New Importer and Wholesaler

Hello everyone,

I am coming here in hopes that I can receive a little help in regards to a few questions I have about applying for my Federal Tobacco Import License.

A little background, my fiances father lives in the Dominican Republic and owns a small cigar factory there where they made premium hand rolled cigars. I have just moved to Las Vegas for my job and we have decided to import and wholesale his cigars to local businesses and casinos/hotels here in town.

My first question is this; if I receive my Federal Tobacco Import license do I also need to apply for a wholesale license? Or does the import license allow me to do both?

Second; where can I find information on the taxes I will have to pay on both importing and wholesaling cigars?

Third, does anyone here have any imput, advice, suggestions or general knowledge they wouldnt mind taking the time to share with me? This is a whole new field for me but I love the idea and have a passion for it, so I am going to work very hard to try and make it successful.

Thank you

You gotta help us a tad... Were you looking to the membership to help you set up a cigar import and distribution complete turnkey operation, or were these more general "kick the tires" kind of questions?

Generally, Here's where you apply for import licensing:

http://www.ttb.gov/ponl/permits-online.shtml

You will also find resources for researching the federal taxes associated with the sale of tobacco in the US

...i'll leave the question of a distribution network in the US for your cigars to the other members, though I know it's not something that can be easily be answered.

I can figure out the distribution network here, and I am not asking for you guys to do my job for me (although there would be a few custom cigars it in for you if you did lol)

I am just trying to figure out the legal side of things now, the licenses, permits, taxes, regulations, ect...

So anything that you guys can tell me that would help point me in the right direction would be greatly appreciated

You will need licensing as a seller of "other tobacco products" as cigars are classified. There are both state and federal requirements, though I believe that most work is required at the state level. Where I live I would have to post sales tax bonds, among other things.

Good luck. You are entering a very competitive marketplace, so be sure to invest in a helmet.

So with an import license I can ONLY import tobacco products? I cannot sell them to anyone without a sellers/wholesale license?

Cause I am receiving what seems like conflicting information from other sources. Some say the Import license allows someone to wholesale and others say I need a wholesale license. However the import and wholesale license is exactly the same, you just mark a box on the top if you are either doing one or the other (so would I mark both?).

Also, as far as taxes are concerned, would it be a smarter idea to be a LLC? Or would I receive easier taxes by being a corporation on a federal level?

Quote:

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Originally Posted by Demarcation

So with an import license I can ONLY import tobacco products? I cannot sell them to anyone without a sellers/wholesale license?

Cause I am receiving what seems like conflicting information from other sources. Some say the Import license allows someone to wholesale and others say I need a wholesale license. However the import and wholesale license is exactly the same, you just mark a box on the top if you are either doing one or the other (so would I mark both?).

Also, as far as taxes are concerned, would it be a smarter idea to be a LLC? Or would I receive easier taxes by being a corporation on a federal level?

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You don't know the difference between a "limited liability company" and a "corporation"? Oh, boy...

Take this advice for what it's worth...

It's not wise to seek counsel on an Internet forum with something this important to your business. You can either school yourself up at a local community college or hire someone COMPETENT enough (e.g. an attorney) to walk you through the advantages/disadvantages (hint: it goes beyond the question of any tax advantages and very much depends on your personal situation and others that will be in your company). This decision will be the cornerstone of your business plan.

Speaking of which... Have you drafted a solid business plan? I suspect not, but you'll definitely need one if you ever intend to seek capital in any form.

...and that's just the beginning... What accounting method will you be using - cash-basis or accrual? It's best to start with the right one for your business, rather than switch once you've began your accounting ledgers. And there are advantages/disadvantages to each - especially when it comes to paying taxes.

I'm not trying to discourage you, but based on some of your comments I believe you've got quite a bit of work ahead of you BEFORE you even think about obtaining licensing and permits. Your business success really depends on it

Good luck!