A Glendale smoke shop owner pleaded guilty to selling red-stamped cigarettes with Intent to Evade Taxes, a Class 5 felony, the Arizona Department of Revenue announced Nov. 16.
Gabriel Calderon of ITZ LIT SMOKESHOP, at 5112 W. Peoria Ave., accepted a plea agreement after pleading guilty to being in violation of A.R.S. § 42-1127(L). As part of the plea agreement with the State of Arizona, Calderon has agreed to pay the following in restitution: $4,872.76 to the Arizona Department of Revenue; and $2,000 to the Attorney General’s anti-racketeering revolving fund.
This criminal investigation was a joint effort of the Tobacco Enforcement and Criminal Investigations Units at the Arizona Department of Revenue (ADOR).
The plea agreement also stipulates that Calderon be sentenced to probation. Calderon further agreed to cooperate in any civil audit conducted by the ADOR.
ITZ LIT SMOKESHOP sells smoking and tobacco-related products, including cigarettes. During a routine tobacco inspection, ADOR’s Tobacco Investigators discovered various brand packs of red-stamped cigarettes on display for sale during a retail tobacco inspection. Red-stamped cigarettes may only be sold on reservation land by a retailer owned by the governing tribe or a member of that tribe.
Investigators found that between May 1, 2019 and Aug. 31, 2019, the entity filed false Transaction Privilege Tax (TPT) returns, and between Oct. 1, 2019 and July 31, 2020, the entity failed to file TPT returns altogether, according to ADOR. From May 1, 2019 through July 31, 2020, the business’ TPT liability was $4,634.76.
The State of Arizona, Maricopa County, and city of Glendale all impose TPT, Arizona’s version of sales tax, on sales of certain smoke products.
On Jan. 20 of this year the State Grand Jury indicted Calderon and his Roadsidetechaz, LLC — doing business as ITZ LIT SMOKESHOP — with 16 class 5 felony charges related to the business’ TPT liability.
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