Out-of-state businesses and Internet vendors often falsely advertise that they sell cigarettes “tax free”. However, Pennsylvania requires any person who purchases cigarettes outside the state and brings them into Pennsylvania for use to pay the Department of Revenue the appropriate cigarette excise tax, other tobacco products tax, and use tax. This also applies to cigarettes purchased from Native American reservations.
When Pennsylvania and Philadelphia cigarette and/or use tax is not paid at the point-of-purchase, consumers are required to report and remit cigarette tax using the REV-793 [PDF], Consumer Cigarette Use/Excise Tax Return or other tobaccos product tax using the REV-1809 [PDF], Consumer Tobacco Products Use/Excise Tax Return.
Cigarette tax and other tobacco products tax is due at the end of the month following the month in which the purchase was made. For example, if you purchase a carton of cigarettes April 30, you must remit cigarette and use taxes by May 31.
Failure to pay cigarette and use taxes actually increases the price of cigarettes for the consumer, because the consumer is then responsible for paying interest and penalty on all late tax payments.
Interest is calculated daily on unpaid tax. Penalty is calculated at 5 percent of the unpaid tax for every month or portion of a month in which the tax is not paid.
Cigarette tax evasion also puts Pennsylvania businesses at a competitive disadvantage to out-of-state businesses.
The federal government, under the Jenkins Act, requires vendors that ship cigarettes into another state to provide information to the taxing authorities in the purchasers' home states. The state taxing authorities, such as the PA Department of Revenue, may then pursue collection of the tax liabilities due the home states. The Revenue Department, charged with fair and equitable administration of tax law, is obligated to use this information to collect unpaid cigarette tax liabilities due the commonwealth.
The department’s Cigarette Tax Voluntary Compliance Program educates consumers about cigarette tax liabilities, waives penalties for those who self-report and remit taxes timely and offers opportunity for deferred payment plans to assist taxpayers in resolving their cigarette tax liabilities.
For additional information about the Cigarette Tax Voluntary Compliance Program, call 717-214-7287.