Expert: Bill Finck Jr. - 9/7/2009

Question
Hi Bill
I wanted to purchase a box (24) of Acid Cigars (kuba kuba) at a local shop here in Southern California. They sell me the box for around $190. I have looked online and I can purchase the same box for $120. I was told by the shop owner that if I purchase them online, I will later receive a bill from the US Gov to pay the tobacco taxes due. Is this true or his he just trying to make the sale? Is it a good idea to by online? Is there a chance they will not be fresh?
Thanks
Jim

Answer
Jim,

State excise tax on tobacco, just like sales tax, are due to the state regardless of where you buy the cigars. If you buy out of state, the company you buy from likely won't collect the CA excise tax from you and won't pay the state. They are not required to do either unless they have nexus in your state. Assuming they don't, it is up to you to report the purchase and pay the tax. I know that some states are requesting shippers to notify the state if tobacco is shipped in so that they can follow up with the purchaser and make sure the excise tax is paid. If you get a bill, it won't be from the US government, but from the state of California.

As long as you are buying from a reputable dealer, there is nothing wrong with buying on line. You just have to be careful that you are buying from an honest source - one with a humidor... and not some guy selling cigars out of his garage.

Hope this helps.
Bill