Cigarette Tax

[jata66]

What is the name of your state (only U.S. law)? CT
I was sent a cigarette tax bill in 2011 for cigarettes purchased in 2006. I have been charged over 100% of the orginal tax amount for penalty and interest. It is unconscionable that they charge that much and I question the legality. Can they do that? I intend to pay the original tax amount but I am contesting the penalty and interest charges. Do I have a case?

 

[justalayman]

If the state law allows for such penalties, it is legal until challenged in court and defeated. Are you going to be the guy that attempts to do that?

 

[FlyingRon]

The unconscionable part is that you dodged paying the tax when you made the purchase. Most likely the cost of collecting for the scofflaws is entirely justified.

 

[Free_Advice]

I make my own cigs now due to the high taxes . I don't like these administrative means to take your money.

They get information from SELLERS who break the law and take their word as gold that you purchased from them.

If you wish to contest, you must contest EVERYTHING not just the penalties.

Have they provided you with the evidence against you? They should and then you can make a decision of what to do.

And from 2006??? is the SOL past on this?? I would check this out.

If you speak to them do not admit anything at this point.

I believe that a CT 1040 entry into the USE TAX line would cover the cig tax & a use tax SOL I think is THREE YEARS... so this is what I would be seriously checking out.

 

[FlyingRon]

I believe that a CT 1040 entry into the USE TAX line would cover the cig tax & a use tax SOL I think is THREE YEARS... so this is what I would be seriously checking out.

Sorry FA, but the collections on unpaid taxes is 15 years.
The reports of the sellers is plenty of justification to issue the bill.

 

[davew128]

I make my own cigs now due to the high taxes . I don't like these administrative means to take your money.

They get information from SELLERS who break the law and take their word as gold that you purchased from them.

Please put the broom stick back in your rectum so that you can stop talking out of it. Exactly what lie is being espoused by the seller here?

And from 2006??? is the SOL past on this?? I would check this out.

If no return was filed, the SOL never starts. Moreover, even if a zero had been put there, that constitutes fraud and you get the same result.

If you speak to them do not admit anything at this point.

Ordinarily good advice but in this instance ultimately moot since more than sufficient evidence exists to assess the tax.

I believe that a CT 1040 entry into the USE TAX line would cover the cig tax & a use tax SOL I think is THREE YEARS... so this is what I would be seriously checking out.

Little late for that since OP has already been assessed.

 

[Free_Advice]

Sorry FA, but the collections on unpaid taxes is 15 years.
The reports of the sellers is plenty of justification to issue the bill.

The OP has not had a judgment against him. So I think the SOL applies per Use Tax reporting on CT 1040.

Its something he should check out.

 

[FlyingRon]

The OP has not had a judgment against him. So I think the SOL applies per Use Tax reporting on CT 1040.

Its something he should check out.

Actually, it's not the use tax but the explicit cigarette tax. It's explicitly on him to see that the packs have the tax stamp or otherwise pay the tax. Now if this wasn't the case of "a wilfully false or fraudulent return with intent to evade the tax" the state would indeed be enjoined from trying to collect after three years. That's explicitly called out in the statute. Surely they will argue that the evasion was a willfull attempt to evade the tax. That is not so time limited.

 

[Free_Advice]

Actually, it's not the use tax but the explicit cigarette tax. It's explicitly on him to see that the packs have the tax stamp or otherwise pay the tax. Now if this wasn't the case of "a wilfully false or fraudulent return with intent to evade the tax" the state would indeed be enjoined from trying to collect after three years. That's explicitly called out in the statute. Surely they will argue that the evasion was a willfull attempt to evade the tax. That is not so time limited.

The state may have problems if the proof of being knowingly trying to evade the tax ... they would have to prove that he did not buy the online smokes just for a good price, not to avoid paying taxes.

I'm sure the OP does not even know what taxes are applied to smokes. I make my own cigs for my personal use due to the high tax.

Has anyone seen the case in federal court in Ohio about the ryo shops? Looks like the businesses just "rent" out their machines ... I think ATF is on thin ice on this one; but hey, its cigs & the feds might just make some piss poor case law because of it.

 

[FlyingRon]

The state may have problems if the proof of being knowingly trying to evade the tax ... they would have to prove that he did not buy the online smokes just for a good price, not to avoid paying taxes.

Nope, not going to fly. The statute is quite clear. You need to look for the tax stamp and if it isn't there you have to do it yourself.

I'm sure the OP does not even know what taxes are applied to smokes. I make my own cigs for my personal use due to the high tax.

Doesn't matter.

Has anyone seen the case in federal court in Ohio about the ryo shops? Looks like the businesses just "rent" out their machines ... I think ATF is on thin ice on this one; but hey, its cigs & the feds might just make some piss poor case law because of it.

Ohio has absolutely no bearing on this at all.

 

[davew128]

The state may have problems if the proof of being knowingly trying to evade the tax ... they would have to prove that he did not buy the online smokes just for a good price, not to avoid paying taxes.

They don't have to prove a thing. They've already assessed the tax.

As for the SOL, unless the OP actually put a zero or positive number on the use tax line of their CT-1040, the SOL never started. Any questions? No? Good. Now shut up.

 

[Free_Advice]

Sec. 12-316. Imposition of tax. A tax is hereby imposed at the rate of one hundred fifty mills for each cigarette upon the storage or use within this state of any unstamped cigarettes in the possession of any person other than a licensed distributor or dealer, or a carrier for transit from without this state to a licensed distributor or dealer within this state. Any person, including distributors, dealers, carriers, warehousemen and consumers, last having possession of unstamped cigarettes in this state shall be liable for the tax on such cigarettes if such cigarettes are unaccounted for in transit, storage or otherwise, and in such event a presumption shall exist for the purpose of taxation that such cigarettes were used and consumed in Connecticut.


The state would need to prove that the OP had the last possession of the unstamped smokes. The OP may have given these smokes away or sold them, I don't know.

 

[Free_Advice]

Also, how does the state know that stamps were NOT on the cigarette package??

I would fight this ....

 

[Free_Advice]

Sec. 12-309. Taxpayers to keep records; commissioner may examine. Assessment of tax deficiency. Penalty and interest for failure to pay tax when due. Lien against real estate for state tax. Foreclosure procedure. (a) Each distributor and each dealer shall keep complete and accurate records of all cigarettes manufactured, produced, purchased and sold. Such records shall be of such kind and in such form as the Commissioner of Revenue Services may prescribe and shall be safely preserved for three years in such manner as to insure permanency and accessibility for inspection by the commissioner and his authorized agents. The commissioner and his authorized agents may examine the books, papers and records of any distributor or dealer in this state for the purpose of determining whether the tax imposed by this chapter has been fully paid, and may investigate and examine the stock of cigarettes in or upon any premises where such cigarettes are possessed, stored or sold for the purpose of determining whether the provisions of this chapter are being obeyed.....

If the state is looking at out-of-state records, then THEY have just violated the law...the legislature gave them no such authority...

 

[Proserpina]

I would fight this ....

And you'd lose.