Indiana’s Excise Tax

[Ryan]

I live in Indiana, I certainly noticed the tax. Since it is based on the wholesale price, it usually ends up being about 15% on top of the total on average. One thing it has taught me is the wholesale prices of various tobacco blends.

I don’t like it, but at least they don’t add it at B&Ms. Unfortunately most of my purchases are mail order so I feel it every time I place an order.

I’m still stocking up for the day it gets even worse.

 

[Briar Lee]

I live in Indiana, I certainly noticed the tax. Since it is based on the wholesale price, it usually ends up being about 15% on top of the total on average. One thing it has taught me is the wholesale prices of various tobacco blends.

I don’t like it, but at least they don’t add it at B&Ms. Unfortunately most of my purchases are mail order so I feel it every time I place an order.

I’m still stocking up for the day it gets even worse.

Missouri has had a 10% of wholesale tax for maybe a hundred years, and it’s the lowest tax in America.

If the Indiana brick and mortar shops didn’t raise prices it was because they’d been paying it already for decades.

What I suspect happened is Indiana revised their 24% wholesale price tax to cover all these new fangled vapor and edible nicotine products that were not being taxed as “any other tobacco product”.

To get paid excise taxes on out of state sales Indiana has to be a part of some database where the out of state seller can punch the zip code in their computer and the proper rate and where to pay the revenue comes up.

Missouri has only done that the last couple of years.

And it doesn’t apply to all out of state sellers, just those that do a certain volume of sales in the state.

 

[Briar Lee]

I spent a few minutes trying to research when Indiana first imposed and collected a 24% tax on pipe tobacco and the best answer I can find is 1987.

2017 Indiana Code :: TITLE 6. Taxation :: ARTICLE 7. TOBACCO TAXES :: CHAPTER 2. Tobacco Products Tax :: 6-7-2-7. Tax on distribution of tobacco products; rate; time of imposition; findings by general assembly

Justia Free Databases of US Laws, Codes & Statutes

law.justia.com

That tax was aimed at smokeless tobacco in 1987, and set at forty cents an ounce.

The pipe tobacco tax of 24% of the wholesale price might go back decades before 1987.

The latest new revisions were in fact aimed at taxing “alternative tobacco products” and specifically “closed system cartridges” which are added and taxed at 15% of the wholesale price.

Cigarette, Other Tobacco Products & E-Cigarette Taxes

Learn how you can report Cigarette and Other Tobacco Products to the Indiana Department of Revenue using our e-services portal, INTIME.

www.in.gov

Other changes were made in tax reporting which likely caused more out of state sellers to pay the 24% pipe tobacco tax.

 

[Ryan]

It’s interesting, because I can now buy SWR, Half and Half, and others at a B&M for less than I can via mail order. Not much less, but it is cheaper. For example, I can buy Half and Half for $5.66 after tax locally. At SP, that would cost me $6.45 after the excise tax and state tax.

 

[daveinlax]

It’s interesting, because I can now buy SWR, Half and Half, and others at a B&M for less than I can via mail order. Not much less, but it is cheaper. For example, I can buy Half and Half for $5.66 after tax locally. At SP, that would cost me $6.45 after the excise tax and state tax.

Stock up! Pipe tobacco isn’t price protected and I know I can buy premium traditional pipe tobacco online cheaper than my shop can get it + 74% lose tobacco excise tax. If you ever wonder why cigar shops don’t bother with pipe tobacco now you know.

 

[Briar Lee]

It’s interesting, because I can now buy SWR, Half and Half, and others at a B&M for less than I can via mail order. Not much less, but it is cheaper. For example, I can buy Half and Half for $5.66 after tax locally. At SP, that would cost me $6.45 after the excise tax and state tax.

That’s why states try and tax out of state sellers.

America has the largest “common market” on the planet. It is essential for economic growth. Can you even imagine if one state could get pissed at another and start taxing all products imported from a state they disfavored?

What states can tax are the use of products purchased out of state by state residents.

But in order for Indiana to collect that use tax they have to set up a system where an internet seller can know the tax rate and know where to pay the 24%.

It levels the playing field between the corner store and the internet seller.

 

[Briar Lee]

Stock up! Pipe tobacco isn’t price protected and I know I can buy premium traditional pipe tobacco online cheaper than my shop can get it + 74% lose tobacco excise tax. If you ever wonder why cigar shops don’t bother with pipe tobacco now you know.

For all of my life, if a man went to Lebanon Missouri and bought a brand new aluminum fishing boat from the factories there and titled it in Missouri he had to pay Missouri sales tax.

But if his boss bought a big yacht the boss titled his huge boat at the Port of St Louis on the Mississippi River and registered it with the Coast Guard in international waters and paid zero Missouri sales tax.

Then the boss trailered the yacht to Lake of the Ozarks where he kept it, beside the 20 foot Bass Pro boat the employee had to pay sales tax and annual property tax.

About thirty five years ago the Missouri legislature passed a law to tax yachts and bass boats the same, regardless of Coast Guard registration, unless over five tons.

Fair taxation isn’t easy.

Whoever has to pay the tax considers it unfair.

 

[hakchuma]

I cellared heavily and stopped about 4 years ago. Since then I was living under a rock living out of my comfortable cellar. Well I went for a TAD for the first time since and I was just about knocked over in my chair to find the same tax for Michigan totaling at $64.00 ! That bad news is I wont enjoy TAD's anymore. The good news is I wont be purchasing any more tobacco, ever, since I wont have to as I have far too much as it is.

 

[craig61a]

That’s a very low tax rate.

24% is very low compared to most other states.

