15 AAC 50.100. Exemptions for military and Indian reservation sales

(a) Cigarettes imported or acquired by a military exchange, commissary, or ship store are exempt from tax under this chapter if the cigarettes are sold to and for the sole use of authorized personnel according to current military regulations. Cigarettes imported or acquired by a military exchange, commissary, or ship store and sold to or for the use of unauthorized personnel are not exempt from the tax under this chapter. Cigarettes imported or acquired by independent contractors and sold to consumers within military installations are not exempt from tax under this chapter.

(b) A person claiming an exemption under (a) of this section for the sale of cigarettes directly to a military exchange, commissary, or ship store shall file, with a return under 15 AAC 50.120, an exemption certificate for each exempt sale claimed under this section. The certificate must be in the form of an affidavit, signed by an authorized agent of the military exchange, commissary, or ship store, and contain a statement that the cigarettes purchased will be sold solely to and for the use of authorized personnel in accordance with military regulations. Accompanying the exemption certificate must be the invoice supporting the sale to the military exchange, commissary, or ship store.

(c) If the department determines that cigarettes sold under exemption of this section were sold to or for the use of unauthorized personnel, the department will assess the tax under this chapter to the person or entity making the sale.

(d) Cigarettes imported or acquired by an Indian operating a cigarette business within an Indian reservation are exempt from tax under this chapter if the cigarettes are sold to and for the sole use of Indians. Cigarettes imported or acquired by an Indian operating a cigarette business within an Indian reservation are not exempt from the tax under this chapter if sold to a non-Indian, and the tax from those nonexempt sales must be collected, reported, and remitted as required in (f) of this section.

(e) A person claiming an exemption under (d) of this section for the sale of cigarettes directly to an Indian operating a cigarette business within an Indian reservation shall file with a return under 15 AAC 50.120, an exemption certificate for each exempt sale claimed under this section. The certificate must be in the form of an affidavit signed by the Indian operating the cigarette business within the Indian reservation, and it must contain a statement that tax-free cigarettes will be sold solely to and for the use of Indians. Accompanying the exemption certificate must be the invoice supporting the sale to the Indian operating the cigarette business within the Indian reservation.

(f) An Indian operating a cigarette business on an Indian reservation and making sales to non-Indians shall collect the tax due on sale of cigarettes from the non-Indian and remit the tax with a withholding report to the department. The withholding report must be on a form prepared by the department and must state the number of cigarettes sold to non-Indians and the amount of tax due on the sales to the non-Indians. The tax collected and the withholding report must be filed with the department no later than the end of the month following the month in which the cigarettes were sold.

(g) If the department determines that cigarettes sold under exemption of this section were sold to or for the use of non-Indians without collection, remitting, and reporting the tax due, the department will assess the tax under this chapter to the person or entity making the sale.

History: Eff. 2/27/83, Register 85

Authority: AS 43.05.080

AS 43.50.090

AS 43.50.150

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