OAR 150-323-0410: Credit for Tobacco Tax Paid; Refund

(1) Credit for tax paid will be allowed when tobacco products are: (a) Shipped to a point outside this state, pursuant to a contract of sale, and delivered by the seller to such out-of-state point by means of: (A) The United States mail; or (B) A common carrier licensed by the Federal Highway Administration; or (C) Facilities operated by the seller. (b) Sold to a foreign purchaser for shipment abroad and delivered to a ship, airplane, or other conveyance furnished by the purchaser for the purpose of carrying the tobacco products abroad and actually carried to a foreign destination. (c) Sold for use solely outside this state and delivered to a forwarding agent, export packer, or other person engaged in the business of preparing goods for export or arranging for their exportation, and actually delivered to a port outside the continental limits of the United States. (d) Sold for use as ship’s supplies which are to be consumed or resold on the high seas or in foreign countries. (2) Oregon distributors claiming credit for tax on tobacco products on the ground that shipments or deliveries were made in interstate commerce must certify, under penalties for false swearing, the name and address of the persons receiving such shipments or deliveries outside this state. Also, the Oregon distributors must be in possession of delivery data of the following descriptions: (a) A waybill, bill of lading or other evidence of shipment issued by a common carrier in the case of shipments by common carrier; or (b) An insurance receipt or registry receipt issued by the United States Postal Service; or (c) A copy of the sellers invoice covering the sale, showing delivery by the seller at a designated out-of-state address, and signed by the purchaser or the purchaser’s agent in the case of shipments by facilities operated by the seller. The department reserves the right to require such additional proof as it deems necessary in any particular case. (3) Reports of such exempt sales must be maintained as provided in ORS 323.510. The tax applies to the transaction if the tobacco products are diverted in transit or for any other reason are not actually delivered outside the state pursuant to the contract of sale or are not shipped abroad to a foreign purchaser, regardless of documentary evidence held by the distributor. (4) Tobacco products are not considered to be sold in interstate commerce and therefore are not exempt from tobacco tax if the product is received by a purchaser or agent (other than a common carrier) in this state. (5) Failure to keep any reports, waybills, bills of lading, or other documents required by this rule is justification for the Department of Revenue to impose a tax on any tobacco products claimed to be shipped out of Oregon and exempt under this rule. Any tax imposed on these grounds will be cancelled upon actual proof to the department that the reports, waybills, bills of lading or other documents were in fact issued and the tobacco products were in fact shipped out of Oregon and were exempt under this rule. (6) Credit claimed as provided in this rule will be in the form of a deduction on the next regularly scheduled quarterly tobacco tax return. Whenever a tobacco distributor ceases operation as a licensed tobacco distributor any credit accrued but not yet claimed may be deducted on the final tax return. Refund of overpayments on a distributor’s tobacco tax account is allowed when an audit determines a net overpayment has been made during the audit period. Refunds are also allowed if a distributor determines a net overpayment has been made and claims the refund by filing an amended tobacco tax return for the period in which the overpayment occurred. No refund is allowed after three years from the date of any overpayment.