CHAPTER 5. DELIVERY SALES OF TOBACCO PRODUCTS
IC 24-3-5
Chapter 5. Delivery Sales of Tobacco Products
IC 24-3-5-0.1
"Cigarette"
Sec. 0.1. As used in this chapter, "cigarette" has the meaning setforth in IC 6-7-1-2.
As added by P.L.160-2005, SEC.1.
IC 24-3-5-0.2
"Cigarette manufacturer"
Sec. 0.2. As used in this chapter, "cigarette manufacturer" meansa person or an entity that does the following:
(1) Manufactures cigarettes.
(2) Does one (1) of the following:
(A) Participates in the Master Settlement Agreement (asdefined in IC 24-3-3-6) and performs the person's or entity'sfinancial obligations under the Master SettlementAgreement.
(B) Places the applicable amount into a qualified escrowfund (as defined in IC 24-3-3-7).
(3) Pays all applicable taxes under IC 6-7-1.
As added by P.L.160-2005, SEC.2.
IC 24-3-5-0.3
"Commission"
Sec. 0.3. As used in this chapter, "commission" refers to thealcohol and tobacco commission created by IC 7.1-2-1-1.
As added by P.L.160-2005, SEC.3.
IC 24-3-5-1
"Delivery sale"
Sec. 1. As used in this chapter, "delivery sale" means a transactionfor the purchase of tobacco products in which an offer to purchasetobacco products is made:
(1) electronically using a computer network (as defined inIC 35-43-2-3);
(2) by mail; or
(3) by telephone;
and acceptance of the offer results in delivery of the tobaccoproducts to a named individual or entity at a designated address.
As added by P.L.253-2003, SEC.1. Amended by P.L.160-2005,SEC.4.
IC 24-3-5-1.5
"Distributor"
Sec. 1.5. As used in this chapter, "distributor" includes thefollowing:
(1) A distributor as defined in IC 6-7-1-6.
(2) A distributor as defined in IC 6-7-2-2.As added by P.L.160-2005, SEC.5.
IC 24-3-5-2
"Merchant"
Sec. 2. As used in this chapter, "merchant" means a person or anentity that engages in the selling of tobacco products by deliverysale.
As added by P.L.253-2003, SEC.1.
IC 24-3-5-3
"Tobacco product"
Sec. 3. As used in this chapter, "tobacco product" has the meaningset forth in IC 7.1-6-1-3. However, the term does not include a cigaror pipe tobacco.
As added by P.L.253-2003, SEC.1. Amended by P.L.160-2005,SEC.6.
IC 24-3-5-4
Requirements
Sec. 4. Subject to section 4.5 of this chapter, a merchant may notmail or ship cigarettes as part of a delivery sale unless, beforemailing or shipping the cigarettes, the merchant:
(1) obtains from the prospective customer a written statementsigned by the prospective customer under penalty of perjury:
(A) providing the prospective customer's address and date ofbirth;
(B) advising the prospective customer that:
(i) signing another person's name to the statement requiredunder this subdivision may subject the person to a civilmonetary penalty of not more than one thousand dollars($1,000); and
(ii) purchasing cigarettes by a person less than eighteen(18) years of age is a Class C infraction underIC 35-46-1-10.5;
(C) confirming that the cigarette order was placed by theprospective customer;
(D) providing a warning under 15 U.S.C. 1333(a)(1); and
(E) stating the sale of cigarettes by delivery sale is a taxableevent for purposes of IC 6-7-1;
(2) makes a good faith effort to verify the information in thewritten statement obtained under subdivision (1) by using afederal or commercially available data base; and
(3) receives payment for the delivery sale by a credit or debitcard issued in the name of the prospective purchaser.
As added by P.L.253-2003, SEC.1. Amended by P.L.160-2005,SEC.7.
IC 24-3-5-4.5
Delivery sale by merchant; penalties
Sec. 4.5. (a) This section applies to a merchant that is not a
cigarette manufacturer.
(b) Except as provided in subsection (d), a merchant may not mailor ship cigarettes as part of a delivery sale to an Indiana resident orretailer (as defined in IC 24-3-2-2(d)) that is not a distributor.
(c) If the commission determines that a merchant has violatedsubsection (b):
(1) a distributor may not accept a shipment of cigarettes fromthe merchant for a period, not to exceed one (1) year,determined by the commission; and
(2) the commission may impose a civil penalty, not to exceedfive thousand dollars ($5,000), on the merchant for eachviolation of subsection (b), as determined by the commission.
(d) A merchant may make a drop shipment of tobacco products toan Indiana resident or retailer that is billed through a distributor.
As added by P.L.160-2005, SEC.8.
IC 24-3-5-5
Mailing or shipping tobacco products; requirements; penalties
Sec. 5. (a) A merchant who mails or ships cigarettes as part of adelivery sale shall:
(1) use a mailing or shipping service that requires the customeror a person at least eighteen (18) years of age who is designatedby the customer to:
(A) sign to accept delivery of the cigarettes; and
(B) present a valid operator's license issued under IC 9-24-3or an identification card issued under IC 9-24-16 if thecustomer or the customer's designee, in the opinion of thedelivery agent or employee of the mailing or shippingservice, appears to be less than twenty-seven (27) years ofage;
(2) provide to the mailing or shipping service used undersubdivision (1) proof of compliance with section 6(a) of thischapter; and
(3) include the following statement in bold type or capitalletters on an invoice or shipping document:
INDIANA LAW PROHIBITS THE MAILING ORSHIPPING OF CIGARETTES TO A PERSON LESS THANEIGHTEEN (18) YEARS OF AGE AND REQUIRESPAYMENT OF ALL APPLICABLE TAXES.
