Tennessee § 67-4-1029 - Delivery sales of cigarettes — Enforcement.

§ 67-4-1029. Delivery sales of cigarettes — Enforcement.

As used in this section: “Cigarette” has the same meaning as in § 47-31-102; and “Person” means and includes every individual, partnership, firm, association, corporation, limited liability company, joint-stock company, state, political subdivision, Native American tribe, tribal government or subdivision, or any other entity, group, or syndicate. Except for sales to licensed wholesale dealers and jobbers, it is unlawful for any person to cause cigarettes either ordered by or through or purchased by or through the mail, a delivery service, the Internet, telephone, or some other electronic method to be shipped or transported to any person in this state without such products having the appropriate Tennessee tax paid by a licensed wholesale dealer and jobber pursuant to the rates set forth in §§ 67-4-1004 and 67-4-1005. After becoming a licensed wholesale dealer and jobber pursuant to § 67-4-1015, the wholesale dealer and jobber may sell cigarettes to state retail dealers after applying the appropriate tax stamp to all packs of cigarettes sold, and after paying the appropriate tobacco tax on roll your own tobacco products. It is unlawful for a wholesale dealer and jobber or a distributor to sell cigarettes directly to a consumer located within the state. Retail dealers may receive and sell directly to state consumers cigarettes, including roll your own tobacco products, provided that a wholesale dealer and jobber has paid the Tennessee tobacco tax on the products. In addition to any act that may be taken by the commissioner to enforce this section, the attorney general and reporter may bring an action to prevent or restrain violations of this section by any person, or any person controlling such person. Such action may be brought in Davidson County circuit or chancery court or any competent jurisdiction in the county where the alleged violation of this part took place or is about to take place, or in a county in which such person resides, conducts, transacts or has transacted business, or in the county in which such person can be found. In addition to other remedies available pursuant to law, regulation, or rule, the attorney general and reporter may also seek the following: Orders and statutory injunctions to prevent violations of this section. Such orders and injunctions shall be issued without bond being given by the state, and shall be statutory injunctions requiring a substantial showing that the non-moving party is violating or has violated this section. In seeking such orders and injunctions, the attorney general and reporter is not required to show a likelihood of irreparable harm; An order temporarily or permanently revoking a license or certificate authorizing the person to engage in business in this state; A civil penalty of up to five thousand dollars ($5,000) for each violation of this section. For purposes of this subdivision (g)(3), each shipment or transport of cigarettes constitutes a separate violation; or A civil penalty of up to ten thousand dollars ($10,000) for each and every knowing violation of the terms of an injunction or order issued under this section. When considering the amount of civil penalties to be awarded under this section, the court should give weight and consideration to the following factors: Whether the violation is intentional; The good or bad faith of the violator; Whether the person engaged in the prohibited act has violated any laws, regulations or rules relating to tobacco; The violator's ability to pay; The amount, number, volume, weight, cost, or other measure of cigarettes involved in the violation; The number of packages or mailings involved in the violation; Whether the violation is an isolated act or part of a sequence or series of violations; The potential injury to the public; The public's interest in eliminating the benefits derived by the violators from the violations; and The need to deter future violations. In any successful action initiated by the attorney general and reporter, the court shall order reimbursement to the attorney general and reporter for the reasonable costs and expenses of investigation and prosecution of actions under this section, including attorneys' fees. Nothing in this section shall be construed to directly or indirectly modify or amend any aspect of any provisions of the Tennessee Tobacco Manufacturers Escrow Fund Act of 1999, compiled in title 47, chapter 31, the related provisions regarding the tobacco settlement funds, compiled in part 26 of this chapter, or any provisions related to civil penalties not contained in this section. Unless otherwise expressly provided herein, the remedies and penalties provided by this section are cumulative and supplemental to each other and to the remedies and penalties available under any other laws, regulations or rules. Acts 2005, ch. 