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Calculating Tax Payments and Total Amount Due

Note that the cigarette tax rate changed Nov. 1, 2009. Consumers reporting and remitting cigarette tax payments on purchases prior to that date must use form REV-791. Consumers reporting and remitting cigarette tax payments on purchases on Nov. 1, 2009, and after must use form REV-793.

There are three steps in calculating tax payments and total amounts due on cigarette and little cigar purchases.

Step One - Calculate Total Tax Due.

For purchases on or after Nov. 1, 2009, cigarette tax is calculated by multiplying the number of cartons purchased by $16, the PA cigarette tax on a single carton.

Use tax is due when sales tax is not paid on cigarettes and little cigars brought into Pennsylvania, and it is calculated by multiplying the purchase price of the cigarettes by 8 percent for Philadelphia residents, 7 percent for residents of Allegheny county or 6 percent for residents in all other parts of Pennsylvania. The cigarette purchase price is the total of sales price, cigarette tax and shipping charges.

The sum of the cigarette tax and use tax represents the total tax due.

Step Two - Calculate Penalty and Interest

Penalty is calculated by multiplying the total tax due by 5 percent for each month or portion of a month the tax remains unpaid.

Interest is calculated by multiplying the total tax due by the number of days late by the daily interest rate. If the late period covers more than one year, then the number of days late and the daily interest rate must be identified for each year.

Revenue’s online penalty and interest calculator is a helpful too to help calculate a cigarette tax deficiency, interest, late-filing penalty and balance.

Step Three - Calculate Total Amount Due:

Add the total tax due plus penalty and interest to arrive at the total amount due.

The consumer must report and remit the amount due to the Pennsylvania Department of Revenue using the appropriate Cigarette Excise and Use Tax Return, REV-791 or REV-793. The Revenue Department can establish payment plans for taxpayers unable to pay their total liabilities at once.

Penalties may be waived when consumers timely participate in the Department’s Cigarette Tax Voluntary Compliance Program.