Ala. Code § 6-12A-1 Short Title.
6-12A-1. Short Title.
This chapter may be cited as the Tobacco Master Settlement Complementary Legislation Act.
(Act 2003-372, p. 1049, §2.)
Tobacco Master Settlement Complementary Legislation.
Ala. Code tit. 6, ch. 12A
in effectAla. Code § 6-12A-2 Definitions.
6-12A-2. Definitions.
For the purposes of this chapter, unless otherwise indicated, the following terms shall have the meanings respectively ascribed to them by this section:
(1) BRAND FAMILY. All styles of cigarettes sold under the same trade mark and differentiated from one another by means of additional modifiers or descriptors, including, but not limited to, menthol, lights, kings, and 100s and includes any brand name (alone or in conjunction with any other word) trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicia of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes.
(2) CIGARETTE. As defined under subdivision (4) of Section 6-12-2.
(3) COMMISSIONER. The Commissioner for the Department of Revenue for the State of Alabama.
(4) DISTRIBUTOR. A person, wherever resident or located, who purchases non-tax-paid cigarettes and stores, sells, or otherwise disposes of the cigarettes.
(5) IMPORTER. As defined under subdivision (5) of Section 6-12-2.
(6) MASTER SETTLEMENT AGREEMENT. The tobacco Master Settlement Agreement as defined under subdivision (6) of Section 6-12-2.
(7) NON-PARTICIPATING MANUFACTURER. Any tobacco product manufacturer that is not a participating manufacturer.
(8) PARTICIPATING MANUFACTURER. As defined in Section II(jj) of the Master Settlement Agreement, and all amendments thereto.
(9) QUALIFIED ESCROW FUND. As defined in subdivision (7) of Section 6-12-2.
(10) TOBACCO PRODUCT MANUFACTURER. As defined in subdivision (10) of Section 6-12-2.
(11) UNITS SOLD. As defined in subdivision (11) of Section 6-12-2.
(12) WHOLESALER. A person, firm, corporation, club, or association that is authorized to affix tax stamps to packages or other containers of cigarettes under Chapter 25 of Title 40.
(Act 2003-372, p. 1049, §2; Act 2014-341, p. 1266, §1.)
Ala. Code § 6-12A-3 Tobacco Product Manufacturer Certification; Directory; Stamping, Sale, or Import of Cigarettes Not in Directory.
6-12A-3. Tobacco Product Manufacturer Certification; Directory; Stamping, Sale, or Import of Cigarettes Not in Directory.
(a) Certification. Every tobacco product manufacturer whose cigarettes are sold in this state whether directly or through a distributor, retailer, or similar intermediary or intermediaries shall execute and deliver on a form prescribed by the commissioner, a certification to the commissioner no later than the thirtieth day of April each year, certifying that, as of the date of the certification, the tobacco product manufacturer either: Is a participating manufacturer or is in full compliance with Section 6-12-3, including all quarterly installment payments required by subsection (e) of Section 6-12A-5.
(1) Each participating manufacturer shall include in its certification a list of its brand families. The participating manufacturer shall update its list 30 days prior to any addition or modification to its brand families by executing and delivering a supplemental certification to the commissioner.
(2) Each non-participating manufacturer shall include in its certification:
a. A complete list of all of its brand families.
b. A separate listing containing the names of the brand families of cigarettes and the number of units sold for each brand family in the state during the preceding calendar year.
c. A separate listing containing the names of its brand families that have been sold in the state at any time during the current calendar year.
d. An indication by an asterisk of the names of any brand family sold in the state during the preceding calendar year that are no longer being sold in the state as of the date of the certification.
e. An identification by name and address of any other manufacturer of any of the listed brand families in the preceding or current calendar year.
f. In the case of cigarettes, brands, or brand families imported into the United States by one or more importers, an identification by name and address of any and all importers of the cigarettes.
Each non-participating manufacturer shall update its list at least 30 days prior to any addition or modification to its list of brand families by executing and delivering a supplemental certification to the commissioner.
(3) Additionally, each non-participating manufacturer shall further certify in its certification:
a. That both the non-participating manufacturer, and, if applicable, the importer of the cigarettes, are registered to do business in the state or has appointed an agent for service of process and provided notice thereof as required by Section 6-12A-4.
b. That it has:
1. Established and continues to maintain a qualified escrow fund.
2. Executed a qualified escrow agreement that has been reviewed and approved by the commissioner and that governs the qualified escrow fund.
c. That it is in full compliance with Section 6-12-3 and this chapter, and any regulations promulgated pursuant thereto.
d.1. The name, address, and telephone number of the financial institution where it has established the qualified escrow fund required pursuant to Section 6-12-3 and all regulations promulgated thereto.