388, §§ 2-4; 2014, ch. 749, § 6. Compiler's Notes. Pursuant to Article III, Section 18 of the Constitution of Tennessee, Acts 2014, ch. 749 took effect on April 21, 2014. Amendments. The 2014 amendment rewrote the section which read: “(a)(1) Each seller, dealer or distributor of cigarettes who mails, ships, or otherwise delivers cigarettes in connection with a delivery sale shall provide a prominent and clearly legible statement on a web site or other literature to each prospective consumer that:“(A) Cigarette sales to consumers who are younger than the legal minimum purchase age are illegal;“(B) Sales of cigarettes are restricted to those consumers who provide verifiable proof of age in accordance with subdivision (b)(2)(B); and“(C) Cigarette sales are subject to tax under § 67-4-1004 . Such statement shall include an explanation of how such tax has been, or is to be, paid with respect to such delivery sale.“(b) Each seller, dealer or distributor of cigarettes who mails, ships, or otherwise delivers cigarettes in connection with a delivery sale shall:“(1) Include a clear and conspicuous statement on the package, as follows: "Cigarettes: Tennessee Law Prohibits Shipping to Individuals Under Age Eighteen, and requires the payment of all Applicable Taxes";“(2) Use a method of mailing, shipping, or delivery that obligates the delivery service to:“(A) Require the consumer placing the purchase order for the delivery sale, or another adult of legal minimum purchase age, to sign to accept delivery of the shipping container; and“(B) Restrict delivery to an adult of legal minimum purchase age.“(c)(1) Not later than the tenth day of each calendar month, a seller, dealer or distributor of cigarettes who mails, ships, or otherwise delivers cigarettes in connection with a delivery sale during the previous calendar month shall file with the department a memorandum or a copy of the invoice that provides for each and every such delivery sale:“(A) The name and address of the consumer to whom such delivery sale was made;“(B) The brand or brands of the cigarettes that were sold in such delivery sale; and“(C) The quantity of cigarettes that were sold in such delivery sale.“(2) Any person who satisfies the requirements of 15 U.S.C. § 376 shall be deemed to satisfy the requirements of this subsection (c).“(d)(1) If a seller, dealer or distributor of cigarettes who mails, ships, or otherwise delivers cigarettes in connection with a delivery sale commits a first violation of any provision of this section, then the seller, dealer or distributor shall be subject to a fine of one thousand dollars ($1,000) or five (5) times the retail value of the cigarettes involved, whichever is greater. If the seller, dealer or distributor commits a second or subsequent violation of any provision of this section, then the seller, dealer, or distributor shall be subject to a fine of five thousand dollars ($5,000) or five (5) times the retail value of the cigarettes involved, whichever is greater.“(2) If a seller, dealer or distributor of cigarettes who mails, ships or otherwise delivers cigarettes in connection with a delivery sale complies with all requirements imposed by subsection (b), and if the delivery service fails to comply with the obligations imposed pursuant to subdivision (b)(2) in connection with such delivery sale, then the delivery service shall be subject to a fine of five hundred dollars ($500).“(3)(A) Any cigarettes sold or attempted to be sold in a delivery sale that does not meet the requirements of this section shall be forfeited to the state and destroyed.“(B) All fixtures, equipment, and all other materials and personal property on the premise of any person who, with the intent to defraud the state, violates any of the requirements of this section shall be forfeited to the state.“(e) The attorney general and reporter or the attorney general and reporter's designee, or any person who holds a valid permit under 26 U.S.C. § 5712 , may bring an action in the appropriate court in the state to prevent or restrain violations of this section by any person, or any person controlling such person.“(f) Each person accepting a purchase order for a delivery sale shall collect and remit to the department of revenue all cigarette taxes imposed by law with respect to such delivery sale, except that such collection and remission shall not be required to the extent such person has obtained proof, in the form of the presence of applicable tax stamps or otherwise, that such taxes have already been paid to the state.“(g) Nothing in this section shall be construed to directly or indirectly modify or amend any aspect of any provision of the Tennessee Tobacco Manufacturers' Escrow Fund Act of 1999, compiled in title 47, chapter 31, or the related provisions regarding the tobacco settlement funds, compiled in part 26 of this chapter.” Effective Dates. Acts 2014, ch. 749, § 13. April 21, 2014. [See the Compiler's Note.]