Alaska Statutes: AS 43.50.800. Presumptions Applicable to Determination of Cost.

Alaska Statutes. Title 43. Revenue and Taxation Chapter 50. Tobacco Taxes and Sales Section 800. Presumptions Applicable to Determination of Cost.

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AS 43.50.800. Presumptions Applicable to Determination of Cost.

(a) The presumptive actual cost of cigarettes to a wholesaler is, for purposes of AS 43.50.710 - 43.50.849, the presumptive wholesale cost as calculated by the department plus an amount equal to four and one-half percent of the presumptive wholesale cost to account for business costs. For purposes of this section, the presumptive wholesale cost is the manufacturer's list price, less trade discounts, plus the full face value of all cigarette taxes.
(b) The presumptive actual cost of cigarettes to a retailer is, for purposes of AS 43.50.710 - 43.50.849, the presumptive actual cost of cigarettes to the wholesaler as calculated by the department under (a) of this section, plus an amount equal to six percent of the presumptive actual cost of cigarettes to the wholesaler to account for business costs.
(c) A wholesaler or retailer that wishes to advertise, offer to sell, or sell cigarettes at less than the presumptive actual cost to the wholesaler or retailer as calculated under (a) or (b) of this section must first obtain approval from the department. The department may grant approval only if the wholesaler or retailer provides proof satisfactory to the department that the wholesaler's or retailer's actual cost is lower than presumed. Approval for cigarette sales at less than the presumptive actual cost as determined under (a) or (b) of this section may not be granted for a period longer than one year. In reviewing proof of actual wholesale or retail cost, the department may consider the costs reflected on the actual invoice, but may not consider cash discounts. In reviewing proof of actual costs, the department may consider the standards and methods of accounting regularly employed, and must include labor costs, rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance, advertising, preopening expenses, provision for impaired assets and closing costs, interest expenses, and provision for merger and restructuring expenses. The department shall adopt regulations to determine the actual costs for the wholesaler and retailer for the purposes of AS 43.50.710 - 43.50.849.

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