42-1124

42-1124. Failure to affix stamps or pay or
account for tax; forfeiture of commodity; sale of forfeited
commodity; effect of seizure and sale; request for administrative
hearing; definitions

A. If the department or its authorized agents or representatives discover any
luxury subject to tax under chapter 3 of this title to which official stamps have not
been affixed as required or on which the tax has not been paid or accounted for, the
department or its agent or representative may seize and take possession of the luxury,
and it is deemed forfeited to this state. Except as provided in subsection D or E of this
section, the department shall within a reasonable time thereafter, pursuant to a notice
posted on the premises or by publication in a newspaper of general circulation in the
county where the sale is to take place, not fewer than five days before the date of sale,
offer for sale and sell the forfeited luxuries. The department shall pay the proceeds of
the sale into the state general fund. The sale shall take place in the county which is
most convenient and economical. The department need not offer any property for sale if,
in its opinion, the probable cost of sale exceeds the value of the property.

B. The seizure and sale do not relieve any person from the penalties provided for
violating this title.

C. The department of revenue may enter into an interagency agreement with the
department of transportation for the purpose of carrying out tobacco enforcement under
chapter 3 of this title at ports of entry.

D. All cigarettes that are seized for violations under this title shall be
forfeited to this state. All cigarettes that are forfeited to this state pursuant to
section 42-3210 or section 44-7111, section 6(b) shall be destroyed. If a cigarette
distributor defrauds this state by knowingly and intentionally failing to keep or make
any record, return, report or inventory pertaining to cigarettes, by refusing to pay any
luxury tax for cigarettes subject to tax under chapter 3 of this title or by attempting
to evade or defeat any requirement of this title, the cigarette distributor shall forfeit
to this state all fixtures, equipment and all other materials and personal property that
are located on the premises of the cigarette distributor. Alternatively, at the request
of the department, the cigarette distributor may be enjoined by an action commenced by
the attorney general or a county attorney in the name of the state from engaging or
continuing in any business for which a tax is imposed by this chapter until the tax has
been paid and until such person has complied with this title.

E. The department may sell or otherwise dispose of any cigarettes forfeited to this
state on such conditions as it deems most advantageous and just under the circumstances,
unless such cigarettes are forfeited pursuant to section 42-3210 or section 44-7111,
section 6(b). The department shall deposit the proceeds of any sales made pursuant to
this subsection in the state general fund.

F. The department shall give notice of the seizure and forfeiture of cigarettes
described in this section by personal service or by certified mail to all persons known
by the department to have any right, title or interest in the property. Notice shall
include a description of the cigarettes seized, the reason for the seizure and the time
and place of the seizure. The following apply to the notice under this subsection:

1. Except as provided in paragraph 2 of this subsection, the department shall post
and maintain an on-line notice of seizure and forfeiture on its web site for a period of
at least six months, beginning no later than ten business days after the date of the
personal service of the notice to a person or the date of the mailing of the notice. The
on-line notice shall display the date on which the department posts the notice to the web
site, which shall serve as the date of publication of the notice.

2. An on-line notice is not required if the amount of cigarettes seized is less
than sixty-one cartons of two hundred cigarettes each.

G. Any person whose legal rights, duties or privileges are determined by the notice
of seizure and forfeiture may file a request for an administrative hearing with the
department on a form prescribed by the department. The request for an administrative
hearing shall contain a statement of the petitioner's interest in the cigarettes and an
explanation of why the release or recovery of the cigarettes is warranted on the ground
that the cigarettes were erroneously or illegally seized.

H. The seizure and forfeiture of cigarettes or other tobacco products by the
department is an appealable agency action as defined in section 41-1092 and is governed
by title 41, chapter 6, article 10 and section 42-1251, except that:

1. A request for an administrative hearing that is filed under subsection G of this
section is deemed to be timely filed if the request is filed with the department within
ten days after the date of personal service on the petitioner or the date of mailing the
notice to the petitioner. Any person not served personally or by mail shall file the
request within ten days after the date of publication of the notice. The failure of a
person to file a timely request constitutes a bar to that person's right to any interest
in the cigarettes or other tobacco products, except insofar as the rights of that person
may be established in an action filed by the department under this chapter.

2. If a request for an administrative hearing is not filed with the department at
the expiration of ten days after the notice has been personally served, mailed or
published, the department's determination is final. If a timely request for an
administrative hearing has been filed with the department, the department shall request a
hearing by the office of administrative hearings and the department shall suspend action
until the final order of the department has been issued. An order that is issued by the
office of administrative hearings shall be the final order of the department thirty days
after the petitioner receives the decision unless a decision by the director is issued
pursuant to section 42-1251. If the director issues a decision, that decision is the
final order of the department.

I. For the purposes of this section, "cigarette" and "cigarette distributor" have
the same meanings prescribed in section 42-3001.