Prior to the recent amendment, California taxed “tobacco products”
which wa defined as “all forms of cigars, smoking tobacco, chewing
tobacco, snuff, and any . . . products made of, or containing at least
50 percent, tobacco.” This meant that certain products, such as
blunt wraps, or cigar wraps, could escape the prospect of being subject
to these tobacco taxes. We have successfully argued against the taxability
of similar products in many states.
The new law eliminated the 50% threshold and casts a much wider next in
its determination as to whether a product is a tobacco product for tax
purposes. The new definition of “tobacco products” provides
that “a product containing, made, or derived from tobacco . . .
that is intended for human consumption,” will be subject to tax.
With the removal of a minimum tobacco composition,
any product containing
any amount of tobacco that is intended for human consumption can be taxed.
This change would seemingly capture blunt wraps within its reach.
It seems that it could be reasonably argued that prior to the amendment
blunt wraps were not taxable and post amendment they are. While distributors
may be subjected to California's 28% tax on a go forward basis, distributors
should hustle to get their refund claims filed as the statute of limitations
If you or your company has been paying tax on blunt wraps over the past
several years please call for a free consultation.
About the author: Mr. Donnini is the president and founder of Tobacco Tax
Refunds, Inc. He is also multi-state sales and use tax attorney and an
associate in the law firm Moffa, Sutton & Donnini, PA, based in Fort
Lauderdale, Florida. Mr. Donnini has extensive knowledge handling wholesale
tax controversy and refunds.
In his law practice Mr. Donnini's primary practice is multi-state sales
and use tax as well as state corporate income tax controversy. Mr. Donnini
also practices in the areas of federal tax controversy, federal estate
planning, Florida probate, and all other state taxes including communication
service tax, cigarette & tobacco tax, motor fuel tax, and Native American
taxation. Mr. Donnini obtained his LL.M. in Taxation at NYU. Mr. Donnini
is licensed to practice law in Florida. If you have any questions please
do not hesitate to contact him via email [email protected]
or phone at 954-639-4496.