2. The account number of the qualified escrow fund and any sub-account number for the State of Alabama.
3. The amount the non-participating manufacturer placed in the qualified escrow fund for cigarettes sold in the state during the preceding calendar year, the date and amount of each deposit, and any evidence or verification as may be deemed necessary by the commissioner to confirm the foregoing.
4. The amount and date of any withdrawal or transfer of funds the non-participating manufacturer made at any time from the qualified escrow fund or from any other qualified escrow fund into which escrow payments were ever made pursuant to Section 6-12-3 and all regulations promulgated thereto.
5. That it and, if applicable, the importer of the cigarettes, holds a current and valid permit under 26 U.S.C. § 5713.
(4) A participating manufacturer may not include a brand family in its certification unless it affirms that the brand family is to be deemed to be its cigarettes for purposes of calculating its payments under the Master Settlement Agreement for the relevant year, in the volume and shares determined pursuant to the Master Settlement Agreement.
(5) A non-participating manufacturer may not include a brand family in its certification unless it affirms that the brand family is to be deemed to be its cigarettes for purposes of Section 6-12-3.
(6) Nothing in this section shall be construed as limiting or otherwise affecting the state’s right to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the Master Settlement Agreement or for purposes of Section 6-12-3.
(7) The tobacco product manufacturers shall maintain all invoices and documentation of sales and any other information relied upon for certification for a period of five years, unless otherwise required by law to maintain them for a greater period of time.
(b) Directory of cigarettes approved for stamping and sale. Not later than 90 days after August 1, 2003, the commissioner shall compile and make available for public inspection a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of subsection (a), and all brand families that are listed in the certifications, except as noted below.
(1) The commissioner shall not include or retain in the directory the name or brand families of any non-participating manufacturer that fails or has failed to provide the required certification or whose certification the commissioner determines is not in compliance with subdivisions (2) and (3) of subsection (a), unless the commissioner has determined that each violation has been cured.
(2) Neither a tobacco product manufacturer nor a brand family shall be included or retained in the directory if the commissioner concludes either of the following:
a. Any escrow payment required pursuant to Section 6-12-3, for any period for any brand family, whether or not listed by the non-participating manufacturer, has not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the commissioner.
b. Any outstanding final judgment, including interest thereon, for a violation of Section 6-12-3, has not been fully satisfied for the brand family or the manufacturer.
c. That the non-participating manufacturer has not provided a bond in strict compliance with subsection (f) of Section 6-12A-5 and the rules relating thereto.
d. That the non-participating manufacturer has failed or refused to provide the documents or information requested by the commissioner in order to promote compliance with the requirements of this chapter.
(3) The commissioner shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand family to keep the directory in conformity with the requirements of this chapter. The commissioner, in addition to any notice requirements in Section 40-2A-8, shall transmit by electronic mail or other practicable means to each wholesaler, stamping agent, or distributor notice of any addition to or removal from the directory of any tobacco product manufacturer or brand family. The wholesaler, stamping agent, or distributor shall have 30 days from receipt of notice from the department regarding the change in the directory to sell the brand family that is delisted. No delisted brand family may be sold after the 30-day period.
(4) Every wholesaler and distributor shall provide and update as necessary an electronic mail address to the commissioner for the purpose of receiving any notifications as may be required by this chapter.
(c) Prohibition against stamping, sale, or import of cigarettes not in the directory. It shall be unlawful for any person to do either of the following:
(1) Affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the directory.
(2) Sell, offer, or possess for sale in this state, or import for personal consumption in this state, cigarettes of a tobacco product manufacturer or brand family not included in the directory.
(Act 2003-372, p. 1049, §2; Act 2014-341, p. 1266, §1.)
Ala. Code § 6-12A-4 Agent for Service of Process.
6-12A-4. Agent for Service of Process.
(a) Agent for service of process required. Any non-resident or foreign non-participating manufacturer that has not registered to do business in the state as a foreign corporation or business entity, as a condition precedent to having its brand families listed or retained in the directory, shall appoint and continually engage without interruption the services of an agent in this state to act as agent for the service of process on whom all process, and any action or proceeding against it concerning or arising out of the enforcement of this chapter and Section 6-12-3, may be served in any manner authorized by law. The service shall constitute legal and valid service of process on the non-participating manufacturer. The non-participating manufacturer shall provide the name, address, phone number, and proof of the appointment and availability of their agent to and to the satisfaction of the commissioner.
