Cigar Shipping Ban in MD

[beparrish]

There was a thread about this yesterday, but apparently hadn't been backed up prior to the hacking.

Anyway, I have been in contact with both of my State delegates, as well as my State senator, a columnist with the Baltimore Sun and a popular radio host about this. This morning, I have exchanged several e-mails with one of my delegates, and here is her most recent response:

Apparently, you are among many who have expressed concern about this bill. I just spoke with a contact on the House Ways & Means Committee (where this bill was heard in 2010) and learned that the Comptroller’s Office has been deluged with e-mails/calls regarding this legislation. So many, in fact, that the Comptroller is going to issue a press release today regarding this law. I should be getting a copy of it, and, when I do, I will send it right on to you. Hopefully, this will be cleared up by the release. We will see.

I'm keeping my fingers crossed !

 

[beparrish]

Got the following letter from the MD Comptroller's office, I hope the part I marked blue is accurate !

Dear Concerned Citizen:

Thank you for your inquiry concerning the implications of House Bill 88 - Other Tobacco Products Licenses. This 2010 legislation was sponsored by the Office of the Comptroller, passed by the Maryland General Assembly and signed into law by the Governor.

The intent of HB 88, which took effect on May 1, 2011, was to strengthen Maryland’s ability to identify and prevent widespread occurrences of tax avoidance and smuggling of other tobacco products (OTP), which include cigars, little cigars, pipe tobacco, chewing tobacco and moist snuff. For years, contraband OTP – on which the tobacco tax has not been paid but is due - entered Maryland in a variety of manners, virtually unrestricted and unregulated.

To illustrate the point, it’s worth noting that prior to HB 88, the tax on these products was to be paid by the wholesaler who sells them, or by the retailer or consumer who buys them. Since the inception of the OTP tax on July 1, 2000, only about $500 has been collected from OTP consumers; which would suggest retail sales volume of just $6,300 in retail sales across all of Maryland in nearly 11 years. Based simply on the amount of taxes paid, one could either conclude that there was a very limited consumer market for these products, or a widespread and growing problem with tax avoidance. Based upon our conclusions that the latter was occurring, a new licensing and regulatory process was introduced that was modeled after the one currently used for cigarettes. Included in this model is a prohibition on Internet sales of cigars.

The benefits of HB 88 include the fair and equitable collection of taxes, reduced access of OTP to minors, a deterrent effect on illegal smuggling and sales, and the enforcement of equitable regulatory and enforcement guidelines.

Unfortunately, erroneous information concerning this bill has been circulating. HB 88 was not an attempt by Maryland legislators to protect any retail cigar stores in Maryland. In fact, one reason this bill was needed is because certain retailers have purchased and sold contraband OTP illegally and the prosecution of these retailers under previous law was difficult at best. Nor was HB 88 an 11th hour effort. Legislative records will show that the bill was filed well before the start of the 2010 General Assembly, had its first reading in the House of Delegates on the opening day of the legislative session, and received timely public hearings in both the House Economic Matters and Senate Finance Committees.

That said, this Office recognizes that the enactment of this legislation has led to unanticipated consequences for certain consumers; namely, those who are accustomed to purchasing distinctive, premium cigars from online retailers. Notwithstanding the extraordinary challenges associated with tax compliance in this area, it is clear that the collection and enjoyment of premium cigars is an avocation enjoyed by a substantial, and obviously growing, number of Marylanders. It is with that in mind that this Office would accept the opportunity to work with state lawmakers and other stakeholders to identify legislative remedies that could fulfill the need for tax fairness and legal trade practices while reinstating a greater degree of consumer choice in this specific area.

Once again, thank you for taking the time to share your perspective. Should you have any further questions or need additional information, please do not hesitate to call.

Very truly yours,
Jeffrey A. Kelly, Director
Field Enforcement Division
Comptroller of Maryland

 

[mmburtch]

It is with that in mind that this Office would accept the opportunity to work with state lawmakers and other stakeholders

Not instigate, but accept. I sure hope someone invites them soon.

 

[SirSqueeboo]

I hope everything works out in your favor. These restrictions are absolutely ridiculous.

 

[SewerRanger]

The Baltimore Sun posted an article on this. You can read it here

Honestly I was unaware that the cigars I could be buying needed taxes to be paid on them. If they want to sell me a license to import cigars via the mail, I'll gladly buy one. Or hell, show me what sort of taxes I should be paying and I'll gladly do so.

 

[vortex]

I just know this will end in misery.