Warning: NJ residents being charged back-taxes on Internet Purchases.

[Prospector]

Does anyone know if there are any other states that are doing the same? I know pretty much every state imposes a use tax (which usually approximates it's sales tax rate), but these excise taxes are quite something else.

[JCK]

Georgia's Excise is 22% or 23% plus 8% sales tax in my county. If a Retailer or Fedex were to report this sale to the State of Georgia, then I imagine I'd get hit with a letter from Georgia's Department of Revenue sometime in the future.

I imagine every state does it, just depends on what information is voluntarily given to each state.

[piperman]

I dont think AZ does it because most smoker of ciggs go to the Indain Res to pickup cartons of smoke for 30.00, and out of the res they are 45 to 50

[Prospector]

Can I assume that if a retailer or online vendor ships something to another state, he doesn't have to add his own state's excise taxes? I know that's the way it is for sales taxes.

[BlueHavanaII]

This is not new. I was involved in this back in June 2007. Click here for Cigar Advisor blog

The state of Georgia residents making out of state purchases to report them and pay the OTP tax. If not reported, there could be a fine of $250 as well.

As far as I have heard, only NJ has gone after the consumer, which sounds like it sucks, but can save the B&M industry by leveling the playing field. My prices are about 12% higher than online retailers, simply because we have a tax to pay. It's not fair to us that you can order from CI, Famous, etc and avoid taxes while undercutting the little B&M.

Every state has a budget and taxes are their primary source of revenue. If the states collected their due on tobacco (which shouldn't be taxed separately, but that's another rant), maybe they'd lower taxes (haha... yeah right, but you know what I mean!).

[l0venpeace]

Originally Posted by Prospector

Can I assume that if a retailer or online vendor ships something to another state, he doesn't have to add his own state's excise taxes? I know that's the way it is for sales taxes.

That is true. If I ship to Texas, I charge you Texas taxes because I am located in Texas. If I ship to you in California, I charge you no tax, and it is your responsibility to report it yourself.

FYI- California appointed a special task force last year to go after online tobacco purchasers for back-tax. In only a couple months they had billed for millions of dollars. Watch out for the tax man!

[SeanGAR]

Originally Posted by wattsd

So now its attacks on peoples intelligence. Like I said, anyone influenced that much by the title of a thread is a friggin moron. All you have to do is click it, read about it, then make an educated decision about whether or not you will continue to do business with NHC. Or maybe you are the type of person who just does what everyone tells him without making any effort whatsoever in making your own choices. Why the hell am I taking flac, all I did was express MY opinion just like everyone else in this thread. Maybe you should let the grownups talk for a while before you start jumping in guns blazing trying to pick apart what someone wrote because your life is so meaningless you have nothing better to do. So sorry to make it personal but it seems thats the way things are now done on here.

Thank you everyone who had meaningful feedback, it was interesting.

I called you "brilliant one".

You called others idiots and friggin morons.

From your post, it is quite apparent that I am wrong.

Apologies for insinuating that you are a "brilliant one". As you have shown conclusively, you are not.

[Only Fuentes]

I realize that I'm late to this party. Let's make one thing absolutely crystal clear: Israel (uptown cigars) meant absolutely NO harm to any other retailers in this thread. I have purchased from him several times and have the utmost respect for him!! I live 15 minutes from Holt's for crying out loud but chose to buy from him because he is a very customer oriented shop owner. His customers start calling him with these retro-tax charges and all he wanted to do was alert the membership here. There shouldn't even be a question in anyone's mind about his motives. This is a state tax issue not a supplier issue.

Bam Bam :

Have you ever bought from Uptown? If not then you have ZERO right to question his motives. You probably buy from NHC and are just as loyal to them as I am to my sources and that's fine but again that gives you ZERO right to question his motives without at least a PM about it. And before you start question MY motives know this: I spend more than $20k a year on smokes so I know more than a little than most about retailers and their motives.

[SeanGAR]

Originally Posted by Only Fuentes

Bam Bam :

Have you ever bought from Uptown? If not then you have ZERO right to question his motives.

Baloney.

And before you start question MY motives know this: I spend more than $20k a year on smokes so I know more than a little than most about retailers and their motives.

Seriously .. you write for MadTV?

[BamBam]

Just when I think I'm done with a thread

Originally Posted by Only Fuentes

Let's make one thing absolutely crystal clear: Israel (uptown cigars) meant absolutely NO harm to any other retailers in this thread.

Thanks for speaking for someone else....since you can read his mind and all

Originally Posted by Only Fuentes

There shouldn't even be a question in anyone's mind about his motives.

