Legal Question

[jbo]

I'm new to this forum and have enjoyed the discussions a great deal. I actually joined because I wanted to see what you guys thought of the different online cigar stores and gained a lot of good information from you. However, one thing has kept me from ordering. My local dealer told me a story about a man who was sent a bill from the state to the tune of $4850 to pay the state tax on cigars he had purchased from Thompsons. (After consulting an attorney, this amount was cut in half.) He said that it wasn't Thompson that supplied the record of his purchases, it was UPS and they judged it based on the weight of all the packages he had received from the cigar store.

Now, this sounds off the wall to me...but I hate to doubt anyone's word when I don't know. Does this sound like something the state could do? Also, I noticed in the fine print of some of the stores I have looked at that they say that state taxes are the responsibility of the purchaser. How does one go about paying taxes on cigars that you bought from an out of state store?

Thanks for your help.

[brian]

Wow that'd be a major bummer if it did happen, unfortunately I don't know if it could or not...
That guy must've ordered half Thompsons inventory though lol.

[jbo]

Wow that'd be a major bummer if it did happen, unfortunately I don't know if it could or not...
That guy must've ordered half Thompsons inventory though lol.

Brian...thanks for the reply. Supposedly this was for years of purchases. (You'd think the statute of limitations would kick in at some point.) Also, how does the gov't not know that this guy might have been buying humidors or lighters? (On the other hand, maybe it doesn't matter). Thanks again for helping this newbie...it really does slow me down from buying off the net, although, there are some cheaper bundles that I'd like to buy that aren't available around here.

[hex1848]

That sounds like a rumor a local tobacconist started to keep people from shopping online....

[hex1848]

Here is a thread on CA about this very thing:

http://forums.cigaraficionado.com/ev...75/m/805101563

My favorite post is this one:

Don't you own your local B&M?


B.A.S.E. Secretary and #0013 <(0)>
R.O.C.A #14
Foreign Affairs Minister - BS

Apparently CI did a story on this:

We did a story on this in a recent Cigar Insider, and had a smaller piece on the web.

We're working on a follow up regarding a development that happened last week, which will appear in Tuesday's Cigar Insider.

Anyone have access to Cigar Insider and can share some info?

[jbo]

That sounds like a rumor a local tobacconist started to keep people from shopping online....

I was thinking this same thing...It's not above my friend to tell tall tales...but this one struck a chord with me because I didn't want a bill coming to my door. However, after having read the other posts, it makes me wonder if there isn't something to it. I wonder if there is a "magic" amount that would trigger the government's interest. After all, it does seem to be a rare occurance.

Thanks to everyone for their help.

[nhcigarfan]

After reading those links I once again am happy to live in the "Live Free or Die" state of New Hampshire. No cigar tax, and none of this bull shit.

Wooo Hooo

[hex1848]

When you want to know the answer to something, speak with someone at the company that the rumor is about. I called Thompson’s and got transferred a few times and ended up at someone’s voicemail box. I’m pretty persistent. Let’s see if I get a reply.

Usually people would want to squash a rumor if it isn't true.

[nhcigarfan]

I'll go out on a limb here and say that story is false. If it was true then everyone who smokes would have to carry around a reciept for the product at all times showing where they purchased and if tax was paid. Even if the guy lived in the same state as the retailer, I believe the responsibility to collect falls on the retailer.

That being the case, out of country purchases are handled differently with federal tax.

[jaewing]

I would fight this.

First of all you should not have to prove a negative (that you didn't order cigars) by providing invoices of your purchases. They should have to prove that a tobacco purchase was made and that such a purchase was subject to a tax and that you failed to pay that tax.

Second, unless Thompsons (or any other online retailer) sent them copies of all of your purchases there would be no way to prove that you had actually purchased tobacco since most of these online stores sell non-tobacco products as well. Basing the tax on the weight of the package is pure BS . . . I knew I should not have ordered that marble ashtray.

Third there is a statute of limitation in most states for collection of taxes. I am not a tax attorney but I believe that here in the Tobacco Nazi Regime of California it is 10 years from the assessment of the tax.

I would be very interested to see where this goes.

[jbo]

I would fight this.

First of all you should not have to prove a negative (that you didn't order cigars) by providing invoices of your purchases. They should have to prove that a tobacco purchase was made and that such a purchase was subject to a tax and that you failed to pay that tax.

Second, unless Thompsons (or any other online retailer) sent them copies of all of your purchases there would be no way to prove that you had actually purchased tobacco since most of these online stores sell non-tobacco products as well. Basing the tax on the weight of the package is pure BS . . . I knew I should not have ordered that marble ashtray.

Third there is a statute of limitation in most states for collection of taxes. I am not a tax attorney but I believe that here in the Tobacco Nazi Regime of California it is 10 years from the assessment of the tax.

I would be very interested to see where this goes.

First, thanks to all who have responded. I'm probably repeating myself, but here's what I was told:

It was UPS that provided the information. They didn't know what was in the packages they delivered, all they knew is that it was from Thompsons and the gov't assessed the tax upon the weight. When the guy's attorney asked them, "How do you know the packages didn't contain non tobacco products, like lighters or humidors?" The answer came back, "It doesn't matter." (Sounds a little like, "You have to prove your innocent.") However, in at least one on line store, there is a blip on one of the pages...in small print...that says the buyer is responsible for any taxes, etc.

I received an email from Atlantic today in regards to a question I sent a few days ago. It said, and I'm quoting: "We have a confidentiality agreement with all our customers. The states can ask for information about, but legally we do not have to provide it. You should
be fine ordering cigars online. I have not heard of anyone having any problems and we ship quite a bit to AK.

I'm still hoping that this was a rumor, but it's beginning to look like it is a rare, but possible scenario.