There are many tax and licensing requirements for tobacco manufacturers.
In general, the first entity to manufacture or import tobacco products
in the United States is required to be federally licensed through TTB
as an importer or manufacturer. Further, the manufacturer or importer
is required to pay the applicable federal excise tax under
26 USC 5703 and the tax is calculated based on the product under
26 USC 5701. Failure to adhere to these requirements often results in penalties from TTB.
In July, 2012, Still Smokin, a manufacturer located in Miles City Montana,
was allegedly not properly licensed and failed to properly pay federal
excise tax. As a result, TTB imposed a lability of
$83,000. Upon the issuance of the violation, like any tobacco manufacturer or
importer has the right to do, Still Smokin fought the liability.
Challenging an assessment against TTB can often be an intimidating proposition
for a company. Many companies fear taking on the government for perceived
retaliation. Others simple pay the liabilities because they are unable
to find a lawyer or professional well versed in issues against TTB. Our
company often challenges TTB and other government agencies that can produce
favorable results for tobacco companies.
Although it is unclear the specific nature of the challenge, Still Smokin
dispute with TTB appeared to work out in its favor. Specifically, the
$83,000 liability was settled for $25,000 on March 14, 2019. Additionally,
the company was able to negotiate a 36-month payment plan.
Like any regulated substance the tobacco industry is riddled with tax,
compliance, and licensing landmines. It is important to have a professional
in your corner to help navigate this complex area and assist in resolutions
with the various government agencies. In addition to handling tax refund
disputes against state agencies, our company can assist your business
with its tobacco tax, licensing, and FDA compliance needs. Please do not
hesitate to call for a free consultation.
About the Author: 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 .