A Columbia Heights man has been accused of not paying taxes on tens of thousands of dollars' worth of tobacco products that be bought from another state and brought into Minnesota.
As most of us in the Twin Cities know, tobacco is among the most heavily taxed, heavily regulated products in modern commerce.
According to authorities, the man bought $33,430 worth of wholesale tobacco items in Illinois in February. Had be bought them in Minnesota, he would have owed close to $23,300 in Minnesota taxes, according to an estimate provided by the Minnesota Department of Revenue.
The man is not a licensed tobacco dealer. Authorities allegedly found him standing next to a conversion van filled with the tobacco products. Evidently, what appeared to be orders from customers were found on the man's cell phone. It seems he was selling to stores, rather than to private individuals.
Not having worked with this man personally, we cannot explain his thought process. However, it is not unreasonable to think that a person could see a business opportunity --- buy tobacco products where they are cheaper, sell them where they are more expensive - and not realize that there were tax implications.
Taxes, as anyone who has ever had to pay them knows, are complicated and it is not at all uncommon to find yourself in a situation where you need professional help untangling your situation. If that is the case, do not be afraid to seek out such help. That's most likely a better option than just ignoring the problem, because that won't help at all.
Source: The Star Tribune, "State:Tobacco buyer evaded taxes," Jane Friedmann, Dec. 19, 2012