Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, March 5, 1991 TAG: 9103050123
SECTION: NATIONAL/INTERNATIONAL PAGE: A-2 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Many dealers selling alcoholic beverages and cigarettes are paying taxes they do not owe, the bureau said Monday.
"As many as 20 percent of more than 400,000 businesses may be overpaying," ATF Director Stephen E. Higgins said in a statement. "ATF appreciates the compliance but does not want one cent more than the amounts owed."
Overpayments are averaging under $100, but some have been as high as $657 too much, the ATF said.
At the current rate, ATF would collect at least $4 million more than it should through the increase in federal excise taxes on hard liquor, wine, beer and cigarettes that took effect Jan. 1, said ATF spokesman Les Stanford.
"This is the reverse of the usual perception of the tax collector," Stanford said. "It's the basic man-bites-dog story in a different context."
The so-called "floor stocks" tax is expected to bring $300 million into government coffers by June 30, when it's due, said Jack Killorin of the ATF.
The tax must be paid by liquor stores, taverns and other retail outlets plus producers and importers. Normally, the producers and importers are the only businesses that have to worry about paying excise taxes.
But when the tax goes up, as it did Jan. 1, retailers must make up the difference between the old tax paid by the producers and importers and the new tax level on the goods in their stores.
When Congress raised the taxes, it included some one-time tax breaks for smaller dealers.
Those with no more than 500 gallons of alcoholic beverages - 222 cases of beer, for example - or 30,000 cigarettes - the equivalent of about 150 cartons - could claim an exemption. They would have to fill out inventory forms but would not have to pay any taxes.
Congress also created tax credits for dealers with more than 500 gallons of alcoholic beverages or 30,000 cigarettes. The credits range up to $240 for distilled spirits, $270 for wine, $87 for beer and $60 for cigarettes.
But an ATF review of more than 100,000 tax returns showed that about one in five dealers failed to take advantage of either the exemption or the credit.
by CNB