(b) The non-participating manufacturer shall provide notice to the commissioner 30 calendar days prior to termination of the authority of an agent and shall further provide proof to the satisfaction of the commissioner of the appointment of a new agent no less than five calendar days prior to the termination of an existing agent appointment. In the event an agent terminates an agency appointment, the non-participating manufacturer shall notify the commissioner of termination within five calendar days and shall include proof to the satisfaction of the commissioner of the appointment of a new agent.
(Act 2003-372, p. 1049, §2.)
Ala. Code § 6-12A-5 Reporting to Commissioner; Disclosure; Escrow Fund.
6-12A-5. Reporting to Commissioner; Disclosure; Escrow Fund.
(a) Reporting by wholesalers and distributors. Not later than 20 days after the end of each month, and more frequently if so directed by the commissioner, each wholesaler and distributor shall submit all the information the commissioner requires to facilitate compliance with this chapter, including, but not limited to, a list by brand family of the total number of cigarettes or in the case of roll your own, the equivalent stick count for which the wholesalers and distributors affixed stamps during the previous month or otherwise paid the tax due for any cigarettes. The wholesaler or distributor shall maintain, and make available to the commissioner, all invoices and documentation of sales of all non-participating manufacturer cigarettes and any other information relied upon in reporting to the commissioner for a period of five years.
(b) Disclosure of information. Notwithstanding any other law or rule, including Section 40-2A-10, the commissioner is hereby authorized to disclose, in the commissioner’s discretion, any information received under this chapter, Chapter 12 of this title, or Chapter 25 of Title 40, for purposes of the proper administration of any matter administered by the Department of Revenue, including but not limited to determining compliance with and enforcing this chapter, Chapter 12 of this title and Chapter 25 of Title 40, and in determining the proper amount of any payment, offset, adjustment, or refund pursuant to the Master Settlement Agreement or any agreement related thereto.
(c) Verification of qualified escrow fund. The commissioner may require at any time from the non-participating manufacturer proof, from the financial institution in which the manufacturer has established a qualified escrow fund for the purpose of compliance with Section 6-12-3, of the amount of money in the fund, exclusive of interest, the amount and date of each deposit, and the amount and date of each withdrawal from the fund.
(d) Requests for additional information. In addition to the information required to be submitted herein, the commissioner may require a wholesaler or distributor or tobacco product manufacturer to submit any additional information including, but not limited to, samples of the packaging or labeling of each brand family, as is necessary to determine whether a tobacco product manufacturer is in compliance with this chapter.
(e) Quarterly escrow installments. To promote compliance with this chapter, the commissioner may promulgate regulations requiring a tobacco product manufacturer subject to the requirements of subdivision (2) of subsection (a) of Section 6-12A-3, to make the escrow deposits required in quarterly installments during the year in which the sales covered by the deposits are made. The commissioner may require production of information sufficient to determine the adequacy of the amount of the installment deposit.
(f)(1) A non-participating manufacturer shall post a bond for the benefit of the commissioner, in accordance with this section, which is conditioned that the non-participating manufacturer shall fully comply with the escrow obligations of this chapter.
(2) The bond shall be posted at least 10 days in advance of each calendar quarter as a condition to the non-participating manufacturer and its brand families being included in the state directory for that quarter. The amount of the bond shall be the greater of a. the greatest required escrow amount due from the non-participating manufacturer or its predecessor for any of the 12 preceding calendar quarters or b. $25,000.
(3) If a non-participating manufacturer that posted a bond has failed to make or have made on its behalf deposits equal to the full amount owed for a quarter within 15 days following the due date for the quarter under subsection (e), the commissioner may execute upon the bond in the amount equal to any remaining amount of the escrow due including any applicable penalties or other charges allowable by law. Amounts the commissioner or the state collects on a bond shall be deposited into the General Fund for the benefit of the state and shall reduce the amount of escrow due from that non-participating manufacturer in the dollar amount collected. Escrow obligations above the amount collected on the bond remain due from that non-participating manufacturer and any importer liable as provided in subsection (b) of Section 6-12-3.
(4) The bond required under this subsection must be a good and sufficient bond executed by a surety company licensed and authorized to do business in Alabama and shall be conditioned to pay the escrow requirements as well as any penalties or other charges under this chapter.
(5) The commissioner may promulgate rules necessary to implement this subsection including acceptable forms and types of bonds.
(Act 2003-372, p. 1049, §2; Act 2014-341, p. 1266, §1.)
Ala. Code § 6-12A-6 Penalties; Unlawful Practices.
