Sec. 1. 36 MRSA §4365, as amended by PL 2001, c. 439, Pt. SSSS, §1 and affected by §4, 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 62.5 mills for each cigarette. Payment of the tax is evidenced by the affixing of stamps to the packages containing the cigarettes. If an individual purchases in any one month unstamped packages containing cigarettes in a quantity greater than 2 cartons from a person other than a licensed distributor or dealer, the tax may be assessed directly against the purchaser by the State Tax Assessor within 3 years from the date of the purchase.

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 SSSS, §2, is repealed.

Sec. 3. 36 MRSA §4365-F is enacted to read:

§4365-F.__Application of cigarette tax rate increase effective

October 1, 2003

The following provisions apply to cigarettes held for resale on October 1, 2003.

1.__Stamped rate.__Cigarettes stamped at the rate of 50 mills per cigarette and held for resale after September 30, 2003 are subject to tax at the rate of 62.5 mills per cigarette.

2.__Liability.__A person possessing cigarettes for resale is liable for the difference between the tax rate of 62.5 mills per cigarette and the tax rate of 50 mills per cigarette in effect before October 1, 2003.__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, 2003, 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, 2003 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 62.5 mills per cigarette placed in vending machines before October 1, 2003.