I recently had an inspired thought that would allow webstores and other tobacconists to sell PACT controlled tobacco products domestically – without hiring an extra person to assure compliance with every aspect of the law. A very good friend of mine is a principal in a company TAG Employer Services. They provide data processing services in support of Human Resources, benefits administration and payroll functions. They have in place relationships with tax authorities and banks in all 50 states, plus a flexible software architecture that could be adapted assure accurate assessment and state tobacco taxes at the point of sale. Once a sale is finalized, the correct tax would be deposited electronically in the vendor’s account for the particular State wherein their customer resides. All filings and reconciliation of tax payments, plus required retention of records would be included in a subscription to this service. The whole process could be initialized with the addition of a few lines of code to most the shopping cart programs. TAG would provide any needed technical support from their Phoenix, AZ office during normal business hours. I am looking for a few US vendors interested in testing a beta version of the program. Anyone out there? Any comments?
This sounds like a good idea. Too bad Mr. Snuff and Nicotine Rush are already incurring the expense of moving over to Europe. This could have been the answer.
Does this save any money for anyone? Or just make the process easier. I thought the two business had moved to the UK to avoid taxes, similarly the suggestion of having orders sent to UK members for them to post on was designed to saver the hefty tax hikes?
I’m too busy with my own MASTER beta version. However do carry on as I’d be happy to pay whatever taxes and cover whatever costs of having you help me see to that.
@snuffster: tax avoidance was never really the issue (at least for me). The taxes are collected by the seller on behalf of the relevant authorities but at the end of the day are actually paid by the consumer. Just like VAT. The issue has always been the actual mechanics of compliance. It is, currently, too impossibly complex and hence expensive for any small company to contemplate. My understanding of things is you have to collect and remit the taxes BEFORE you can ship the product. It is very difficult to know who and how to pay since there are state, county and city taxes involved. Each state, county and city also applies the taxes differently: some on weight, some on wholesale price, some on retail price. On top of that they are demanding what I would consider private information: the name, address, telephone number, email address, date of birth, and product bought for every customer for every sale. Then of course there is the whole postage issue. UPS is the only one left who will even ship snuff, so after spinning our wheels to comply if they withdraw that service, there really is no feasible alternative.
At this rate it seems to me that legally selling snuff will soon become harder than smuggling heroin.
JakubM you don’t know anything at all about smuggling heroin, neither do I. I know enough to say the only thing wrong with your last statement is the words “it seems to me that”. Awesomely too with a low reward too. Though less jail time I hope. Seriously for all I know people are going to do more time for trying to sell snuff legaly and then messing up a step then they do for smuggling herion. Does anyone else think some laws are designed to be hard for people to understand almost as if they know they couldn’t really do what they want to sound like they are doing.
Revenuers are used to calling the shots in their own states because it’s easier for them to shut down an in-state business than one two time zones away. So they are used to making all kinds of unreasonable demands because they have huge power within those states. In my conversations with state revenue people I explain they will end up with no taxes at all if the process is made unreasonably difficult. I explain that to maximize revenue they must make it easier for sellers to comply. On another matter, I will never be a party to collecting personal information on behalf of a state’s department of revenue. It is a shame I got the inspiration for this too late in the game for Mr. Snuff and Nicotine Rush. But from what I understand they will maintain a wholesale operation here to provide snuff to US retailers. Wholesale transactions are exempt from the requirements of PACT. Bottom line - if our database is up and running at some future date, they could of course get back into retail internet sales with a minimum of fuss. Anyway, thanks for the comments. Will keep you informed as to my progress.
Lookie what I found. Not sure of the validity of the statements. Question 1: can private US citizens order such tobacco products from EU/Europe and have them imported to the US for private consumption? FDA currently does not require foreign tobacco manufacturers to register their establishments and submit product lists. While section 905(h) of the FFDCA requires foreign establishments to register “under regulations promulgated by the Secretary,” and section 905(i)(1) requires foreign registrants to file product lists, FDA has not promulgated foreign establishment registration regulations. Moreover, in its November 2009 Guidance for Industry: Registration and Product Listing for Owners and Operators of Domestic Tobacco Product Establishments, FDA specifically stated that an importer who does not own or operate a domestic establishment is not subject to the establishment registration or product listing requirements. Accordingly, a foreign manufacturer who does not own or operate a domestic establishment currently does not have to register or submit a product list. Such a company could sell tobacco products through delivery sales directly to U.S. citizens.http://www.snuson.com/forum/showthread.php?15584-Washinton-Lawyer-about-FDA-and-Pact-Act
Just a quick public apology to Mr Snuff; I was not suggesting tax dodging on their part (whatever ones views of that are), I meant to refer to the burden on the consumer and the whole process that this law seems to have landed you with. This seems to be an almost inpenetrably complex piece of legislation.