103 KAR 41:020. Tax-free cigarettes.


      RELATES TO: KRS 138.130


      NECESSITY, FUNCTION, AND CONFORMITY: This administrative regulation, under authority of KRS 138.207, provides the procedure for distribution of tax-free cigarettes in hospitals and other eleemosynary institutions and waives the tax instead of providing refunds of tax previously paid.


      Section 1. Cigarettes donated to hospitals or other eleemosynary institutions for the benefit of, or for the use of, patients or inmates of such institutions will not be subject to the cigarette tax imposed by KRS Chapter 138 under the following conditions:

      (1) Provided the hospital or eleemosynary institution has entered into an agreement with the Department of Revenue to distribute the cigarettes on a gratuitous and equitable basis to all eligible recipients. Under no circumstances can such cigarettes be offered for sale or consumed by any person other than a patient or inmate of the institution. The consumption of the cigarettes must occur on the premises of the institution;

      (2) Provided a permit for each delivery of cigarettes has been granted by the Department of Revenue. A copy of each such permit must be retained in the files of the manufacturer or wholesaler for a period of two (2) years, and must be available for inspection by any authorized agent of the Department of Revenue;

      (3) Provided the cigarettes are delivered by a manufacturer or a licensed wholesaler directly to the receiving department of the hospital or eleemosynary institution, by way of either a vehicle owned and operated by the consignor or a licensed transporter of cigarettes. (CT-21; 1 Ky.R. 710; eff. 5-14-75; TAm eff. 5-20-09.)