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Louisiana to Tax Free Samples
Thomas Bender (TommyBB)
Editor-in-Chief
A recent phone call from a source and friend, representing cigar interests that will be at the International Premium Cigar and Pipe Retailers' show here in New Orleans next week, alerted me,other cigar media, and local interests about the state of Louisiana's tax law concerning tobacco. While already known, and codified by the legislature, it's still a stunning revelation that the state expects trade show exhibitors to pay taxes on "FREE SAMPLES."
Here is what they are expected to pay to the state of Louisiana for the SAMPLES THEY WILL GIVE AWAY. No retail or wholesale activities take place at the IPCPR Association show, ever. The manufacturers take orders for delivery over the next year and that's the extent of any "selling" on the show floor or behind closed doors, as it has been told to me, over the years. However manufacturers give a fair amount of samples to retailers, and reporter schlubs like me. It's how most of the "cigar world" learns about new additions, lines, brands for the year; and how smokers know what to expect and anticipate tasting in the coming days.
But the exhibitors must pay:
8% on cigars valued at less then $120 per 1,000 cigars
20% on cigars valued at more than $120 per 1,000 cigars....which is where most of the cigars GIVEN AWAY will be valued.
The tax will only be payable AT THE SHOW in check or CASH only.
THEN there's a 4% value tax paid on the excise tax. ALL of this is due on the number of cigars GIVEN AWAY at the show, the total value of the samples. This tax can be paid with the same check or cash.
To me, as a commentator, constituent and citizen of Louisiana, this is beyond ridiculous, it's corrupt on its face, and payable only in check or cash, there's even more chance of corruption and robbery. Something needs to be done about this. Not only is this in my interest as "cigar media" and a smoker who loves to go to the show, but as I've stated, this 5,000+ member organization and show is a nice boost for the local economy in a slow period of the year. There's no better deterrent to business than unreasonable taxation, and that applies across all industries, sectors and jurisdictions, not just Louisiana or New Orleans.
It seems that this group LIKES New Orleans, but we'll drive them away to Las Vegas permanently if we keep this up.
I think most members and retailers don't mind paying taxes (as much) on retail activities when they're bringing in sales and revenue directly. But to have to PAY TO GIVE AWAY MERCHANDISE is ludicrous.
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