There was...to more than a few

Originally Posted by Only Fuentes

This is a state tax issue not a supplier issue.

Then shouldn't it have been titled "New Jersey Tax Dept...Not Good"

Think about it

Originally Posted by Only Fuentes

Bam Bam :

What

Originally Posted by Only Fuentes

Have you ever bought from Uptown?

No

Originally Posted by Only Fuentes

If not then you have ZERO right to question his motives.

Wrong..my forefathers guaranteed that right for me

Originally Posted by Only Fuentes

You probably buy from NHC and are just as loyal to them as I am to my sources

Wrong again. never done business with them. Also never seen them post a negative comment about a competitor.

Originally Posted by Only Fuentes

but again that gives you ZERO right to question his motives without at least a PM about it.

Wrong again..see 2 above

Originally Posted by Only Fuentes

And before you start question MY motives know this: I spend more than $20k a year on smokes so I know more than a little than most about retailers and their motives.

Just because you spend a lot of money on cigars does not mean that you can read people and tell what their motives are.

Seriously....How do you correlate those 2 together?

[kansashat]

Perhaps we need to change the name of this thread to "One Knee-Jerk Begats Another Knee-Jerk?"

[montecristo#2]

OK - I would like to bring this thread back on track.

I was under the impression, that the retailer had to notify the state that a purchased had taken place, otherwise how would they know you had bought tobacco? You could have bought a humidor for all they know.

I know this is the reason places will not ship cigarettes across state lines, as they have to be reported. It is not clear if cigars fall under that same category, but clearly some states do not care.

In terms of the use tax, if you buy anything online you are technically suppose to pay tax for it.

So the question is did NHC report the transaction to NJ or was it FedEx or someone else? I have heard of these things happening with Fedex in the past and it is based on how much the retailer indicates on the shipping notice. I have heard of some places putting less on the shipping notice because of this (not necessarily related to tobacco).

I guess that is the question. Has anyone asked Dan at NHC? I am not sure he would want to answer if it was a yes, but I would also think he would want to clear this up as well. I have bought from Dan several times, I think they are a great shop.

I have also bought from Israel and Uptown (even before he worked there) and they are a great shop as well.

[Stick]

Originally Posted by montecristo#2

I was under the impression, that the retailer had to notify the state that a purchased had taken place, otherwise how would they know you had bought tobacco? You could have bought a humidor for all they know.

It appears in at least one state that retailers are required to report the information to their state (Georgia), who then passed that information along to New Jersey. From this thread:

Originally Posted by BlueHavanaII

As FFX stated, I was the vendor. Tobacco taxes are not paid (or rebated) on out of state sales and I am required to file both a "Schedule C" in Georgia with the name of the purchaser and city, as well as the invoice, for all out of state sales. I have never heard of any states billing the consumer and wonder what it costs the state of NJ to go after this money (in this case, less than $30).

They also billed FFX for the sales tax. Has any else ever heard of a state go after intrastate sales tax on such a small amount?

In the future, I will make it clear that all taxes are the responsibility of the customer as all internet retailers do.

Jim

Originally Posted by BlueHavanaII

The state of Georgia sends the Schedule C information to NJ. I would also bet that this is a reciprocal agreement, so Georgia residents beware when buying from NJ!

Jim

[Cigary]

Originally Posted by PerpetualNoob

One thing they never explain, how the Hell is J. Random Smoker supposed to know the wholesale price of the cigars he buys?

F'N A right, bubba. So, now we all have to patrol our mailboxes for said Gov't agency to drop a little note in our files saying we are defrauding the USA of taxes, esp. when we pay on the avg. 30 taxes a month as it is. My oh my, we just aren't paying enough as it is so let's all get together and ask the gov't to raise all of the bailouts to 1 trillion dollars instead and let's give all of our tax money to entitlement programs leaving us, the middle class, with virtually no money, forclosed houses, higher credit card interest because the Credit Card companies can raise their rates anytime they see fit now. We should all just roll over and sing Kumbi Ya and things will be forever wonderful.

(rant over)

[montecristo#2]

Originally Posted by Stick

It appears in at least one state that retailers are required to report the information to their state (Georgia), who then passed that information along to New Jersey. From this thread:

Ahh, that makes sense.

I believe in CA they pay the tobacco tax up front, so if they sell out of state, they need to submit paperwork to get reimbursed. That paperwork probably has a name and address. So if CA wanted to send that information to the buyer's state they could.

I guess my next question, as a Buyer, should I know this information before I make a purchase?