Kentucky Tobacco & Candy Association - News

KTCA files suit against the Revenue Department

The Kentucky Tobacco & Candy Association, and several of its members, have filed suit today against the Revenue Department seeking to enjoin the improper application of the Contraband Cigarette Statute, KRS 138.146. This statute permits Revenue to seize cigarettes that do not have evidence of the tax being paid - the tax stamp. However, Revenue is seizing product in which the wholesaler has in fact made a good faith attempt to affix the stamp. This policy of the Department has the potential to cost legitimate wholesalers hundreds of thousands of dollars.

KTCA attempted to informally work out this issue, but the Department was unwilling to seriously deal with the very real economic harm these new enforcement procedures are causing to the legitimate wholesale industry in Kentucky.

Though KTCA recognizes the existence of a black market in cigarettes and that there are people trying to evade the tax stamping requirements, the KTCA is compelled to protect legitimate businesses from overreaching by the Revenue Department.

Jim Glockner of Ohio Valley Wholesale, and the President of KTCA, said "Our motivation is simply to force the Revenue Department to develop and apply objective standards on what constitutes a proper tax stamp on a pack of cigarettes that recognizes the current state of stamping technology. Without that, legitimate wholesalers are forced to comply with an unknown standard with less than ideal equipment and forced to use stamps of questionable quality. All this translates into a potentially devastating effect on the wholesale industry despite our very best attempts to comply with the statute."