16-10-103. Definitions. When used in this chapter, except when the context clearly indicates a different meaning, the following definitions apply:

Terms Used In Montana Code 16-10-103

  • Basic cost of cigarettes: means the list cost of cigarettes as reported to the department by the manufacturer without any deductions for discounts or taxes of any kind. See Montana Code 16-10-103
  • Cigarettes: means any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and whether or not the tobacco is flavored, adulterated, or mixed with any other ingredient, the wrapper or cover of which is made of nontobacco paper or any other substance or material except tobacco. See Montana Code 16-10-103
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • cost to the retailer: means the cost to the wholesaler from whom the cigarettes were purchased by the retailer plus the cost of doing business by the retailer as evidenced by the standards and methods of accounting regularly employed by the retailer in the retailer's determination of costs for income tax reporting purposes for the total operation of the retailer's establishment. See Montana Code 16-10-103
  • cost to the wholesaler: means the basic cost of cigarettes purchased by the wholesaler from a manufacturer plus the cost of doing business by the wholesaler as evidenced by the standards and methods of accounting regularly employed by the wholesaler in the wholesaler's determination of costs for income tax reporting purposes for the total operation of the wholesaler's business. See Montana Code 16-10-103
  • Department: means the department of revenue provided for in 2-15-1301 and, when the meaning of the context requires, includes its employees. See Montana Code 16-10-103
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Manufacturer: means any person who fabricates cigarettes from raw materials for the purpose of resale. See Montana Code 16-10-103
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: means an individual, firm, association, company, partnership, corporation, or other business entity, however formed. See Montana Code 16-10-103
  • Retailer: means a person who operates a store, stand, booth, concession, or other outlet for the purpose of selling cigarettes at retail. See Montana Code 16-10-103
  • Sole distributor: means a person who either causes a unique brand of cigarettes to be manufactured according to distinctive specifications and acts as the exclusive distributor of the cigarettes or is the exclusive distributor of a brand of cigarettes within the continental United States. See Montana Code 16-10-103
  • United States: includes the District of Columbia and the territories. See Montana Code 1-1-201
  • Usual: means according to usage. See Montana Code 1-1-206
  • Wholesaler: means a person who services retail outlets by maintaining an established place of business for the purchase of cigarettes and who:

    (a) purchases cigarettes from a manufacturer for the purpose of selling cigarettes to retailers; or

    (b) purchases cigarettes from a sole distributor, another wholesaler, or any other person for the purpose of selling cigarettes to retailers. See Montana Code 16-10-103

(1) ”Basic cost of cigarettes” means the list cost of cigarettes as reported to the department by the manufacturer without any deductions for discounts or taxes of any kind.

(2) ”Business day” means any day other than a Sunday or a legal holiday.

(3) ”Cigarettes” means any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and whether or not the tobacco is flavored, adulterated, or mixed with any other ingredient, the wrapper or cover of which is made of nontobacco paper or any other substance or material except tobacco.

(4) (a) The term “cost to the retailer” means the cost to the wholesaler from whom the cigarettes were purchased by the retailer plus the cost of doing business by the retailer as evidenced by the standards and methods of accounting regularly employed by the retailer in the retailer’s determination of costs for income tax reporting purposes for the total operation of the retailer’s establishment. Cost of doing business by the retailer includes, without limitation:

(i) labor costs (including salaries of executives and officers);

(ii) rent;

(iii) depreciation;

(iv) selling costs;

(v) maintenance of equipment;

(vi) delivery costs;

(vii) all types of licenses;

(viii) all types of business taxes;

(ix) all types of insurance;

(x) all types of advertising;

(xi) any rebates, patronage dividends, or concessions, no matter how defined;

(xii) expenses prior to opening for business, including all startup costs, land acquisition costs, construction costs, costs for marketing studies, and similar expenses;

(xiii) any district, central, regional, and national administrative and operation costs and expenses; and

(xiv) all other indirect or overhead costs with respect to the operation of the business of the retailer.

