Tobacco Tax COVID-19 Update

Experts state tobacco sales should be banned during the COVID-19 crisis and have recommended users to stop. In response to COVID-19 are tobacco sales actually decreasing though? And what is the federal and state government doing to assist the tobacco industry?

  1. Are tobacco sales actually decreasing during the COVID-19 crisis?

Despite doctors recommendations of the health risks associated with smoking during the COVID-19 crisis, sales of tobacco have actually spiked. It seems this spike was a result of stock piling and has somewhat leveled out over the past week or so. However, surprisingly tobacco and liquor sales are staying strong during this pandemic.

  1. Unexpected efforts from tobacco companies to find a vaccine

The race to find a vaccine for the COVID-19 has an unlikely new entrant: tobacco companies. Lucky Strike owner British American Tobacco PLC is developing a potential vaccine grown in tobacco plants, while Medicago Inc., a biotech firm partly owned by Marlboro maker Philip Morris International Inc., is pursuing a similar effort. You can find more information about these measures here.

  1. What is the government doing to assist these businesses?

Tax Payment and Other Filing Due Dates have been Postponed for Industry Members Affected by COVID-19, including the tobacco industry

To assist businesses that have been severely impacted during the COVID-19 crisis, the Federal government has postponed several filing and payment due dates for 90-days where the original due date falls on or after March 1, 2020, through July 1, 2020.

Specifically, the following requirements are postponed:

  1. Postponing tax payment due dates for wine, beer, distilled spirits, tobacco products, cigarette papers and tubes, firearms, and ammunition excise taxes.
  2. Postponing filing due dates for excise tax returns.
  3. Postponing filing due dates for submission of operational reports.
  4. Postponing filing due dates for claims for credit or refund by producers.
  5. Postponing filing due dates for claims by manufacturers of nonbeverage products.
  6. Postponing due dates for submission of export documentation.
  7. Considering emergency variations from regulatory requirements for affected businesses on a case-by-case basis.
  8. Reviewing requests for relief from penalties based on reasonable cause.

The government will re-evaluate the terms of this immediate relief if circumstances warrant. You can find additional information on the relief the government is providing to tobacco businesses here. In addition, these businesses are eligible for several other provisions under the CARES ACT. If your business is being affected by COVID-19 contact us to discuss your options.

Categories