Over the past few years, taxpayers throughout Florida have been in a never ending battle with the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (“ABT”). At the forefront is the Micjo issue. Micjo was a case that determined that Florida wholesale tobacco tax should not apply to the full invoice. Rather, the 85% should only apply to the tobacco while charges and items such as federal excise tax and shipping should not be included in the taxable base. There are 8 pending cases throughout Florida being litigated on this issue. In addition, there are two cases in which the taxpayer has argued that blunt wraps, or cigar wraps, are not included in the tobacco products definition and, are therefore, not taxable. In Brandy’s, a taxpayer received a favorable ALJ opinion spelling out the same.
In response, ABT has attempted to change Florida law. Specifically in Senate Bill 7074, ABT is attempting to fix the Micjo opinion and change the taxable base to include the full price paid by the distributor, including the federal excise tax. The amended law will read as follows:
“Wholesale sales price” means the sum of paragraphs (a) and (b): (a) The full price paid by the distributor to acquire the tobacco products, including charges by the seller for the cost of materials, cost of labor and service, charge for transportation and delivery, the federal excise tax, and any other charges, even if the charge is listed as a separate item on the invoice paid by the established price for which a manufacturer sells a tobacco product to a distributor, exclusive of any diminution by volume or other discounts, including discount provided to a distributor by an affiliate. (b) The federal excise tax paid by the distributor on the tobacco products, if the tax is not included in the full price under paragraph (a).
Multi-State Tax Law Blog
