Getting F*!&@%# By Evading Taxes And Selling Tobacco To Minors

[dehgo]

So how can a vendor tell if some is over 18 when we can not see them and physically check the ID of the person buying over the internet? What happens when someone manages to buy from you who is not over the age of 18 using dads, moms perhaps brother or other family members credit card to make the purchase? Finally who pays the taxes due when the Items are purchases between states?

[liquidglass]

why do you ask?

[dehgo]

why do you ask?

I was told that the customer has to pay the taxes. The vendor gives the government the contact information and they are taxed at some point in time. Has this happened to anyone?

[cotsi95]

Unless you have a tobacco sale license you dont have to pay taxes, the wholesaler/ vendor does. If you do have a tobacco license then you have to pay taxes which varies state to state. In Colorado it is 40% of the purchase price. IE I buy say 100 dollars worth of shisha from a wholesaler I owe the state 40 dollars in taxes. Thus why local prices are much higher then internet prices.

[mushrat]

I take it you own the site you formerly had listed in your profile?

[dehgo]

I take it you own the site you formerly had listed in your profile?

Yes, I do own the site. I want to know if anyone has personal experience with any tax trouble or selling to a minor unintentional. I would like the insight to filter out the BS versions I have been getting about the laws from different websites.

[Charley]

I cant tell you how taxes work everywhere but here in Indiana its supposed to be up to the customer. when we buy tobacco on the internet we are supposed to get a form from the state to declare it so they charge us the taxes. (I am not a vendor this is just what I as a customer am supposed to do.)

but other than that I know nothing at all.

[Dr. B]

the consumer is supposed to pay the state the sales or other applicable tax on items purchased.

[r1v3th3ad]

woops, looks like I've been cheating the gov. for a few years...fuck em, they get enough of my money, I'm not reporting my shisha purchases

[Arcane]

wait...seriously? i'm supposed to be claiming all the stuff i purchase? uhhhhh...damn, i don't even want to think about how much i'd owe...

[r1v3th3ad]

wait...seriously? i'm supposed to be claiming all the stuff i purchase? uhhhhh...damn, i don't even want to think about how much i'd owe...

so you're with me on saying fuck the gov.?

[Sonthert]

Hey Paul!

The Constitution of the United States of America, the greatest document in living human history, protects us. It specifically says that there shall be no taxes on interstate trade, States don't have the right to charge taxes to people in other states. There are two distinctions, one is end user and non-end user. When LiquidGlass buys tobacco in North Carolina, one of two things is true. He either bought it in North Carolina and that sale is subject to North Carolina state excise taxes or he bought it from elsewhere and that sale cannot be taxed by North Carolina. Therefore, LiquidGlass buys hookah tobacco from somebody in Georgia, there are no applicable sales or excise taxes. Technically, if a person sells hookah tobacco to someone else (or transfers money for the purposes of transaction) when that tobacco was the subject of interstate trade, that transaction now constitutes intrastate trade and excise taxes would be due on it. They could be prosecuted for selling tobacco without a retailers license and selling Excise tax-unpaid products. So if LiquidGlass bought tobacco from Hookah Company (it is 99% likely North Carolina excise tax unpaid because it doesn't have to be) and then sold it to Mushrat (also in North Carolina...sorry Mushrat, you're the only other name in North Carolina I could think of. Mushrat does hold the proper license for tobacco transactions, I assure you), they are each committing crimes. Each for trafficking, additionally Liquid Glass for selling tobacco without a license. If LiquidGlass sold the tobacco to Dr. B in Texas, then nothing is wrong. Why you are paying shipping twice, I don't know. Dr. B should just order it from Hookah Company himself. If LiquidGlass sold it to me, who is in California, since the product was tax-paid in California, the end result is the tobacco went from California to California, so excise taxes (which were already paid) are applicable. It is permissible in some (all?) states for a distributor in one state to buy excise tax-unpaid product from another distributor...in another state. It is also permissible in some states that have mixed systems (The supplier is in a three tiered system and the purchaser is in a four tiered system) for the supplier to get a refund for tax paid product from their state since it is being sold interstate and those excise taxes are no longer due, since the transaction is not taxable. I'm a little hazy on specifics on these cases...essentially if excise tax is paid in one state, but that tobacco is sold interstate, not intrastate, then the excise taxes are refundable. That being said, its usually ignored by the companies transacting the business and the supplier's state gets money that they are not technically entitled to. Pennsylvania is a different case. There are no excise taxes in Pennsylvania (Formerly New Hampshire, too). Pennsylvania has use taxes on all products, equally (except food?). It is also illegal to sell tobacco to an end user in Utah, Montana and Washington from another state to avoid all the confusing interstate restrictions and tax avoidance. In Utah, Montana and Washington, end users can only buy tobacco products from a retailer in the state they live in.

