A Response from the ALCOHOL AND TOBACCO TAX BUREAU

[SmokeStack]

I asked a question to the ALCOHOL AND TOBACCO TAX BUREAU if the sale, purchase or trade of whole leaf tobacco requires a special permit and/or payment of excise taxes. Also, I asked if whole leaf tobacco can be regarded as an agricultural commodity. Here is their response...

[FONT=&quot]I would like to apologize for the delay in replying to your Internet email questions; however, I had to seek guidance from our Regulations and Rulings Division concerning your questions. [/FONT][FONT=&quot]In your emails dated November 30, 2012 and January 3, 2012, you ask whether your understanding that the sale of whole leaf tobacco (for example, raw tobacco or unprocessed tobacco) to consumers does not require a special permit or payment of Federal excise taxes because whole leaf tobacco can be regarded as an agricultural commodity. You would not need any type of permit from TTB; I want to make sure you understand that the reason no permit or Federal excise taxes are required for whole leaf tobacco is because Congress has not placed statutory requirements over such a product under the Internal Revenue Code, and not merely because the whole leaf tobacco is considered an agricultural commodity.

[/FONT][FONT=&quot]Just in case you were interested.[/FONT][FONT=&quot]
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[SmokesAhoy]

That's bad news, if I read that right our business with whole leaf is predicated on oversight. Which if this ever becomes popular with the masses will be instantly added to the irs's to do list.

 

[SmokesAhoy]

Maybe everyone should stop bringing this to their attention.

 

[SmokeStack]

Maybe everyone should stop bringing this to their attention.

That would be a good idea. But I just had to hear it straight from the federal government and I am glad to know where things stand. I am still waiting for a response from the Michigan TTB. My initial response from the Michigan TTB was that no license and no excise tax for whole leaf tobacco. When I asked them "how do you define whole leaf tobacco?" strangely they did not have an answer. So I had to write a letter and submit it to a different department and I am awaiting their response.

How can they say that there is no permit required and no excise taxes with whole leaf tobacco when they don't know what whole leaf tobacco is? What's with all the mystery?

 

[marksctm]

How can they say that there is no permit required and no excise taxes with whole leaf tobacco when they don't know what whole leaf tobacco is? What's with all the mystery?

There leaving all their doors open so they can re right, or right something new to screw us in the future.

 

[darren1979]

Give it a few years guys and your be following the uk on this. Under our law you declare how much tobacco you have grown and once its aged and ready to be shredded for smoking you pay the tax. Every one who grows tobacco this side of the pond pays there taxs Honest guv'nor.

 

[leverhead]

Every one who grows tobacco this side of the pond pays there taxs Honest guv'nor.

Everyone here drives no faster than the posted speed limit, no kidding!

 

[marksctm]

Give it a few years guys and your be following the uk on this. Under our law you declare how much tobacco you have grown and once its aged and ready to be shredded for smoking you pay the tax. Every one who grows tobacco this side of the pond pays there taxs Honest guv'nor.

I'm sorry, But there's no way, on gods green earth, That I will EVER! pay a Tax on something that I grew, for my own personal use, on my own property EVER!

 

[Boboro]

Would I have to pay tax on my beercan collection? Its growin real good and could be a sorce of revnew.

 

[johnlee1933]

I'm sorry, But there's no way, on gods green earth, That I will EVER! pay a Tax on something that i grew, for my own personal use, on my own property EVER!

AMEN!

 

[Chicken]

i dont think they like what we do,?????

beating them at thier own game, finding a way around paying thier taxes for high dollar store bought bacca products,

 

[wazzappenning]

i agree though, stop bringing it to their attention. every letter or call is more interest. the more interest there is into something the more likely a govt employee could have a brainfart, "hey we could probably tax that, and ill get a promotion cause i thought of it"

 

[Knucklehead]

If you're running a business you have to find all this out beforehand. Otherwise you're facing fines and/or shutdown. I took over the management of a dealership body shop after the EPA had come in and fined them $15,000.00 and shut them down until the fine was paid and the corrections they required were made. If you're shut down there's no income to pay the fine with. If it had been an independent shop that only offered paint and body services instead of a dealership somebody would have taken a serious hit, maybe even fatal to the business. In a sales oriented business, as opposed to a service oriented business, if your inventory is illegal you lose your inventory. For homegrowers the less said to the gov't the better, but if someone is starting a tobacco related business he better know his stuff ahead of time.

