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[ INDUSTRY NEWS]
States targeting online smokers
Smokers who buy cigarettes on the Internet as a means to avoid taxes may have to pay up. NACS Daily reported earlier this year that state tax departments in Michigan and New York were asking residents who avoid paying taxes on cigarette sales made via the Internet to pay back what was due to the state.
In February, Americans for Tax Reform President Grover Norquist called Michigan's efforts to collect taxes owed from online cigarette sales "a blatant attack on smokers who are fed up with paying sky high taxes on tobacco products at bricks-and-mortar stores" in the state, adding that the state's efforts were an invasion of privacy. He also blamed cigarette excise tax increases for driving consumers to the Internet to avoid paying the tax.
According to the Web site www.Stateline.org, other states are looking to recover taxes owed from consumers who purchase cigarettes over the Internet illegally.
The news source noted the following states are taking action against online cigarette sales:
- Alaska has sent 1,000 letters to online cigarette buyers and has collected roughly $100,000 in owed taxes (about one-fourth of what is owed to the state from Internet cigarette sales).
- Illinois has sent 1,300 letters and estimates about $100,000 will be recovered.
- Connecticut has sent 141 people a tax bill, totaling $165,756 in owed taxes.
- Of the 63 individuals in Pennsylvania who were sent a tax collection bill, the state has received $26,810 of what is owed.
- Ohio has sent nearly 245 letters to collect $20,000 in taxes owed to the state.
- Arizona and North Dakota are planning to send letters to online cigarette buyers to collect taxes owed.
Stateline.org wrote that while the Virginia Attorney General's office was in the process of prosecuting two Internet cigarette vendors, www.cigoutlet.com and www.affordablecigs.com, it found out that the sites were illegally selling cigarettes in 46 states, creating $2 million in revenue. Upon this discovery, the Virginia AG notified those states of the individuals who were buying cigarettes through the two sites.
The Washington Department of Revenue has filed a federal lawsuit against online vendor www.valuecigs.com in order to collect the names of the site's customers. |
