2.5) (Imp: HRS §245-13) HRS §245-2.5 HRS §245-2.5 §18-245-2.5-4 CIGARETTE TAX STAMPING 245- 6 (Unofficial Compilation as of 12/31/2025) §18-245-2.5-4 Good cause to suspend, revoke, or decline to renew a retail tobacco permit.  (a) In addition to any other acts or conditions provided by law, the department may suspend or, after hearing, revoke or decline to renew any retail tobacco permit whenever the department finds that the applicant or permittee has failed to comply with chapter 245 or any rule adopted under chapter 245, or for any other good cause. Good cause includes instances where an applicant, or permittee has: (1) Submitted a false or fraudulent application or intentionally provided a false statement in an application; (2) Possessed or displayed a false or fraudulent license or retail tobacco permit; (3) Failed to meet or maintain the conditions and requirements necessary to qualify for the granting of a license or retail tobacco permit; (4) Procured a wholesaler or dealer license or retail tobacco permit through fraud, misrepresentation, or deceit; (5) Aided and abetted a person or entity that does not possess a license or retail tobacco permit to directly or indirectly perform activities requiring a license or retail tobacco permit; (6) Instances of noncompliance, violation, or conviction of any law directly pertaining to the sale, importation, acquisition, possession, stamping, distribution, transportation, or smuggling of cigarettes, counterfeit cigarettes, counterfeit tax stamps, or other tobacco products in violation of county, state, or federal law; (7) Intentionally failed to make accessible for inspection any records of the licensee or permittee for the purpose of determining compliance with chapter 245 to any representative of the department or the attorney general; or (8) Failed to comply with applicable tax obligations. (b) In assessing whether good cause exists when considering a revocation, suspension, or declination to renew a retail tobacco permit based upon a person’s or entity’s employee’s violation(s) of §709-908, HRS, the department may consider whether the sale of the tobacco product to the minor was an isolated incident, and if not, the extent to which the person or entity acted in reckless disregard of the risk that tobacco products would be sold to minors. (c) In determining “good cause” the department may consider: (1) The nature, circumstances, extent, and gravity of the violation; (2) With respect to the permittee the degree of culpability and any history of prior compliance or prior violations; and (3) Such other matters as justice may require or as the department deems relevant. (d) Revocation, suspension, or declination to renew a retail tobacco permit shall have no effect on liability for payment of taxes, fees, penalties, or interest incurred or imposed. [Eff 04/26/2007] (Auth: HRS §245-2.5) (Imp: HRS §245-13) §18-245-2.5-5 Demand for a hearing.  Any person or entity whose application for the issuance, renewal, reinstatement, or restoration of a retail tobacco permit has been denied by the department, shall be entitled to a hearing; provided that a demand for a hearing is filed with the department within sixty days of the date of the notice informing the applicant of the denial of application, suspension, or revocation; and provided further that this section shall not apply to a denial based on the failure to file an application within the period provided by chapter 245 or any rule adopted under chapter 245. [Eff 04/26/2007] (Auth: HRS §245-2.5) (Imp: HRS §245-13) §18-245-2.5-6 Proceedings upon demand for hearing on action taken relating to a tobacco retail permit.  (a) If a demand for a hearing is filed within the time prescribed, the department shall order a hearing pursuant to procedures complying with chapters 91 and 245, HRS. (b) For purposes of proceedings relating to action taken upon a retail tobacco permit, the director shall conduct the hearings, shall render the decision, and shall issue such orders and take such actions as may be required; provided that the director may designate an agent who shall be the presiding officer, conduct the hearings, and make recommendations in writing to the director, which recommendations shall include recommendations as to findings of fact and conclusions of law. The director shall then render the decision as to findings of fact and conclusions of law and shall issue such orders and take such actions as may be further required. (c) In all such proceedings, the director’s authorized agent shall have the power to give notice of the hearing, arrange for the administration of oaths, examine witnesses, certify official acts, rule on offers of proof, receive relevant evidence, regulate the course and conduct of the hearing, including regulating the manner of any examination of a witness to prevent harassment or intimidation and ordering the removal of disruptive individuals, and perform such other duties necessary for the proper conduct of the hearing. HRS §245-2.5 HRS §245-2.5 HRS §245-2.5 CIGARETTE TAX STAMPING §18-245-7 245- 7 (Unofficial Compilation as of 12/31/2025) (d) The director’s authorized agent shall take a verbatim record of the evidence presented at any hearing by any reasonable means within the agent’s discretion, including an audio recording. The director’s authorized agent may engage the services of a stenographer, or someone similarly skilled, to take a verbatim record of evidence presented at any hearing. Any party may request a certified transcript of the proceedings. The party making the request for the services of a stenographer or certified copies of the hearing shall be responsible for the relevant fees. (e) A director’s authorized agent shall be disqualified from deciding a contested matter if the agent: (1) Has a substantial financial interest, as defined in section 84-3, HRS, in a business or other undertaking that will be directly affected by the decision of the contested case; (2) Is related within the third degree by blood or marriage to any party to the proceeding or any party’s representative or attorney; (3) Has participated in the investigation preceding the institution of the contested case proceedings or has participated in the development of the evidence to be introduced in the hearing; or (4) Has a personal bias or prejudice concerning a party that will prevent a fair and impartial decision involving that party. (f) If a director’s authorized agent is absent or otherwise unable to proceed with the agent’s duties associated with a contested case or hearing, the director may designate another representative to serve as a substituting presiding officer without abatement of the proceedings. (g) No person shall communicate with the director’s authorized agent regarding matters to be decided by the agent with the intent, or the appearance of intent, to influence the decision of the agent, unless all of the parties to the proceedings are given notice of the communication and an opportunity to also communicate. The director’s authorized agent shall disclose any ex parte communications or attempts at ex parte communications on the record and allow all parties the opportunity to respond, refute, or comment on any such communication. [Eff 04/26/2007] (Auth: HRS §245-2.5, HRS § 245-12) (Imp: HRS §245-13)