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Instructions For Alaska Cigarette and Tobacco Products

Tax License Applications

Tobacco Products include the following: cigars; cheroots; perique;

License Required

snuff and snuff flour; smoking tobacco, including granulated, plug-cut,

No person shall import, manufacture, sell, purchase, possess or acquire

ready-rubbed, and any form of tobacco suitable for smoking in a pipe or

cigarettes as a manufacturer, distributor, direct-buying retailer, vending

cigarette; chewing tobacco, including cavendish, twist, plug, scrap, and

machine operator, or buyer without first having obtained the appropriate

tobacco suitable for chewing; or articles or products made of tobacco or a

license.

In addition, no person shall distribute any tobacco product

tobacco substitute, but not including cigarettes as defined above.

without first having obtained the appropriate license.

Businesses located out of state that wish to sell cigarettes and tobacco

Wholesale Price is the established price for which a manufacturer

products into the state and pay the tax imposed under AS 43.50, may

sells a tobacco product to a distributor after deduction of a discount

apply for a cigarette wholesaler-distributor license or a tobacco distributor

or other reduction received by the distributor for quantity or cash if the

license.

manufacturer’s established price is adequately supported by bona fide

arm’s length sales as determined by the Department. If the price is not

Please be advised that by applying for a license authorizing the sale of

adequately supported by bona fide arm’s length sales, the wholesale

cigarettes, you are agreeing to purchase and affix cigarette tax stamps,

price will be determined by the Department.

or designate a third party to do so on your behalf, as the means of paying

the state excise tax.

Where to Send Form 520

Caution: A person who fails to obtain a cigarette license prior to importing

TAX DIVISION

cigarettes into the state is subject to a penalty of 100% of the tax due on

DEPARTMENT OF REVENUE

the cigarettes in addition to the tax.

550 W 7TH AVENUE STE 500

ANCHORAGE, AK 99501

Definition of License Types

Buyer is a person who imports or acquires cigarettes for the person’s

own consumption from any source other than a manufacturer, distributor,

direct-buying retailer, retailer, or wholesaler-distributor.

Direct-Buying Retailer is a person who is engaged in the sale of

cigarettes at retail in the state, and who brings, or causes to be brought,

cigarettes into the state.

Cigarette Distributor a person who brings cigarettes, or has cigarettes

brought into the state, and who sells or distributes at least 75% of the

cigarettes to others for resale in the state. Tax is levied when cigarettes are

first imported or acquired in the state.

Manufacturer is a person who makes, fashions, or produces cigarettes

for sale to distributors or other persons.

Vending Machine Operator is a person who imports or acquires

cigarettes in the state, upon which the tax has not been paid, and

distributes them through vending machines.

Wholesaler-Distributors is a person outside of the state who sells

cigarettes into the state and agrees to pay the cigarette and tobacco

products tax imposed under AS 43.50.

Tobacco Products Distributor is a person who brings, or causes to be

brought, a tobacco product into the state from outside the state for sale;

makes, manufactures, or fabricates a tobacco product in the state for sale in

the state; or ships, or transports a tobacco product to a retailer in the state

for sale by the retailer. If you import cigarettes as well as tobacco products,

you only need to apply for the appropriate cigarette license.

Tax Imposed

There is an excise tax of 100 mills on each cigarette ($2.00 per pack

of 20) imported or acquired in Alaska. The cigarette tax must be paid

through the purchase of cigarette tax stamps. Use Form 620 to purchase

cigarette tax stamps. Taxpayers are entitled to a discount of 3% on the

first $1,000,000 and 2% on the next $1,000,000 of cigarette tax stamps

purchased in a calendar year. A tax is levied on tobacco products at the

rate of 75% of the wholesale price. Taxpayers may deduct 0.4 percent

(.004) of the total tobacco products tax to cover the expense of collecting

and remitting the tobacco products tax.

Other Definitions

Cigarette means a roll for smoking of any size or shape, made wholly or

partly of tobacco whether the tobacco is flavored, adulterated, or mixed

with another ingredient, if the wrapper or cover of the roll is made of paper

or a material other than tobacco.

0405-520i - Rev 08/12

Instructions For Form 520 - Alaska Cigarette And Tobacco Products Tax License Applications

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