Cigarette tax paid by wholesaler on cigarettes sold by him and later returned may be refunded to wholesaler in certain circumstances.

CIGARETTE TAX: Cigarette tax paid by whole- saler on cigarettes sold by him and later returned may be refunded to wholesaler in cer- tain circumstances . Opn . No . 335 (1961) No. 15 (1962 ) February 16, 1962 J.1r. R. B. Browning, Superviaor aigarette Tax Diviaion Department o£ Revenue Jefferson City. U.aaouri Dear Mr. Browning% Thia refera to your letter requeating an opinion con- cerning cigarette tax refund•• vhi.ch letter read• aa fol- loMal •I ehould like to requeat an opinion from your department aa to the effect the inaertion of paragraph ~ ot Sec- tion 149.020 will haTe on the previous ruling from your office relative to refu.nda.• The prior opinion of thia office to which you refer ia one addreaaed to you under date of NoTember 17, l95B, in which we concluded as tollowal •It is the opinion of this office that no refund of the State cigarette tax may be made to a wholeaaler with respect to cigarettes which have been sold by the wholesaler within the State of Mlaaouri and which are subse- quently returned to him.• The statutory proviaion for the refund of cigarette taxea, Mhich has not been arnmded aince the date of our prior opinion, now appears 1n Section 149.040, RSKo 1959, which reada •• tollowal -whenever any cigarette• upon which atamps have been placed have been aold or ahipped into another state for •ale or uae there or haTe become Mr. R. B. Browning unfit for use and eonaumption or unsalable • or haTe been destroyed, the wholeaaler ahall be entitle4 to a refund of the actual amount of the ~ J*1d with respect to such cigarettes. If the cl1 v1a1on ia aatiatled that any wholeaaler 1a enti t1e4 to a refund !t ah•ll ie.ue to the ~oleaaler stamp• of aufficient Y&lue to cover the re- tund. The di via ion -*7 recleem unueed atampa lawfully in the poaaeaaion of any person; and ma7 i react-ibe necuaary rule• and regu- ationa concerning refunda and re- demptions. • 2 ~o"ion 149.020, UKo Cwa. Supp. 1961, reads in part as followas •1. A tax ahall be paid on the eala ot cigarette• made of tobaeeo, or anr eublt1tute tor tobacco. of two mi 1a per cigarette. •2. ThU tax ahall be paid by a£- fl.xing at&blpa in the mattlter and at the tim• set. £orth in this chapter. The ataapa aball be affixed to each indivi4ual pa~kage ot oif·aret~es by ~he person ldto .tirat ael a the cig•natt.es vi thin thia at•t•. All eigar•ttea mu•t be stamped before being aold in thia state. * * * • * • • •4. IYery peraon required to ,.Y thia tax shall edd the .mount of the tax to the eue.a pric• of the cigarettes. 1 t being the purpoae and intent of thia law that the tax ia 1n tact a leyY on the eonawner or ua•r 1d:tb the person first selling the cigarettes acting merelJ aa an agent of the state tor the payment and coll~tlon of the tax to the •tate.• 1~. a. B. Browning 3 •s noted in your Letter, paragraph 4 ••• added to Section 149.020 by an amendment enacted in 1961; and your queation ia whether the addition Qf aaid P•ragraph affects our prior opitd.on concerning retunda. fbe only other am.ndment to the above quoted provtaiona of Section 149.020 subsequent to our prior opinion waa the increase in the rate ot tax from one mill to two mille per cigarette. In our prior opinion we stated in part aa followal •By the expreaa terms of section 149.040, retut.da ma.y be made only to wholesalers 1 and the reasonable construction of the words 'the wholesaler•, in the context in which the! appear in that section, ia that the who eaaler entitled to a refund is the one who paid the tax by affixing stamps to the cigarettes with respect to which the retund ia sought. Thia ia in accordance with the uaual meaning of the term •refund', namely, that it is a pay- ment of something beck to the party from whom it was received. * * * • • • * "One ot the def~itions given for the term 'refund' 1n the above quotation ie, •to pay back by the party who has received tt, to the party who has paid it, money uhich ought not t o have been paid.' It is believed that it ia in thia sanae that provision is oade for the retundo ot the cigarette tax. •section 11.9.020! quoted above, provide• that the tax aha 1 be paid by affixing &t-ampa and that the atampa shall be affixed by the person who first aells the cigarettes within t hia state. In oth~r words the £irat sale o! cigarettes within th!e atate is a taxable transaction and the tax is due and payable through the affixing ot stamps at the time of such firat sale. "In normal operation, 1n anticipation ot eales which will be made, it ia neceaaary Mr- R.B. Browning tor wholesalers to at!ix atampa to cigar- ettes which may never become the subject ot taxable sales because after af'f1:x1ng the stamps the wholesaler may sell the cigarettes outaide the State ot Mlaaour1 or, prior to aale by the wholeaaler, the cigarettes may become unfit !or uae and con8Wilption or unealable or be deatrored. In auch eaaes, by a£f1Xing the atampa, the wholesaler will have paid a tax which ought not to have been paid; and the statutory proTiaiona for retunda make it poaaible tor him to obtain reimburaem.ent tor the tax which he baa paid but clid not owe. That, we believe, ia the aol\e pur- pose and eftect of the provision tor refunds. After the cigarettes have once been aold by the wholeaaler within the State of Miaaouri, there baa been a taxable transaction and there ia nothing to be refunded which ougbt not to have been paid.• We atill are of the opinion that a retund can be .. de onlr to the wholesaler who paid the tax. Alao, the law ia atill clear that the tax muat be pa14 ~oy the peraon who firat aella the cigarettea within this atate. However, by the addition or paragraph 4 to Section 149.020 the law nov provides that the peraon paying the tax ahail add the tax to the aalea price ot the cigarettes, and that 1 t ia the intent that the tax shall be a leTJ on the con~er or uaer, with the first seller acting as an agent of the atate in paying and collecting the tax. In view of thia change in law, 1 t 1a believed that, where eigarettea are returned to the wholesaler who paid the tax and the wholesaler ref\mds the tax to the peraon returning the cigarettea, tne wholesaler ia 1n substan- tially the same position as though he had not aold the cigarettes and should be entitled to a re!Und ot the tax paid by him it the cigarettes become unfit for uae or con- .umption or unsalable or are destrored. The wholesaler will have paid a tax which the lav contemplates ahall be •paeeed on• to the ultimate conaumer but, in the circum- etancea just stated there can be no recovery or the tax by the who~esaler through a sale or the cigarettes. Mr. a. B. Browning 5 COIGLUIIOM It ia the opinion of thi·s otfice tha1!, where cigar- ettes are returned to the wholesaler who nr.-t aold the cigarettes in thia atate and who paid the state cigarette tax thereon and the wholesale~ retunda the cigarette tax to the peraon returning the cigarettes, the tax paid by the wholeaaler on 8UCh cigarettea may be refunded to him by the atate if the cigarettee become unfit tor uae and consumption or unaalable or are de.troyed. The foregoing opinion, which I herebr approve, was prepared by aaaiatant, John c. Baumann. JCB le Very truly your a, THOMAS l. BAGLI'i'ON Attorney Gueral