The IGEN team was thrilled to attend the 2022 Federation of Tax Administrators Tobacco Section Annual Conference last week in Maine. This conference brings together hundreds of industry and state leaders across tobacco.
As a leading tax compliance software provider, it’s crucial we stay connected with tobacco and tax leaders. If there are sudden changes to legislation, systems, or forms, our team at IGEN can contact state and industry leaders directly to ensure everyone is on the same page.
We also couldn’t pass up the opportunity to enjoy some Maine lobster!
Getting back to business, here are our key takeaways from the conference:
1. New cigar legislation for online sellers
Until recently, online cigar sellers have not had to charge the excise tax that was imposed on brick-and-mortar cigar sellers. That’s starting to change as state legislators catch up with technology.
New model legislation to include online sellers in taxation requirements has been adopted by four states including Maryland, Michigan, North Carolina, and Virginia. Other states will follow with Indiana’s legislation going into effect July 1st, 2023.
Meanwhile, South Dakota previously passed their own legislation requiring online sellers to collect and remit tax.
2. E-cigarette/vapor products flavor guidance: how to stay compliant
Unless otherwise approved for pre-market sales by the U.S. Food & Drug Administration (FDA), the guidance bars businesses from selling flavored e-cigarette cartridges (excluding tobacco and menthol). The guidance does not apply to disposable vapor products.
In addition, a patchwork of states/localities have issued their own flavor bans leaving businesses wondering how to stay compliant as they supply their customers across the country.
Industry leaders are hoping to find a way to get notified in their back-office systems when the states/localities have a flavor ban.
3. Challenges in hiring and retaining employees
It will come as no surprise that, in the wake of the COVID-19 pandemic, hiring and retaining employees has continued to challenge industry leaders. High turnover rates and an aging workforce only heighten the talent gap.
The impact of tight staffing structures in tax often leads to overworked team members, loss of employee institutional knowledge, and increased risk for the business.
Many businesses are turning to technology to augment their workforce, elevate their team members to areas of more significant organizational impact, and reduce the burden of highly manual tax processes.