Sec. 1. 36 MRSA §4365, as amended by PL 2003, c. 705, §6, is further amended to read:

§4365. Rate of tax

A tax is imposed on all cigarettes imported into this State or held in this State by any person for sale at the rate of 47 49 mills for each cigarette. Payment of the tax is evidenced by the affixing of stamps to the packages containing the cigarettes.

Sec. 2. 36 MRSA §4365-E, as enacted by PL 2001, c. 439, Pt. SSSS, §2, is amended to read:

§4365-E. Application of cigarette tax rate increase effective

November 1, 2005

The following provisions apply to cigarettes held for resale on October 1, 2001 November 1, 2005.

1. Stamped rate. Cigarettes stamped at the rate of 37 47 mills per cigarette and held for resale after September 30, 2001 October 31, 2005 are subject to tax at the rate of 47 49 mills per cigarette.

2. Liability. A person possessing cigarettes for resale is liable for the difference between the tax rate of 47 49 mills per cigarette and the tax rate of 37 47 mills per cigarette in effect before October 1, 2001 November 1, 2005. Stamps indicating payment of the tax imposed by this section must be affixed to all packages of cigarettes held for resale as of October 1, 2001 November 1, 2005, except that cigarettes held in vending machines as of that date do not require that stamp.

3. Vending machines. Notwithstanding any other provision of this chapter, it is presumed that all cigarette vending machines are filled to capacity on October 1, 2001 November 1, 2005 and that the tax imposed by this section must be reported on that basis. A credit against this inventory tax must be allowed for cigarettes stamped at the rate of 47 49 mills per cigarette placed in vending machines before October 1, 2001 November 1, 2005.

4. Payment. Payment of the tax imposed by this section must be made to the State Tax Assessor by January 1, 2002 January 15, 2006, accompanied by forms prescribed by the assessor.

Sec. 3. Appropriations and allocations. The following appropriations and allocations are made.