Information Release

XT 2003-11 Excise And Motor Fuel Tax Division Information Release – Master Settlement Agreement Changes - August 4, 2003

The 125th General Assembly recently passed Amended Substitute House Bill 95 that changes several of the requirements surrounding the Cigarette Master Settlement Agreement (MSA). These changes will affect tobacco manufacturers, wholesalers, and retailers.

Currently, cigarette and roll-your-own tobacco manufacturers must be either a signatory to the MSA or make payments to a qualified escrow account. This legislation provides for a Web site where all brands, that have met one of the above two requirements, will be listed. The Attorney General will establish and maintain the Web site. The Web site will be operational after August 11, 2003, and can be checked by going to www.ag.state.oh.us and under Current Features click on Tobacco Directory.

Ten days following the initial listing of the brands to the Web site, it will be illegal to affix an Ohio cigarette tax stamp or to sell or offer to sell in Ohio any brand of cigarette or roll-your-own tobacco that is not included on this list. Brands not on the list may be in your possession for sale into other states or waiting to be returned to the manufacturer, but may not be in your possession for sale or distribution in Ohio. The Department of Taxation may confiscate any cigarettes or roll-your-own tobacco found in violation of the statute and may revoke the license of any wholesale or retail dealer that distributes such products in Ohio. Wholesale and retail dealers may also be charged with a first-degree misdemeanor for the first offense and a fourth-degree felony for subsequent offenses. Section 1346.09 (B) of the Ohio Revised Code entitles the state to recover the costs of the investigation, expert witness fees, court costs and reasonable attorney’s fees associated with any action to enforce Sections 1346.05 through 1346.10 of the Ohio Revised Code.

The law requires the Attorney General to notify the Department of Taxation of any pending additions or removals to the list. The Department of Taxation will in turn give notice to all cigarette wholesalers and distributors of other tobacco products at least ten days prior to the effective date of the pending additions or removals.

In order for you to receive timely notification, the law requires all cigarette wholesalers and other tobacco products distributors to provide the Department of Taxation with electronic email addresses. Please complete the enclosed form with the email addresses that you would like to receive this notification and return it in the envelope provided by August 12, 2003. It is your responsibility to notify the Department of Taxation when there are email address changes.

Retail cigarette dealers will be notified of these changes and will also be able to access the list on the Attorney General’s Web site.

Any questions may be directed to the Excise and Motor Fuel Tax Division at (614) 466-7026.