CWNews
Utah Increases Taxes
Approved Bill Includes Floor Tax Provision
March 10, 2010 - Despite aggressive lobbying by the Cigar Association of America (CAA) and the entire tobacco industry, press releases and news articles, and a grassroots campaign, the Republican-dominated state legislature approved Senate Bill 259. SB259 increases all excise taxes on tobacco products: OTP from 35% to 86%, moist snuff from $.75 per ounce to $1.83 per ounce and cigarettes from $.70 to $1.70 per pack.
The approved legislation includes a floor stocks tax provision which means that tax-paid inventory in the state as of July 1, 2010 must be assessed an additional tax -- that being the difference between the old and the new tax rates. In the case of OTP that would be an additional tax of 51%. That tax must be paid by July 31, 2010.
The new OTP tax is assessed on the manufacturer's sale price, which means the amount the manufacturer charges after subtracting a discount. That price also includes an original Utah destination freight charge.