There are three and four tiered systems of taxation:

Four Tier system (like California)
Manufacturer
Distributor
Wholesaler
Retailer
(End User/consumer)

Three Tier systems
Manufacturer
Distributor/Wholesaler
Retailer
(End User/Consumer)

Two Tier systems
Manufacturer
Distributor/Wholesaler/Retailer
End User

Taxes are generally paid by the distributor. Wholesalers and retailers would then only trade in tax paid product. With only a few exceptions, retailers aren't allowed to buy tax-unpaid products. In Virginia, I believe retailers are allowed to pay excise taxes on products they receive that aren't excise tax paid.

To put it short, my friend, your question in the State of California is non-sequitur. A retailer who would be selling to end users (one of which could be a minor) could only be selling tax-paid product. They would not be selling tax unpaid product. A wholesaler would not be selling to an end user (otherwise they would be a retailer) and would not have tax-unpaid product to begin with (in a four tiered system). A distributor, who would have tax unpaid product couldn't possibly be selling it to a minor, they would only be selling tax-paid product to a wholesaler (a legitimate company), which couldn't be a minor to begin with. So, a minor could only buy tobacco products from a retailer who only has tax-paid products. A wholesaler can't sell to an end user. This is bundled up into the cost of the product, it is not separable below the level of the distributor, it is a part of the cost the same way shipping would be. So, all taxes are due if product is sold to minor, since they are already paid. It is possible and permissible from retailers to buy directly from distributors, but its often not the case, in a four tiered system. Thats why several states have three tiered systems to begin with.

I should caution you: selling tax-unpaid products is quite serious; they like to call it trafficking, it is a felony. There should be no way a minor gets tax-unpaid tobacco product. It would be a double threat: in addition to the penalties associated with selling to minors. The felony would be the bigger problem. If a company is suspected of trafficking, I would imagine the Board of Equalization would suspend the license of the party in short order. So, if a minor had bought tax-unpaid tobacco and the authorities found out about it, it would be quite serious. If it were a retailer or a wholesaler, doubly so Selling excise tax-unpaid product and selling to a minor. if it were a distributor, triply so (one for selling to an end user, one for selling to a minor and one for knowingly selling excise tax-unpaid product to an entity not possessing a distributor's license).

Hopefully this answers your question.

[Dr. B]

Dont freak out guys, I was only referring to the disparity between tax rates in different states:specifically sales taxes Edited November 19, 2009 by Dr. B

[r1v3th3ad]

Hey Paul!

The Constitution of the United States of America, the greatest document in living human history, protects us. It specifically says that there shall be no taxes on interstate trade, States don't have the right to charge taxes to people in other states. There are two distinctions, one is end user and non-end user. When LiquidGlass buys tobacco in North Carolina, one of two things is true. He either bought it in North Carolina and that sale is subject to North Carolina state excise taxes or he bought it from elsewhere and that sale cannot be taxed by North Carolina. Therefore, LiquidGlass buys hookah tobacco from somebody in Georgia, there are no applicable sales or excise taxes. Technically, if a person sells hookah tobacco to someone else (or transfers money for the purposes of transaction) when that tobacco was the subject of interstate trade, that transaction now constitutes intrastate trade and excise taxes would be due on it. They could be prosecuted for selling tobacco without a retailers license and selling Excise tax-unpaid products. So if LiquidGlass bought tobacco from Hookah Company (it is 99% likely North Carolina excise tax unpaid because it doesn't have to be) and then sold it to Mushrat (also in North Carolina...sorry Mushrat, you're the only other name in North Carolina I could think of. Mushrat does hold the proper license for tobacco transactions, I assure you), they are each committing crimes. Each for trafficking, additionally Liquid Glass for selling tobacco without a license. If LiquidGlass sold the tobacco to Dr. B in Texas, then nothing is wrong. Why you are paying shipping twice, I don't know. Dr. B should just order it from Hookah Company himself. If LiquidGlass sold it to me, who is in California, since the product was tax-paid in California, the end result is the tobacco went from California to California, so excise taxes (which were already paid) are applicable. It is permissible in some (all?) states for a distributor in one state to buy excise tax-unpaid product from another distributor...in another state. It is also permissible in some states that have mixed systems (The supplier is in a three tiered system and the purchaser is in a four tiered system) for the supplier to get a refund for tax paid product from their state since it is being sold interstate and those excise taxes are no longer due, since the transaction is not taxable. I'm a little hazy on specifics on these cases...essentially if excise tax is paid in one state, but that tobacco is sold interstate, not intrastate, then the excise taxes are refundable. That being said, its usually ignored by the companies transacting the business and the supplier's state gets money that they are not technically entitled to. Pennsylvania is a different case. There are no excise taxes in Pennsylvania (Formerly New Hampshire, too). Pennsylvania has use taxes on all products, equally (except food?). It is also illegal to sell tobacco to an end user in Utah, Montana and Washington from another state to avoid all the confusing interstate restrictions and tax avoidance. In Utah, Montana and Washington, end users can only buy tobacco products from a retailer in the state they live in.

