Tobacco Dealer Takes on Fla. Tax Stamp Law

     MIAMI (CN) – A tobacco dealer challenged a Florida law regulating the purchase of tobacco tax stamps from the state, claiming the requirement that it pay a $2,000 minimum surety bond is “devoid of critical defining terms” and violates the state constitution.

     Leonia Enterprises and other tobacco dealers buy tax stamps and place them on tobacco products as a means of paying taxes or fees to the government.
     The Florida tax stamp law states: “Each dealer, agent or distributing agent shall file with the division a surety bond, certificate of deposit, or irrevocable letter of credit acceptance to the division in an amount equal to 110% of the estimated tax liability for 30 days, but not less than $2,000.”
     Leonia Enterprises says the language of the law is open to interpretation, including how the state calculates tax liability. “For example: Is the liability based on the amount of stamps actually purchased? Is it based on the taxpayer’s warehoused inventory?” Leonia Enterprises asks.
     The plaintiff also claims the regulation does not apply equally and uniformly to businesses such as Leonia, which pay for the stamps with cash or cash equivalent. Leonia says it should not be required to pay a bond if it uses cash.
     The dealer seeks a declaration that the tax-stamp law is unconstitutional.

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