2nd Circuit: Wholesaler Cannot Deduct Cigarette Tax Stamps As Selling Expenses

(October 13, 2015, 10:42 AM EDT) -- NEW YORK — A Second Circuit U.S. Court of Appeals panel on Sept. 30 upheld a ruling by the U.S. Tax Court in favor of the commissioner of Internal Revenue, which ruled that a New York tobacco wholesaler could not deduct the cost of cigarette tax stamps as direct costs because they are purchasing costs (City Line Candy & Tobacco Corp. v. Commissioner of Internal Revenue, No. 14-3793, 2nd Cir.; 2015 U.S. App. LEXIS 17175).

(Summary order available. Document #04-151021-015R.)

Tax Deficiencies Found

In October 2008,...
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