Ohio issues guidance for Distributors and Retailers of Pipe Tobacco

Ohio wants each other tobacco products (OTP) distributor to maintain complete and accurate records of tobacco sales and mark invoices reflecting sales of OTP to show the payment of excise tax. Retailers are also required to maintain records that reflect the OTP tax paid.

The Ohio Department of Taxation warns that combining two or more separate pipe tobacco products is only permitted when performed by either (1) the consumer or (2) the retail dealer in front of a waiting end consumer. A distributor or retail dealer may not blend two distinct products into one container to create a separate, unique product for sale at retail. Failure to comply with this standard may result in the confiscation of the blended product, and could require the distributor or retail dealer to obtain a manufacturer’s license.

The tax department needs to be able to connect invoices to inventory and distinguish between taxed pipe tobacco and untaxed pipe tobacco products. The Department advises that retail dealers protect the integrity of their tax-paid pipe tobacco and all other tobacco products by keeping an inventory log to keep track of distributor name; invoice number; invoice date; beginning quantity and date received from distributor; as well as dates, quantities, disposition of products.

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