§ 296.205 - Physical inventory requirements.

Your physical inventory must include a written record of:

(a) Quantity and Type. You must record the quantity and type of cigarettes in sufficient detail to determine the tax rate as stated in § 296.222 and whether the cigarettes have export markings as stated in § 296.203. The following chart provides the type of cigarette and method to use to determine quantities:

Type or kindInventory methodSmall cigarettes (Class A)Count the: • Number of cigarettes without export markings. • Number of cigarettes with export markings.Large cigarettes (Class B)Count the: • Number of large cigarettes 6.5″ or less in length without export markings. • Number of large cigarettes 6.5″ or less in length with export markings. • Number of each size of large cigarettes more than 6.5″ in length without export markings. • Number of each size of large cigarettes more than 6.5″ in length with export markings.

(b) Date. Date(s) the inventory was taken.

(c) Name. Name of individual(s) conducting the inventory and the name of the person for whom the inventory was taken.

(d) Location. Record where the inventory was taken (street address, city and State).

(e) Time. The physical inventory must be taken between the dates shown in § 296.204. If you do not take the physical inventory as of the close of business on the last respective business days of 1999 and 2001, the records must be reconciled. The inventory records must be reconciled to reflect the actual quantity of cigarettes held as of the first moment of January 1, 2000 and January 1, 2002, respectively. These records must include all supporting records of receipt and disposition.