(b) The cost of doing business by the retailer must be expressed as a percentage and applied to the cost to the wholesaler from whom the cigarettes were purchased.

(c) A retailer who purchases directly from a manufacturer or from any other person at or at less than or about the price normally and usually charged for purchases in wholesale quantities shall, in determining the cost to the retailer, add the cost of doing business by the wholesaler, as determined in subsection (5)(b), to the basic cost of cigarettes to the retailer, as well as the cost of doing business by the retailer.

(d) In the absence of the filing with the department of satisfactory proof of a lesser or higher cost of doing business by the retailer making the sale, the cost of doing business by the retailer is presumed to be 10% of the cost to the wholesaler.

(5) (a) The term “cost to the wholesaler” means the basic cost of cigarettes purchased by the wholesaler from a manufacturer plus the cost of doing business by the wholesaler as evidenced by the standards and methods of accounting regularly employed by the wholesaler in the wholesaler’s determination of costs for income tax reporting purposes for the total operation of the wholesaler’s business. The cost of doing business by the wholesaler includes, without limitation:

(i) labor costs (including salaries of executives and officers);

(ii) rent;

(iii) depreciation;

(iv) selling costs;

(v) maintenance of equipment;

(vi) delivery costs;

(vii) all types of licenses;

(viii) all types of business taxes;

(ix) all types of insurance;

(x) all types of advertising;

(xi) any rebates, patronage dividends, or concessions, no matter how defined;

(xii) expenses prior to opening for business, including all startup costs, land acquisition costs, construction costs, costs for marketing studies, and similar expenses;

(xiii) any district, central, regional, and national administrative and operation costs and expenses; and

(xiv) all other indirect or overhead costs with respect to the operation of the wholesaler.

(b) The cost of doing business by a wholesaler must be expressed as a percentage and applied to the basic cost of cigarettes.

(c) In the absence of the filing with the department of proof that the department declares to be satisfactory of a lesser or higher cost of doing business by the wholesaler making the sale, the cost of doing business by the wholesaler is presumed to be 5% of the basic cost of cigarettes to the wholesaler plus cartage to the retail outlet if performed or paid for by the wholesaler. The cartage cost, in the absence of the filing with the department of satisfactory proof of a lesser or higher cost, is considered to be 3/4 of 1% of the basic cost of cigarettes to the wholesaler.

(6) ”Department” means the department of revenue provided for in 2-15-1301 and, when the meaning of the context requires, includes its employees.

(7) ”Manufacturer” means any person who fabricates cigarettes from raw materials for the purpose of resale.

(8) ”Person” means an individual, firm, association, company, partnership, corporation, or other business entity, however formed.

(9) ”Retailer” means a person who operates a store, stand, booth, concession, or other outlet for the purpose of selling cigarettes at retail.

(10) ”Sale” or “sell” means any transfer of cigarettes for consideration, exchange, barter, gift, offer for sale, or distribution, in any manner or by any means.

(11) ”Sell at retail”, “sale at retail”, or “retail sales” means any transfer of title to cigarettes for a valuable consideration, made in the ordinary course of trade or usual conduct of the retailer’s business, to the purchaser for consumption or use.

(12) ”Sell at wholesale”, “sale at wholesale”, or “wholesale sales” means and includes any bona fide transfer of title to cigarettes for a valuable consideration, made in the ordinary course of trade or in the usual conduct of the wholesaler’s business, to a retailer for the purpose of resale.

(13) ”Sole distributor” means a person who either causes a unique brand of cigarettes to be manufactured according to distinctive specifications and acts as the exclusive distributor of the cigarettes or is the exclusive distributor of a brand of cigarettes within the continental United States.

(14) ”Wholesaler” means a person who services retail outlets by maintaining an established place of business for the purchase of cigarettes and who:

(a) purchases cigarettes from a manufacturer for the purpose of selling cigarettes to retailers; or

(b) purchases cigarettes from a sole distributor, another wholesaler, or any other person for the purpose of selling cigarettes to retailers.