Ohio’s cigarette tax will increase by 35 cents/pack effective July 1st, 2015. As part of the cigarette tax increase, all wholesalers and retailers will be required to pay a floor tax based on their inventory at the beginning of business on July 1st. The floor tax is the amount of the tax increase (35 cents) applied to each cigarette tax stamp at wholesale (whether still on the stamp roll or already affixed to packs) and to each stamped pack of cigarettes at retail. The floor tax payment will be due September 30th, 2015.
The Tax Dept. will notify all wholesalers and retailers of the floor tax obligation via an information release and floor tax reporting form that will be mailed and posted on the Tax Dept. website. However, the Dept. will not issue any notice until after the Governor signs the bill, which will happen sometime before midnight on June 30th.
The Tax Dept. will also use the Ohio Tax Alert email system to notify the industry of the tax increase and floor tax. If you are not already signed up to receive the email alerts, you can get signed up here.
Even in the absence of having official notification from the Tax Department, wholesalers and retailers should consider raising their cigarette prices on July 1st to reflect the 35 cents/pack tax increase, and they should do an inventory at the beginning of business on July 1st (or close of business June 30th) for floor tax purposes.