Tax Court Denies Stamp Cost Deduction To Cigarette Retailers

Law360, New York (November 19, 2013, 7:14 PM EST) -- The U.S. Tax Court ruled Tuesday that a New York-licensed wholesale cigarette dealer doesn't qualify for a federal exemption that shields small resellers from capitalizing certain costs because the company artificially deflated its gross revenue by subtracting New York cigarette taxes from its sales.

The Internal Revenue Code says taxpayers who resell property must capitalize some costs related to the inventory unless the taxpayer's average gross revenue for the prior three years didn't exceed $10 million. City Line Candy & Tobacco Corp. tried to claim the...
To view the full article, register now.
Law360 Pro Say Podcast
Check out Law360's new podcast, Pro Say, which offers a weekly recap of both the biggest stories and hidden gems from the world of law.