We’re Getting Refunds – New Jersey Wholesalers Can Be Next
In 2012, a case came down in Florida which changed the tobacco tax landscape nationwide. In Micjo v DBPR, a Florida Appellate Court determined that the wholesale sales price to which tax is calculated on does not include federal excise tax or shipping charges. We have been on a refund crusade since then and have filed millions of dollars on this issue.
After engaging in research for clients with other issues, we have determined that many other states have similar laws. For example, in New Jersey section 54:40B-3, imposes a 30% tax on the “wholesale sales price” of a tobacco product. Although slightly different than Florida, New Jersey has defined “wholesale sales price” to mean the actual price for which a manufacturer sells tobacco to a distributor. However, it would stand to reason that a similar analysis would apply to that which has been used in Florida to secure large refund claims.
Like Florida, it is advisable that if you or your client is a wholesale tobacco distributor then there is not much downside in filing a refund claim. Even though the tax is only 30%, this number can become significant pretty quickly. It may even pass muster, if your manufacturer splits out other non-toabcco charges. The refunds on this issue can be substantial.
Imagine your invoice says:
Tobacco $100,000
FET $80,000
Shipping $20,000
Total Invoice $200,000
Under our theory, if you paid wholesale tobacco tax on the full $200,000, then you may be entitled to a refund on 30% of the non-tobacco items (FET & Shipping), for a total of $30,000. You oculd go back multiple years on this issue. It is easy to see that having someone that knows what they are doing can claim large refunds for your company.
While most reputable tax professionals do not deal with oddball taxes like tobacco taxes. Wholesale tobacco tax is a complex area and requires unique knowledge of experience. But dealing with these unique issues is 100% of what our firm handles. We challenge the state tobacco taxing agency at every level from audit to protest, to controversy. Day in and day out, this is simply what we do.
Here is what we can do to help:
- In all cases, we can provide the taxpayer with a quick, efficient, and honest evaluation of your situation and how to proceed.
- We will review your audit results or refund denial and discuss ways to challenge your specific results.
- In most cases, we can at least get the penalties reduced or eliminated.
- In many cases, we can reduce the tobacco taxes and related interest.
- We can also often quickly secure refunds.
You are already looking at a large liability for taxes, penalties, and interest - why would you not at least have a free consultation with a consultant to challenge the agency's wrongdoing?
In addition, if you are located in Alaska, California, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Maine, Montana, New Hampshire, Oregon, North Dakota, Utah, Wisconsin, or other states with similar laws then you might have a refund based on Micjo. Give us a call to get started today!
Talking to us is FREE, so give us a call today at (888) 628-0334.
In his law practive 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.