STATE TAXATION – TOBACCO AND VAPORS PRODUCT TAX
Tax Court: Barrister Cigars, LLC v. Dir., Div. of Taxation, Docket No. 009089-2022; opinion by Sundar, P.J.T.C., decided April 1, 2025. For plaintiff - Matthew D. Lee, Esq., Jonathan M. Wasser, Esq. (Fox Rothschild, LLP, attorney); for defendant - Michael J. O’Malley, Deputy Attorney General (Matthew J. Platkin, Attorney General of New Jersey, attorney).
Held: Plaintiff, a retailer but also a “distributor” as that term is defined by the Tobacco and Vapors Product Tax (“TPT”) Act (“TPT Act”), is not barred from using the “wholesale price” as the base for computing its TPT liability simply because it does not purchase tobacco products directly from the manufacturer. However, because “wholesale price” is statutorily defined as the “actual price for which a manufacturer sells tobacco products to a distributor,” plaintiff cannot use estimates provided by its suppliers as the base for computing its TPT liability. Plaintiff should be given an opportunity at trial to prove the “wholesale price” of its tobacco purchases for the tax years at issue with objective and credible evidence. Therefore, the court denies both parties’ summary judgment motion on this issue.
In addition, there is no statutory authority for a distributor to deduct estimated federal excise tax from the tax base. Therefore, the court grants defendant’s summary judgment on this issue.
(29 Pages)