Minnesota says “Hold my beer” 95% excise tax.

 

[BlueMaxx]

I got hit with it last t

Well this Indiana Tobacco Excise tax is now in effect. Dang it. Started July 1. Did others miss this new tax?


“Effective July 1, 2023, the State of Indiana is imposing an excise tax on all tobacco products sold to Indiana customers. Cigars and pipe tobacco will be taxed at 24% of the wholesale purchase price. For more details on the Indiana excise tax, please review here.”

I got hit by it last time I drove up to Bloomington to visit the Briar & Burley…..it sucks but what are ya gonna do?
My answer to myself is it will never be cheaper than it is now so stock up before any more increases.
It is what it is.
M

 

[rokerdepipe]

I appreciate your taking the time to write out that thoughtful reply. I have, since joining this forum, taken note of the generosity with which you share on these pages. And I read your words with all warranted reverence and gratitude.
To your point, perhaps I might have been better served to use the term "protect" rather than "help" in describing tobacco legislation.

Admittedly, I have my moments of self-absorbtion. But I'm not too far gone to recognize that I certainly do not speak for everyone when I use the word "hobby".

I find pleasure in reading about the history of pipes and tobacco; from its role in the American colonies and beyond. I enjoy my humble, yet growing, collection of pipes from various countries and craftsman around the world. I have fun in the kitchen, tinkering with casing, pressing and sometimes even stoving my own blends. And I often relax during the day reading this forum and the content shared by like-minded people.
I do all of these things, sometimes without a lit pipe in my hand or smoke in the air. So am I in denial when I use the term "hobby"? Perhaps.
But that's what it feels like to me.

I remember having a discussion along these lines with my late pipe smoking mentor. I came up with the analogy (which he approved): There are soccer players, and there are those who play soccer. One plays soccer for a living; full time. The other plays once in a while. Does that mean that neither of them can enjoy collecting soccer cards, or soccer balls, or specific jersey’s from other countries? Would these actions then make what they do a ‘hobby’?

A hobby properly defined is along the lines of “something one does regularly in their leisure time that brings them pleasure.” If you enjoy being on this and other forums regularly then it would be safe to say that this is your hobby. Whether you have a pipe lit and going while doing so, or not, is of no matter. The word or designation of ‘hobby’ has no application towards deeming whether one is considered to be a pipe smoker, or someone who smokes a pipe.

Just me two cents’ worth.

 

[AJL67]

85% n Florida. Them again no state income tax and plenty of places to order outside the state

 

[sablebrush52]

Wow, 24%. That is exorbitant.

California is 64% now, an Florida is much higher than that, IIRC.

 

[FurCoat]

California is 64% now, an Florida is much higher than that, IIRC.

NC recently started charging an excise tax nowhere near what FL and CA charge. I think it's around 8%. There is nothing we can do if we want our tobacco, but I do feel bad for those just starting out in their pipe journey.

 

[Sobrbiker]

All taxation is theft.
Jekyll Island will be the end of us all, but they’ll keep us just comfortable enough to do nothing but whine on our way down.

 

[Pipeoff]

You may be too young but, back in the day you not only purchased your tobacco products but, your tax dollars heavily subsidized tobacco farmers. Yes, farmers were paid to produce tobacco and lots of it!

For you hobbyists I know of no legislation enacted to support hobbies. Well, shooting and fishing are obvious exceptions. I suppose there are a few others I can't think of. Legislation by its very nature reduces the freedom of someone, somewhere. That's what laws are designed for, to control people actions in some form or another. Murder, speeding, usury, blue laws, smoking, and so forth, all reduce activities. Some laws we like and obey others, not so much. But, HO gauge trains, knitting, crossword puzzles, model building, stamp collecting, gardening and such hobbies are pretty much untainted by direct legislation. Others may overseen by some sort of governing body, drag racing comes immediately to mind. High school sports, golf (more of an addiction than a hobby for some). Only a few smokers, those unwilling to just accept themselves as, perish the thought, smokers, label their wee vice a hobby. Self-denial can be a wonderful thing.

I readily accept that there are self-defined "hobbyist" smokers. Which is why I wrote "you hobbyists". But, hobbyists are in fact, smokers also. What you chose to label yourself is, of course, your choice. For me? I find it a misnomer to be sure. A matter of semantics which is certainly open to, hopefully, light hearted discussion.

I thank you for your kind words though. I just, personal opinion only, find the term to be a bit "defensive", for want of a better term. But, that is my take and perhaps I get a bit over the top when I see it in print. Were I you, I certainly wouldn't put much thought to my position. If you are happy thinking of it as a hobby, I am tickled plumb to death for you.

 

[Pipeoff]

I remember having a discussion along these lines with my late pipe smoking mentor. I came up with the analogy (which he approved): There are soccer players, and there are those who play soccer. One plays soccer for a living; full time. The other plays once in a while. Does that mean that neither of them can enjoy collecting soccer cards, or soccer balls, or specific jersey’s from other countries? Would these actions then make what they do a ‘hobby’?

A hobby properly defined is along the lines of “something one does regularly in their leisure time that brings them pleasure.” If you enjoy being on this and other forums regularly then it would be safe to say that this is your hobby. Whether you have a pipe lit and going while doing so, or not, is of no matter. The word or designation of ‘hobby’ has no application towards deeming whether one is considered to be a pipe smoker, or someone who smokes a pipe.

Just me two cents’ worth.

No wonder our recent trade from US to you in Canada of tobacco , you recommended I fill out the Customs declaration hobby supplies in a soft pack that sailed rite through. Now I think of pipe smoking my hobby.