Changes in Alabama’s Tobacco Tax Law Seek to Curb
Evasion
Alabama Tobacco Tax Law Changes
Effective Oct. 1, 2014
Montgomery, June 30, 2014—The
Alabama Department of Revenue (ADOR) recently notified Alabama tobacco
wholesalers and retailers of several significant changes in Alabama’s tobacco
tax law that will become effective later this year.
“During the 2014 legislative session, Act 2014-262 was
passed which established a new category for filtered cigars, removed references
to retail selling price of cigars, eliminated rates that were no longer used on
cigars, as well as refined the reporting requirements of all tobacco
wholesalers and retailers,” explained State Revenue Commissioner Julie P.
Magee. “The changes made by Act 2014-262
will benefit the industry on the whole, but will certainly make it harder and
more difficult for unscrupulous individuals to evade tobacco taxes,” added
Magee.
The provisions of Act 2014-262 will become effective Oct. 1,
2014.
Specifically, the new law establishes a separate category
and tobacco tax rates, based on weight per thousand, for “filtered” cigars,
ranging from $0.04 per ten cigars weighing three pounds or less per thousand to
$0.015 each for filtered cigars weighing more than three pounds per thousand. The rate for all other cigars will remain at $0.0405
per cigar or $40.50 per thousand.
Rates for cigarettes and other tobacco products are not affected
by Act 2014-262.
In addition to the modifications for cigars, the new law
also provides several new reporting requirements and changes in how tobacco
wholesalers and retailers report state and local tobacco taxes, as well as
tougher enforcement provisions related to unreported tobacco tax and contraband
products.
“All of these reporting changes will help address tobacco
tax evasion in Alabama,” said Magee.
“Over the last several years, the department has ramped up its efforts
to combat this growing problem that seems to be affecting all states, not just
Alabama. We have worked with industry
leaders and trade associations in our state to come up with ways to confront
this problem head-on, without imposing unrealistic recordkeeping burdens upon Alabama’s
tobacco wholesalers and retailers,” said Magee.
Notices were sent to all Alabama tobacco wholesalers and retailers
of record earlier this month, according to Magee, informing them of the
important law changes that will affect their reporting and recordkeeping
responsibilities. View a copy of the
NOTICE at http://revenue.alabama.gov/tobaccotax/amendment-tt-262.cfm.
For more information about Alabama’s tobacco taxes, log onto
ADOR’s website at www.revenue.alabama.gov
and click on http://revenue.alabama.gov/tobaccotax/.
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Media contact for
more information: ADOR Media Affairs
Office: Carolyn Blackstock: (334)
242.1390