Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2016

Cigarette and Tobacco Products Tax Annotations


Package of Cigar Wraps. A distributor sells three cigar wraps together in a single package. The package contains one natural leaf cigar wrap, composed entirely of tobacco, which meets the statutory definition of a tobacco product. The package also contains two homogenized tobacco leaf wraps that contain less than 50 percent tobacco and do not meet the statutory definition of tobacco products. If the distributor can establish through documentary evidence, such as purchase invoices, the actual wholesale cost of the natural leaf wrap, the Board would accept that the tax could be reported on the actual wholesale cost of the natural leaf wrap (the tobacco product). Because it is assumed that the cost of the natural leaf wrap is much higher than the wraps that are not tobacco products, if the distributor is unable to establish through documentary evidence the actual wholesale cost of the leaf wrap, the Board assumes the wholesale cost of the package is subject to tax. 10/22/09.