Despite the well-known and proven ideology that the legislature holds the power to declare taxability of particular items, the Florida Department of Business and Professional Regulation (“DBPR”) went above and beyond its own reach in attempting to broaden the taxability of tobacco products, specifically blunt wraps. In 2015, the DBPR unilaterally changed the taxing scheme of other tobacco products tax in an effort to increase the agency’s revenue. To make matters worse for the DBPR, the Florida First District Court of Appeals ruled directly on this issue and held that blunt wraps are not a “tobacco product” within its definition in the Colorado Statutes.

Blunt wraps, or cigar wrappers, are primarily composed of paper and flavoring, with only a small amount of tobacco. For a product, such as a blunt wrap, to be declared taxable, it must fit squarely within the “tobacco products” definition as defined section 210.25(11), Florida Statutes. In Brandy’s Products, Inc. v. Dep’t of Bus. & Prof’l Regulation, the court examined the statutory definition, more specifically, the phrase “loose tobacco suitable for smoking.” As the phrase was considered “clear and unambiguous”, the court determined the words should be given “their plain and ordinary signification.” The court clearly favored the taxpayers and opposed the taxing authority when it declared that blunt wraps were not within the purview of the statutory definition.

Unsurprisingly, one specific item was absent from definition of “tobacco products”—blunt wraps. The Florida legislature went above and beyond in its ability to explicitly name various tobacco products it deemed taxable, yet blunt wraps weren’t included.

For a wrap to be taxable, it must fit within the statutory definition of a tobacco product. Michigan has a provision, section 205.422(2)(w) of the Michigan Statutes which seemingly does not appear to tax blunt wrap products. Being that Michigan taxes smoking tobacco, blunt wraps are merely a conduit to assist in the consumption of other tobacco products, not for use by itself, and as such are likely not taxable in Michigan. Since the items explicitly included in the definition of Tobacco Products are products that may be consumed, blunt wraps clearly fall outside this category. Using the rule of ejusdem generis – a rule of interpretation where a class of general wording must be followed and cannot be expanded upon – must be used to exclude blunt wraps from the Tobacco Products definition.

Many tobacco tax distributors may be missing out on refund opportunities, since many tobacco tax distributors have been paying tax on blunt wraps and should be entitled to a refund. Unbeknownst to many tobacco tax distributors, is a 2-4 year statute of limitations from the date of wrongfully paid tobacco tax to ask for an overpayment refund from the state. Many of our clients at Tobacco Tax Refund, Inc. are unaware that they have been overpaying tobacco tax, until we inform them of such. We at Tobacco Tax Refund, Inc. will conduct a detailed review and analysis of your records to properly determine your tax exposure and whether an overpayment has occurred.

Our firm will accompany you throughout the entire process, from needed communications with tax authorities or vendors, to the end result of receiving the amounts you are owed. We handle all the claim preparation, filing and more – everything is done for you so all you have to do is focus on running your business. In addition, we work to prevent future overpayments through our planning and consulting actions, so that you have more resources available to your business in the future.

We have represented millions of dollars in refund claims. Our team knows the ins and outs of the refund process for each state and we know exactly how to file an effective claim.

In addition, if you are located in Connecticut, Delaware, Georgia, Illinois, Iowa, Kentucky, Maine, Maryland, Mississippi, North Dakota, Nebraska, New Hampshire, Ohio, Oregon, Virginia, and Wisconsin, or other states with similar laws then you might have a refund based on our theory and proprietary.

Gerald “Jerry” Donnini II is a shareholder of the Law Offices of Moffa, Sutton, & Donnini, P.A. Mr. Donnini concentrates in the area of state and Federal tax matters, with a heavy emphasis on the tobacco, alcohol, motor fuel and related industries. He also handles a myriad of multi-state state and local tax issues. Mr. Donnini is a co-author for CCH’s Expert Treatise Library: State Sales and Use Tax and writes extensively on multi-state tax issues for SalesTaxSupport.com.  For more information please call us at 888-966-8216.