There are three and four tiered systems of taxation:

Four Tier system (like California)
Manufacturer
Distributor
Wholesaler
Retailer
(End User/consumer)

Three Tier systems
Manufacturer
Distributor/Wholesaler
Retailer
(End User/Consumer)

Two Tier systems
Manufacturer
Distributor/Wholesaler/Retailer
End User

Taxes are generally paid by the distributor. Wholesalers and retailers would then only trade in tax paid product. With only a few exceptions, retailers aren't allowed to buy tax-unpaid products. In Virginia, I believe retailers are allowed to pay excise taxes on products they receive that aren't excise tax paid.

To put it short, my friend, your question in the State of California is non-sequitur. A retailer who would be selling to end users (one of which could be a minor) could only be selling tax-paid product. They would not be selling tax unpaid product. A wholesaler would not be selling to an end user (otherwise they would be a retailer) and would not have tax-unpaid product to begin with (in a four tiered system). A distributor, who would have tax unpaid product couldn't possibly be selling it to a minor, they would only be selling tax-paid product to a wholesaler (a legitimate company), which couldn't be a minor to begin with. So, a minor could only buy tobacco products from a retailer who only has tax-paid products. A wholesaler can't sell to an end user. This is bundled up into the cost of the product, it is not separable below the level of the distributor, it is a part of the cost the same way shipping would be. So, all taxes are due if product is sold to minor, since they are already paid. It is possible and permissible from retailers to buy directly from distributors, but its often not the case, in a four tiered system. Thats why several states have three tiered systems to begin with.

I should caution you: selling tax-unpaid products is quite serious; they like to call it trafficking, it is a felony. There should be no way a minor gets tax-unpaid tobacco product. It would be a double threat: in addition to the penalties associated with selling to minors. The felony would be the bigger problem. If a company is suspected of trafficking, I would imagine the Board of Equalization would suspend the license of the party in short order. So, if a minor had bought tax-unpaid tobacco and the authorities found out about it, it would be quite serious. If it were a retailer or a wholesaler, doubly so Selling excise tax-unpaid product and selling to a minor. if it were a distributor, triply so (one for selling to an end user, one for selling to a minor and one for knowingly selling excise tax-unpaid product to an entity not possessing a distributor's license).

Hopefully this answers your question.

So I'm not breaking the law then?

[dehgo]

Now that's an answer thanks! Eric, I sold Cairos to relatives of Starbuzz family . I will stop by soon and tell you about it.

Hey Paul!

