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Court rules against agency on taxing 'blunt wraps'

Should tobacco tax be applied to blunt wraps?
Should tobacco tax be applied to blunt wraps? (Zsuzsanna Kilian/SXC)

TALLAHASSEE, Fla. – An appeals court ruled Wednesday that the Florida Department of Business and Professional Regulation improperly sought to impose a tobacco tax on "blunt wraps" -- a type of wrapper used for homemade cigars.

A three-judge panel of the 1st District Court of Appeal sided with Brandy's Products, Inc., in a long-running dispute with the department about whether blunt wraps fall under the definition of tobacco products subject to the tax.

The department notified the company in 2013 that it owed $72,000 in taxes and other charges for blunt wraps distributed to retailers during a two-year period.

An administrative law judge agreed with Brandy's Products that blunt wraps should not be subject to the tax.

But the department rejected the administrative law judge's recommendation, prompting the company to appeal.

Wednesday's ruling said blunt wraps are made of tobacco, wood pulp and other products.

A key issue in the case is whether they should legally be considered "loose tobacco suitable for smoking," which would make them subject to the tobacco tax. But the appeals court disagreed with the department's interpretation.

"Although there may be sound policy reasons for imposing the taxes and surcharges … on all products suitable for smoking that are made in whole or part of cured, de-stemmed tobacco, only the Legislature has the authority to amend the definition of 'tobacco products' (in a section of state law) to accomplish that end,'' said the eight-page ruling, written by appeals-court Judge T. Kent Wetherell and joined by judges Lori Rowe and Timothy Osterhaus. "Accordingly, the agency's policy arguments should be directed to the Legislature."