Thousands of untaxed cigarette cartons seized
Thousands of untaxed cartons of cigarettes were recently seized across the state, the Minnesota Department of Revenue announced today. Nearly 10,300 cartons containing 2 million cigarettes were seized between May 2009 and June 2010 by state and federal authorities.
State law requires that payment of the tax imposed on each pack of cigarettes must be verified with a corresponding value of stamps attached to each package. None of the cigarette packs in the cartons seized had the proper stamps. The unpaid state tax on the cigarettes is approximately $159,000 with an additional unpaid federal tax of $104,000.
Possession of untaxed cigarettes may result in criminal penalty for the buyer. Purchasing untaxed cigarettes from an unlicensed seller may result in criminal penalties for the reseller. Penalties could range from misdemeanors to felonies and buyers would be subject to tax, penalty and interest.
Most of the cigarettes were sold by American Internet sites but manufactured in Ukraine. In many cases, cigarettes sold over the Internet are counterfeit. Often times they are made in unsanitary facilities.
The seizure was in cooperation with US Customs and Border Protection and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Cigarette and Tobacco Tax Warning: Minnesotans owe taxes if they bought any untaxed tobacco or cigarette products online, by phone or through a mail order company and had them shipped in from out of state. State law requires payment of cigarette and tobacco taxes based on out-of-state purchases.
Minnesotans who purchase untaxed products that are shipped into the state must report the cigarette tax on the Consumer's Cigarette Tax Return (CT203) and the tobacco tax on the Consumer's Tobacco Tax Return (CT303). These forms can be found on our website at www.taxes.state.mn.us.
Cigarette and tobacco taxes not paid by the 18th of the month following the month of purchase are subject to interest and penalty.
The Minnesota Department of Revenue is dedicated to enforcing tax laws, collecting no more and no less than taxpayers owe. It takes progressively stricter measures against taxpayers who demonstrate that they will not voluntarily meet their obligations.
The Minnesota Department of Revenue has a 24-hour tip line for anyone who suspects an individual or business is violating tax laws, at (651) 297-5195 or 1-800-657-3500. Tipsters may remain anonymous and can also email the department at email@example.com.
Last year, citizen tips resulted in 88 percent of the department's criminal case referrals.
For more information, contact the department's Cigarette and Tobacco Unit at 651-297-1882.