The Constitution of the United States of America, the greatest document in living human history, protects us. It specifically says that there shall be no taxes on interstate trade, States don't have the right to charge taxes to people in other states. There are two distinctions, one is end user and non-end user. When LiquidGlass buys tobacco in North Carolina, one of two things is true. He either bought it in North Carolina and that sale is subject to North Carolina state excise taxes or he bought it from elsewhere and that sale cannot be taxed by North Carolina. Therefore, LiquidGlass buys hookah tobacco from somebody in Georgia, there are no applicable sales or excise taxes. Technically, if a person sells hookah tobacco to someone else (or transfers money for the purposes of transaction) when that tobacco was the subject of interstate trade, that transaction now constitutes intrastate trade and excise taxes would be due on it. They could be prosecuted for selling tobacco without a retailers license and selling Excise tax-unpaid products. So if LiquidGlass bought tobacco from Hookah Company (it is 99% likely North Carolina excise tax unpaid because it doesn't have to be) and then sold it to Mushrat (also in North Carolina...sorry Mushrat, you're the only other name in North Carolina I could think of. Mushrat does hold the proper license for tobacco transactions, I assure you), they are each committing crimes. Each for trafficking, additionally Liquid Glass for selling tobacco without a license. If LiquidGlass sold the tobacco to Dr. B in Texas, then nothing is wrong. Why you are paying shipping twice, I don't know. Dr. B should just order it from Hookah Company himself. If LiquidGlass sold it to me, who is in California, since the product was tax-paid in California, the end result is the tobacco went from California to California, so excise taxes (which were already paid) are applicable. It is permissible in some (all?) states for a distributor in one state to buy excise tax-unpaid product from another distributor...in another state. It is also permissible in some states that have mixed systems (The supplier is in a three tiered system and the purchaser is in a four tiered system) for the supplier to get a refund for tax paid product from their state since it is being sold interstate and those excise taxes are no longer due, since the transaction is not taxable. I'm a little hazy on specifics on these cases...essentially if excise tax is paid in one state, but that tobacco is sold interstate, not intrastate, then the excise taxes are refundable. That being said, its usually ignored by the companies transacting the business and the supplier's state gets money that they are not technically entitled to. Pennsylvania is a different case. There are no excise taxes in Pennsylvania (Formerly New Hampshire, too). Pennsylvania has use taxes on all products, equally (except food?). It is also illegal to sell tobacco to an end user in Utah, Montana and Washington from another state to avoid all the confusing interstate restrictions and tax avoidance. In Utah, Montana and Washington, end users can only buy tobacco products from a retailer in the state they live in.

There are three and four tiered systems of taxation:

Four Tier system (like California)
Manufacturer
Distributor
Wholesaler
Retailer
(End User/consumer)

Three Tier systems
Manufacturer
Distributor/Wholesaler
Retailer
(End User/Consumer)

Two Tier systems
Manufacturer
Distributor/Wholesaler/Retailer
End User

Taxes are generally paid by the distributor. Wholesalers and retailers would then only trade in tax paid product. With only a few exceptions, retailers aren't allowed to buy tax-unpaid products. In Virginia, I believe retailers are allowed to pay excise taxes on products they receive that aren't excise tax paid.

To put it short, my friend, your question in the State of California is non-sequitur. A retailer who would be selling to end users (one of which could be a minor) could only be selling tax-paid product. They would not be selling tax unpaid product. A wholesaler would not be selling to an end user (otherwise they would be a retailer) and would not have tax-unpaid product to begin with (in a four tiered system). A distributor, who would have tax unpaid product couldn't possibly be selling it to a minor, they would only be selling tax-paid product to a wholesaler (a legitimate company), which couldn't be a minor to begin with. So, a minor could only buy tobacco products from a retailer who only has tax-paid products. A wholesaler can't sell to an end user. This is bundled up into the cost of the product, it is not separable below the level of the distributor, it is a part of the cost the same way shipping would be. So, all taxes are due if product is sold to minor, since they are already paid. It is possible and permissible from retailers to buy directly from distributors, but its often not the case, in a four tiered system. Thats why several states have three tiered systems to begin with.

I should caution you: selling tax-unpaid products is quite serious; they like to call it trafficking, it is a felony. There should be no way a minor gets tax-unpaid tobacco product. It would be a double threat: in addition to the penalties associated with selling to minors. The felony would be the bigger problem. If a company is suspected of trafficking, I would imagine the Board of Equalization would suspend the license of the party in short order. So, if a minor had bought tax-unpaid tobacco and the authorities found out about it, it would be quite serious. If it were a retailer or a wholesaler, doubly so Selling excise tax-unpaid product and selling to a minor. if it were a distributor, triply so (one for selling to an end user, one for selling to a minor and one for knowingly selling excise tax-unpaid product to an entity not possessing a distributor's license).

Hopefully this answers your question.

[Lilmopho]

The minor doesn't need his mom's credit card he could just put money into one of thos visa gift card and ship it to a friends house

[Arcane]

So I'm not breaking the law then?

you didn't understand it either, riv?

[cotsi95]

Bascially NO the consumer doesnt pay taxes because they are already paid by the retailer. (What i said before) the only people that could POSSIBLY sell shisha that doesnt have the taxes paid would be a wholesaler/ distributor depending on the state and what there tier system is. And if they do that is is trafficking and a FELONY.