I recieved a tax bill from the State of NH for Tobacco Taxes on Indian Res. cigarettes purchased via internet. This valid/legal?

Asked almost 4 years ago - Goffstown, NH

In the past I have purchased cigarettes over the internet from a company that is based on an Indian reservation in NY state. They state that they do not supply sales info to individual states, as they are not governed by the same laws. The State of NH has just sent me two (2) tax bills for NH Tobacco taxes they claim are due them. I wonder how they got this info if the seller does not report it, and if this is a valid sales tax if the cigarettes were purchased out-of-state (although by mail). Can they do this legally? And of course, must I pay?

Attorney answers (3)

  1. James Elliot Pratt

    Contributor Level 12

    Answered . New Hampshire does not have a general sales tax. There is a tobacco tax in New Hampshire which is an excise tax on each pack of cigarettes required to be paid by the consumer and collected by retailers and wholesalers. Your facts indicate the cigarettes were purchased from an Indian Reservation in NY. For decades, state authorities have hesitated to enforce tax laws out of deference to sovereignty claims of the Indian Reservations, but cigarette sales in NY Indian Reservations have recently come under increased scrutiny of tax authorities. Only native Americans are allowed to buy untaxed cigarettes on reservations, but only for personal use and not for resale. Assuming you are not a native American and you are New Hampshire resident within the jurisdiction of New Hampshire, your purchase of cigarettes with the intent to use them in New Hampshire arguably makes you liable for New Hampshire tobacco taxes. If your liability rises to a level worth fighting, then I would consult a tax attorney in your state.

    DISCLAIMER & IRS Circular 230 DISCLOSURE:

    The information in this answer is for general information purposes only. Nothing on this communication should be taken as legal advice for any case or situation. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and your receipt or viewing of any such information does not create an attorney-client relationship between you and James E. Pratt.

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  2. Jeffrey William Keiser

    Contributor Level 7

    Answered . I cannot answer the how they got the information on the orders, but every state imposes not only a sales tax, but also a use tax. The sales and use tax in most states is exactly the same. The state not only can collect tax on the sale of an item (generally collected by the store at the time of the purchase), but can also collect a use tax from the user of the product. It is very likely you will have to pay the tax, but for a precise answer you need to consult a tax advisor in your state.

  3. Henry Daniel Lively

    Contributor Level 20

    Answered . Yes they can tax you for the use tax. This is being done more and more lately. Someone obviously reported this along the chain of your purchase.

    Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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