This thread really didn't make it clear, but I think Smokestack is trying to find out the regs governing a business, not home growing. It's a convoluted mess for someone trying to do the right thing and stay legal and make money doing it.

 

[BigBonner]

AK

Is right about knowing before you start a business . I checked out as much as I could . The gov doesn't want to put alot in writing to keep the monkey off their backs .

Less they acknowlege the less they have to defend .

Just like if you was caught swallowing a horse and the tail is hanging out of your mouth . Never admit to eating the horse .

 

[SmokeStack]

Give it a few years guys and your be following the uk on this. Under our law you declare how much tobacco you have grown and once its aged and ready to be shredded for smoking you pay the tax. Every one who grows tobacco this side of the pond pays there taxs Honest guv'nor.

Just curious about tobacco taxes in the UK. I assume that you pay taxes by the kilogram. At which stage of the process do you have to pay taxes? Is it the Whole Leaf? Is it after you pull out the mid stem? Or after you shred it?

Also, how much are the taxes? Is it still cheaper than buying commercial cigarettes or cigars?

To me tobacco growing and processing is more of a passionate hobby than a means of saving money on purchasing commercial products. The difference in quality and not using chemical additives makes a world of difference.

 

[FmGrowit]

The is no tax on whole leaf sent to the UK as long as you use USPS. UPS and Fedex both charge import broker fees that are ridiculous. The UK is probably the most friendly whole leaf country in the world...New Zealand is pretty cool about it too.

 

[AmaxB]

If you're running a business you have to find all this out beforehand. Otherwise you're facing fines and/or shutdown. I took over the management of a dealership body shop after the EPA had come in and fined them $15,000.00 and shut them down until the fine was paid and the corrections they required were made. If you're shut down there's no income to pay the fine with. If it had been an independent shop that only offered paint and body services instead of a dealership somebody would have taken a serious hit, maybe even fatal to the business. In a sales oriented business, as opposed to a service oriented business, if your inventory is illegal you lose your inventory. For homegrowers the less said to the gov't the better, but if someone is starting a tobacco related business he better know his stuff ahead of time.

This thread really didn't make it clear, but I think Smokestack is trying to find out the regs governing a business, not home growing. It's a convoluted mess for someone trying to do the right thing and stay legal and make money doing it.

So very true! Not only if you want to start a business but also keep one if you got it. If not prepared you could find your self out of business cause the folks buying from you are now buying down the street.

 

[Rhiannon]

I was curious if you could post the response you did get from TTB if you had gotten one by now. My husband and I are from Michigan and we are also having a difficult time finding the information we need. We would like to start a whole leaf tobacco retail store and want to make sure we have all of our bases covered. We will not offer any processing within the store but will be offereing shredders and other tyo products to the customers for purchase. If you know of any Michiagn whole leaf retailers that I could contact with some questions on how to get started that would be so appreciated. Thank you.

 

[FmGrowit]

I was curious if you could post the response you did get from TTB if you had gotten one by now.

[FONT=&amp]I would like to apologize for the delay in replying to your Internet email questions; however, I had to seek guidance from our Regulations and Rulings Division concerning your questions. [/FONT][FONT=&amp]In your emails dated November 30, 2012 and January 3, 2012, you ask whether your understanding that the sale of whole leaf tobacco (for example, raw tobacco or unprocessed tobacco) to consumers does not require a special permit or payment of Federal excise taxes because whole leaf tobacco can be regarded as an agricultural commodity. You would not need any type of permit from TTB; I want to make sure you understand that the reason no permit or Federal excise taxes are required for whole leaf tobacco is because Congress has not placed statutory requirements over such a product under the Internal Revenue Code, and not merely because the whole leaf tobacco is considered an agricultural commodity.

[/FONT][FONT=&amp]
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There are no federal licenses or permits needed to sell whole leaf tobacco

 

[Rhiannon]

Would you know of anyone holding a whole leaf retail that I could ask some questions about starting my own in my area? Thank you . I would like to get some advice on the "Do Nots".