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Madison County Corporation Pleads Guilty to Evading Tobacco Taxes

Posted: December 30, 2019

MONTGOMERY, Dec. 30, 2019 ­­- Madison Wholesalers, Inc., pleaded guilty on Dec. 20 in a Madison County courtroom to evading tobacco taxes from 2013 through 2016. Madison County Circuit Judge Claude Hundley III accepted the felony guilty plea and barred the corporation from selling or dealing in cigarettes and tobacco products and ordered restitution of $214,605.76 in tax, penalty and interest to the Alabama Department of Revenue.

This is just one of several ongoing criminal investigations throughout the state by the department’s Investigations Division that involves not only tobacco taxes, but also income and sales taxes. Tobacco tax is due on tobacco products that are brought into Alabama for sale or distribution and is levied against the person or entity who imports the product into the state. Madison Wholesalers, Inc., purchased tobacco products from Alhamrah Corporation, located in Dunmore, Pa. Madison Wholesalers produced false invoices to hide the nature of the products purchased from Alhamrah in order to evade the tax due. This resulted in unreported tax of $119,937.13. The failure to pay the tobacco tax due saved Madison Wholesalers thousands of dollars and allowed them to sell tobacco products at a significantly lower price than their competitors.

Revenue from tobacco tax goes to the state’s General Fund which supports programs such as child development and protection, criminal justice, conservation efforts, economic development, public health and safety, mental health, Medicaid, legislative activities, and the court system.