(b) The commission may impose a civil penalty of not more thanone thousand dollars ($1,000) if a mailing or shipping service:
(1) delivers cigarettes as part of a delivery sale without firstreceiving proof from the merchant of compliance with section6(a) of this chapter; or
(2) fails to obtain a signature and proof of identification of thecustomer or the customer's designee under subsection (a)(1).
The commission shall deposit amounts collected under thissubsection into the youth tobacco education and enforcement fundestablished by IC 7.1-6-2-6.
(c) The following apply to a merchant that mails or ships
cigarettes as part of a delivery sale without using a third party serviceas required by subsection (a)(1):
(1) The merchant shall require the customer or a person at leasteighteen (18) years of age who is designated by the customer to:
(A) sign to accept delivery of the cigarettes; and
(B) present a valid operator's license issued under IC 9-24-3or identification card issued under IC 9-24-16 if thecustomer or the customer's designee, in the opinion of themerchant or the merchant's employee making the delivery,appears to be less than twenty-seven (27) years of age.
(2) The commission may impose a civil penalty of not morethan one thousand dollars ($1,000) if the merchant:
(A) delivers the cigarettes without first complying withsection 6(a) of this chapter; or
(B) fails to obtain a signature and proof of identification ofthe customer or the customer's designee under subdivision(1).
The commission shall deposit amounts collected under thissubdivision into the youth tobacco education and enforcementfund established by IC 7.1-6-2-6.
As added by P.L.253-2003, SEC.1. Amended by P.L.160-2005,SEC.9.
IC 24-3-5-6
Filing with department of state revenue; compliance
Sec. 6. (a) A merchant shall, before mailing or shipping cigarettesas part of a delivery sale, provide the department of state revenuewith a written statement containing the merchant's name, address,principal place of business, and each place of business in Indiana.
(b) A merchant who mails or ships cigarettes as part of a deliverysale shall, not later than the tenth day of the calendar monthimmediately following the month in which the delivery saleoccurred, file with the department of state revenue a copy of theinvoice for each delivery sale to a customer in Indiana. The invoicemust include the following information:
(1) The name and address of the customer to whom thecigarettes were delivered.
(2) The brand name of the cigarettes that were delivered to thecustomer.
(3) The quantity of cigarettes that were delivered to thecustomer.
(c) A merchant who complies with 15 U.S.C. 376 for the deliverysale of cigarettes is considered to satisfy the requirements of thissection.
As added by P.L.253-2003, SEC.1. Amended by P.L.160-2005,SEC.10.
IC 24-3-5-7
Pay taxes or provide notice; penalties
Sec. 7. (a) A merchant who delivers cigarettes to a customer as
part of a delivery sale shall:
(1) collect and pay all applicable taxes under IC 6-7-1; or
(2) place a legible and conspicuous notice on the outside of thecontainer in which the cigarettes are shipped. The notice shallbe placed on the same side of the container as the address towhich the container is shipped and must state the following:
"If these cigarettes have been shipped to you from amerchant located outside the state in which you reside, themerchant has under federal law reported information aboutthe sale of these cigarettes, including your name and address,to your state tax collection agency. You are legallyresponsible for all applicable unpaid state taxes on thesecigarettes.".
(b) For a violation of this section the commission may impose, inaddition to any other remedies, civil penalties as follows:
(1) If the person has one (1) judgment for a violation of thissection committed during a five (5) year period, a civil penaltyof at least one thousand dollars ($1,000) but not more than twothousand dollars ($2,000).
(2) If the person has two (2) unrelated judgments for violationsof this section committed during a five (5) year period, a civilpenalty of at least two thousand five hundred dollars ($2,500)but not more than three thousand five hundred dollars ($3,500).
(3) If the person has three (3) unrelated judgments for violationsof this section committed during a five (5) year period, a civilpenalty of at least four thousand dollars ($4,000) but not morethan five thousand dollars ($5,000).
(4) If the person has four (4) unrelated judgments for violationsof this section committed during a five (5) year period, a civilpenalty of at least five thousand five hundred dollars ($5,500)but not more than six thousand five hundred dollars ($6,500).
(5) If the person has at least five (5) unrelated judgments forviolations of this section committed during a five (5) yearperiod, a civil penalty of ten thousand dollars ($10,000).
As added by P.L.253-2003, SEC.1. Amended by P.L.97-2004,SEC.87; P.L.160-2005, SEC.11.
IC 24-3-5-8
Civil penalties
Sec. 8. The commission may impose a civil penalty of not moreone thousand dollars ($1,000) on a:
(1) customer who signs another person's name to a statementrequired under section 4(1) of this chapter; or
(2) merchant who sells cigarettes by delivery sale to a personless than eighteen (18) years of age.
The commission shall deposit amounts collected under this sectioninto the youth tobacco education and enforcement fund establishedby IC 7.1-6-2-6.
As added by P.L.253-2003, SEC.1. Amended by P.L.160-2005,SEC.12.