FTA Tobacco Uniformity and ManageMore Data Entry

The Federation of Tax Administrators (FTA) promotes uniform tax reporting, definitions, and electronic filing standards across states, specifically focusing on tobacco and motor fuel taxes to improve compliance and create standards that software companies (like Intellisoft) can rely on to establish consistent tax administration from state to state. 
 
ManageMore has integrated all the necessary steps to produce an FTA Tobacco XML filing schema for reporting your tobacco purchases/sales with your state’s Dept of Revenue or state’s separately operated tobacco division.  Many states are now supporting this FTA standard and ManageMore can help with this reporting process.
 
It is important to understand that the FTA does not mandate their rules, but provides them as guidance for states to adopt at their discretion.  Since each state may have adopted their own excise taxation on different tobacco products (e.g. chewing tobacco, small/large cigars, disposables, SNUFF, alternative NIC products, etc.), the electronic submission of an FTA Tobacco XML file will  differ slightly from state-to-state.  Each state that has adopted the FTA Tobacco uniformity standards will produce its own custom version of this XML filing schema and you will need to contact Intellisoft to confirm if we have a state compliant FTA uniform tax reporting file available.
 
This FTA uniform tax reporting resolves several issues that traditionally was exhaustive and required tons of state/federal paperwork to be filed.  Using this standard, your state agency can now accurately determine the amount of excise taxes you owe for all cigarette/tobacco products bought and sold each month.  It also provides all of the detailed customer and licensing information needed to comply with Federal requirements on Tobacco sales for the PACT act.  
 
With all this stated, it is still a bit of a challenge to get all the right data entered to produce a valid XML file to your state that won’t get rejected due to a data entry error made somewhere in the program (e.g. missing customer zip code, missing retail unit measure, missing items per selling unit, unclassified tobacco product, etc.).  This article will go over all the necessary data entry fields that must be properly filled in to properly report regulated tobacco products in an FTA standard XML file.  

 

 

Inventory Entry Considerations

Regulated Product Type

Each inventoried product that requires state/federal reporting will need, at minimum, to be assigned a regulated product type in ManageMore.  The Regulated product type tells the software what type of tobacco product we are dealing with and how to report it in the FTA electronic filing guidelines.  The regulated product options are broken down in a similar fashion to the federal government’s defined tobacco classifications listed below.

Chewing Tobacco
Closed Vape (Disposable or Vapor Product)
Open Vape (E-Liquid Product)
Chewing Tobacco
Cigarette
Cigarette Paper
Cigarette Tube
ENDS Hardware

Little Cigar
Large Cigar
Pipe Tobacco
Roll Your Own
Small Cigar
Snuff
Alternative Nicotine Product
Vapor Product

State Required Product Types (Custom Groups)

Depending on the State, you may also be required to classify and report regulated products which use their own state classification codes (e.g.  loose leaf tobacco, plugs, twists, wraps, THC-A, etc.).  ManageMore provides a special Inventory Custom Group field which is used for these state-based scenarios.

 

Retail Unit Measure and Items Per Selling Unit

One of the FTA rules for providing sales/purchase of tobacco products is that you report the item activity in their lowest retail unit demination when received or sold.  In other words, regardless if you sell a product by the box or case, you must report how many individual retail units were sold or purchased for each case delivered to a customer.  For example, if you invoice a retail store for two cases of Swisher Sweet cigarillos that contains 30 packs of 2 cigars per foil, then you must report that 60 packs in total were sold.

Furthermore, each cigarette or cigar is considered a stick and you must report the total sticks that were sold as well.  This is referred to as the items per selling unit of the product.  In the prior example, each case contains 30 packs times 2 cigars for a total of 60 items per selling unit.  In the case of a carton of cigarettes, 10 packs per carton times 20 sticks each is 200 items per selling unit for every carton sold to a customer.

ManageMore will handle all the calculations to report in your XML file, but you will need to tell the inventory how this product is packaged as a retail unit.

Retail Unit Weight

If there are any regulated products that have excise tax computed by the weight of the product, then it will be necessary for you to provide the retail unit weight of the product.

 

Customer Entry Considerations

Customer Type

Every sale of a regulated product must be associated to a licensed customer.  This customer must be assigned a trade classification from any of the ones mentioned below.  On the Personal Tab of the customer record (within the Legal Information Section), you will find the trade classification field where you can select this customer trade. Retailer or Distributor should be the most common customer types selected.

Retailer
Distributor
End User
Subjobber
Wholesaler

Employee
Native
Military
Government
Other

Data Entry Requirements

The data entry information for each customer record must also be accurate or your electronic submission will be rejected.  The following fields on every customer record should be filled in completely for proper tax reporting.

  • Company Name
  • Full Address
  • Federal EIN
  • State Tax Id (aka State EIN)
  • Customer Type (mentioned earlier)

Some states may also require additional information such as the customer’s tobacco license and/or other state required license to sell specific regulated products.

NOTE: If you do not know the customer Federal EIN, enter nine 9’s (i.e. 999999999) as the FEIN and this will usually be acceptable and likely avoids a file submission being rejected.

 

Vendor Entry Considerations


Vendor Type

The suppliers you receive your regulated products from must be classified into specific trade classes.  This selection is made on the Vendor Info Tab under the Vendor Type field.  Select *Add New*  and create a Vendor Type with one of the mentioned values listed below.  In most cases, Distributor will be the most common trade class selected.

Distributor
Manufacturer
Wholesaler
Subjobber

MSA Status

If you are purchasing regulated products (e.g. cigars, chewing tobacco, etc.) directly from a manufacturer, then Federal Law requires that you report what type of manufacturer you are receiving merchandise from.  The choices are listed below.   This MSA Status field can be found on the Options tab of the Vendor record and will provide you the following options.

  • Not Applicable
  • Original Participating Manufacturer
  • Subsequent Participating Manufacturer
  • Non‐Participating Manufacturer
  • Participating Manufacturer
  • Texas

Data Entry Requirements

The data entry information for each vendor record must be accurate or your electronic submission will be rejected.  The following fields on every vendor record should be filled in completely for proper tax reporting.

  • Company Name
  • Full Address
  • Federal EIN
  • State EIN (only required if your state provides one)
  • Vendor Type (mentioned earlier)
  • MSA Status (mentioned earlier)

NOTE: If you do not know the supplier’s Federal EIN, enter nine 9’s (i.e. 999999999) as the FEIN and this will usually be acceptable and likely avoids a file submission being rejected.