Thursday, March 12 2009
By Chris McCalla, Legislative Director,
IPCPR
Unfortunately, some erroneous information attributed to the IPCPR has been distributed to retailers from several manufacturers regarding the recently approved federal excise tax increases in the SCHIP statute.
In these letters, the manufacturer cites IPCPR as the source stating retailers are not required to include the federal excise tax as part of their OTP excise tax bill paid to their respective state.
This conclusion is incorrect. While the IPCPR has been looking into this question, at no time did we advise anyone that retailers may in fact exclude the federal tax from the wholesale price upon which a retailer remits the excise tax payments to their state's revenue department.
For the past several months [the] trade association has been researching this important question: How will states handle the tax increase? Must it be included in the manufacturer's selling price or may it be a separate line item, where the respective retailer pays his or her state excise tax only on the price of the cigars?
Following extensive research, the answer comes down to how each state applies its tax code. Regardless of how the manufacturers may include the federal excise tax on their invoices, it will be up to the respective state's revenue and tax departments to determine what constitutes the wholesale price upon which the retailer will pay the state's excise tax (in states with an excise tax on cigars).
We [are advising] retailers to contact their revenue department for clarification.
For more information, please visit IPCPR.org.
