What is a Floor Tax?
A. When the cigarette tax rate increases, a floor tax is imposed on all wholesalers (affixing agents) who possess stamped cigarettes that are still being held for resale on which the cigarette tax was paid at the prior rate. Unaffixed stamps in the possession of wholesaler (affixing agents) are also subject to a floor tax. The floor tax is the amount by which the cigarette tax rate increases.