6-12A-6. Penalties; Unlawful Practices.
(a) Revocation of stamping privileges and civil penalty. In addition to or in lieu of any other civil or criminal remedy provided by law, upon a determination that a wholesaler, distributor, or any person has violated subsection (c) of Section 6-12A-3, or any regulation adopted pursuant thereto, the commissioner may revoke or suspend the stamping privileges of any stamping agent in the manner provided by Section 40-2A-8. Each stamp affixed and each offer to sell cigarettes in violation of subsection (c) of Section 6-12A-3 shall constitute a separate violation. For each violation thereof, the commissioner may also impose a civil penalty in an amount not to exceed the greater of 500 percent of the retail value of the cigarettes sold or five thousand dollars ($5,000) upon a determination of violation of subsection (c) of Section 6-12A-3 or any regulations adopted pursuant thereto.
(b) Contraband and seizure. Any cigarettes that have been sold, offered for sale, or possessed for sale in this state, or imported for personal consumption in this state in violation of subsection (c) of Section 6-12A-3 shall be deemed contraband, and the cigarettes shall be subject to seizure and forfeiture as provided under subsection (c) of Section 8-19-12; provided, however, that all such cigarettes shall be destroyed.
(c) Injunction. The commissioner may seek an injunction on behalf of the state to restrain a threatened or actual violation of subsection (c) of Section 6-12A-3, or subsection (a) or (d) of Section 6-12A-5, by a wholesaler or distributor, and compel the violator to comply with these subsections. In any action brought pursuant to this section, the state shall be entitled to recover the costs of investigation, costs of the action, and reasonable attorney fees.
(d) Unlawful sale and distribution. It shall be unlawful for a person to sell, distribute, acquire, hold, own, possess, transport, import, or cause to be imported cigarettes that the person knows or should know are intended for distribution or sale in the state in violation of subsection (c) of Section 6-12A-3. A violation of this subsection shall be a Class A misdemeanor.
(e) Unlawful and deceptive trade practices. A person who violates subsection (c) of Section 6-12A-3 engages in an unlawful and deceptive trade practice in violation of Section 8-19-5.
(Act 2003-372, p. 1049, §2.)
Ala. Code § 6-12A-7 Review; Application for Permit; Rules and Regulations; Costs and Fees; Disgorgement of Profits.
6-12A-7. Review; Application for Permit; Rules and Regulations; Costs and Fees; Disgorgement of Profits.
(a) Notice and review of determination. A tobacco product manufacturer who does not agree with a determination by the commissioner to not list or to remove from the directory a brand family or tobacco product manufacturer shall be entitled to file a written request for review with the commissioner. The written request shall be referred to as a petition for review and shall describe any specific objections to the determination not to list or to remove from the directory a brand family or tobacco product manufacturer.
(1) The petition for review and any supporting documentation, must be filed with the commissioner’s office not later than 30 days after the date of the determination.
(2) The commissioner shall review the petition and any supporting documentation and notify the tobacco product manufacturer of the final determination.
(3) At the request of the tobacco product manufacturer, or if otherwise deemed necessary by the commissioner, a conference may be scheduled to allow the commissioner and the tobacco product manufacturer to present their respective positions.
(b) Applications for stamping permits. No person shall be permitted or otherwise authorized to affix stamps to tobacco products unless they certify in writing that they will comply fully with this chapter.
(c) Dates. For the year 2003:
(1) The first report by wholesalers and distributors required by subsection (a) of Section 6-12A-5, shall be due 30 days after August 1, 2003.
(2) The certifications by tobacco product manufacturers described in subsection (a) of Section 6-12A-3, shall be due 45 days after August 1, 2003.
(3) The directory described in subsection (b) of Section 6-12A-3, shall be published or made available within 90 days after August 1, 2003.
(d) Promulgation of regulations. The commissioner may promulgate regulations necessary to effectuate the implementation and administration of this chapter.
(e) Recovery of costs and fees. In any action brought by the state to enforce this chapter, the state shall be entitled to recover the costs of investigation, expert witness fees, the costs of the action, and reasonable attorney fees.
(f) Disgorgement of profits for violations of chapter. If a court determines that a person has violated this chapter, the court shall order any profits, gain, gross receipts, or other benefit from the violation to be disgorged and paid to the State Treasurer for deposit in the Alabama 21st Century Fund, created by Section 41-10-629. Unless otherwise expressly provided, the remedies or penalties provided by this chapter are cumulative to each other and to the remedies or penalties available under all other laws of this state.
(Act 2003-372, p. 1049, §2.)
Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026