Thursday, March 05 2009
From:
IPCPR
In a letter dated March 2, 2009, from the Department of Treasury's Alcohol and Tobacco Tax and Trade Bureau (TTB), the agency charged with implementing the new SCHIP tax increases, was sent to all distributors in the United States.
The TTB requested two items:
1. All locations of warehouses and distribution centers that distributors may store tax-paid tobacco products.
2. A list of distributor's customers to whom tobacco product was sold.
Unfortunately, one critical component of the SCHIP statute was omitted from the letter-- THERE IS NO FLOOR STOCKS TAX ON LARGE CIGARS. Large cigars, as defined by 26 U.S.C. Section 5701 (a)(2), of the Internal Revenue Service, are cigars that weigh three pounds or more per 1,000. By definition, this excludes most premium cigars.
Though the TTB letter explicitly states "any tobacco products held for sale" requires a floor stocks tax to be paid, large cigars are not included.
- Chris McCalla, Legislative Director, IPCPR
For more information on cigar industry-related news, please visit IPCPR.org.
