Cigarette Tax Stamp Inventory Shortages and Overages

If you are a Minnesota distributor, complete Form CT201-R, Minnesota Distributors Cigarette Reconciliation. If line 18 is more than line 7, you have a shortage. If line 7 is more than line 18, you have an overage.

If you are an out-of-state distributor, complete Form CT401-R, Nonresident Distributors Cigarette Reconciliation. If line 14 is more than line 12D, you have a shortage. If line 12D is more than line 14, you have an overage.

A number of things can lead to overages and shortages. For a list of possible causes, see the resident and nonresident distributors examples below.

Due to natural fluctuations in business, we will offset your overages to a shortage that falls the month before or after the shortage during an audit. Any shortage not covered by an overage will result in additional tax when an audit of your records is completed.​

• Filing
  • Used Minnesota stamped cigarettes to fill out-of-state orders
  • Under-filled out-of-state orders
• Inventory
  • Understated beginning unstamped inventory
  • Overstated ending unstamped inventory ​
  • ​Included Minnesota in ending stamped inventory ​
  • ​Overstated beginning stamp inventory ​
  • ​​​Understated ending stamp inventory
  • ​Overstated other state's stamped inventory ​
• Stamping
  • Stamped cigarettes twice
• Recordkeeping
  • Overstated stamps purchased
  • Loaned stamps not accounted for
  • Under-reported stamped cigarettes
• Theft
  • Stamps stolen
• Tax Evasion
  • Contraband cigarettes stamped not reported
  • Stolen cigarettes purchased not reported
  • Stamps sold to another person

• Filing
  • Used other state stamped cigarettes to fill Minnesota orders
  • Over-filled out-of-state orders
• Inventory
  • Overstated beginning unstamped inventory
  • Understated ending unstamped inventory
  • Included Minnesota in beginning stamped inventory
  • Understated beginning stamp inventory
  • Overstated ending stamp inventory
  • Understated other state's stamped inventory
• Stamping
  • Shipped unstamped cigarettes accidentally
• Recordkeeping
  • Understated stamps purchased
  • Borrowed stamps not accounted for
  • Over-reported stamped cigarettes
• Theft
  • Unstamped cigarettes stolen from warehouse
• Tax Evasion
  • Unstamped other than legal exemptions

• Filing
  • Used Minnesota stamped cigarettes to fill other state orders
  • Over-filled Minnesota orders
• Inventory
  • Overstated beginning stamp inventory
  • Understated ending stamp inventory
• Stamping
  • Stamped cigarettes twice
• Recordkeeping
  • Overstated stamps purchased
  • Loaned stamps not accounted for
  • Under-reported stamped cigarettes
• Theft
  • Stamps stolen
• Tax Evasion
  • Stamps sold to another person

• Filing
  • Used other state stamped cigarettes to fill Minnesota orders
  • Under-filled Minnesota orders
• Inventory
  • Understated beginning stamped inventory
  • Overstated ending stamped inventory ​​
• Stamping
  • Shipped unstamped cigarettes accidentally
• Recordkeeping
  • Understated stamps purchased
  • Borrowed stamps not accounted for
  • Over-reported stamped cigarettes