Posted on 05/23/2005 5:20:51 AM PDT by Born Conservative
States mails tax bills totaling $27,000 to 63 residents, including five from county. Per-pack levy of $1.35 still owed on Net sales.
The beleaguered smoker, exiled to windy doorways, paying ever-increasing prices and now … getting hefty bills from the state?
That’s what happened in February.
With the winter winds still whipping through the Wyoming Valley, five Luzerne County residents opened their mail to find insult added to injury.
The state Department of Revenue had sent letters asking them to pony up the taxes they hadn’t paid on cartons of cigarettes they had bought online.
The letters were the ultimate result of a federal lawsuit brought against two Internet cigarette sites in Virginia. Pennsylvania officials got the names of 63 state residents who had been buying online and not paid state taxes totaling nearly $27,000.
But that was just a small portion of the more than $2 million in taxes lost nationwide due to the two sites.
Pennsylvania trails only New Jersey and New York in online cigarette purchases, according to the state Attorney General’s Office.
State residents might like to buy their cigarettes online for the convenience of having them delivered straight to their doors. Or, as Barbara Petito of the state Attorney General’s Office put it, consumers may be trying to skirt the state’s $1.35 tax on a pack of smokes.
Some smokers may be misled into thinking that cigarettes bought online are exempt from state taxes, but then there are those who are “attempting to cheat the system,” she said.
The state has no way to force out-of-state Internet vendors to pay the $1.35 tax – the eighth highest in the country, Petito said. Instead, the state relies on smokers to self report the number of cartons they bought and cough up what they owe.
What is supposed to happen isn’t always what does happen.
When smokers don’t fess up and pay their taxes, the task of chasing them down falls to the Department of Revenue. States are aided by the Jenkins Act, a 1949 federal law, which requires someone who sells cigarettes across a state line to anyone but a licensed distributor to report that sale to the taxing body in the buyer’s state.
Violations of the act, however, are misdemeanors, and misdemeanors are rarely pursued by the Department of Justice. The states have the strongest interest in vendors complying with the law, but the states have no jurisdiction to enforce it.
That means Jenkins Act reports from Internet sellers don’t necessarily flow into the Department of Revenue with regularity, said department spokesperson Stephanie Weyant.
But the department plugs away.
As it does receive reports from the companies, including names of consumers and numbers of cartons purchased, the department sends out bills.
If you’re buying cigarettes online, “chances are at some point you’re probably going to get a letter from us,” Weyant said.
They have good reason to be vigilant; after all, tobacco brings big money.
Last year, Pennsylvania collected $856 million in cigarette excise taxes.
Just how much money goes uncollected is difficult to gauge.
“It’s hard to put a handle on it,” she said.
Consider the challenge of collecting the taxes when just two Internet sites sent at least 8,000 invoices to the department listing Pennsylvania customers.
“And that’s just for April of 2005,” Weyant said. “That’s just for one month.”
And that’s just two out of nearly 150 Web sites that sold cigarettes on line as of 2002.
That translates to millions of dollars in uncollected taxes.
A federal report from 2002 predicted the number of Internet sites selling cigarettes and the volume of sales would increase. That makes collecting the tide of unpaid taxes a bit like swimming against a river.
In March, the state revenue department got some much-needed help.
Pennsylvania and nine other states partnered with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives to enlist the credit industry in the effort to clamp down on Internet cigarette sales.
After meeting with a group of state attorneys general, most major credit card companies announced their cards would no longer be able to be used to pay for tobacco bought online. They simply won’t process the payments.
If you’ve bought cigarettes over the Internet, haven’t paid the taxes on them and want to save the state the trouble of tracking you down, you can visit .us to find Consumer Cigarette Excise Tax Return, form REV-791.
You can complete the form and pay your dues, but there’s no good-citizen discount for paying what you owed.
Hello Black Market, Gangs, Organized Crime, etc. Didn't the government learn any lessons from Prohibition...
Ping
And now this ridiculousness about not being allowed to take a lighter on an airplane.
Good freakin' grief.
One wonders if this cost is greater than what they are attempting to collect.
If done by anyone else but gubermint, this would be racketeering.
BUMP!
"Or, as Barbara Petito of the state Attorney General’s Office put it, consumers may be trying to skirt the state’s $1.35 tax on a pack of smokes."
How DARE they! /sarcasm
No, they didn't.
Governments, due to their ponderous inefficiency and the nature of control-freak bullies that staff their bureaucracies, are unable (or unwilling) to recognise their rampant errors in judgement.
Yep, free trade for the STATE, but not for the PEOPLE!
My husband has already quit smoking because of the high cost of his preferred brand of cigs....I'm probably not far behind since nanny gubmint here in Texas is slapping on yet (another) 60-something-cents-per-pack tax.
We've been ripped off of about $140 worth of Internet purchases from Switzerland because of the FBI's ILLEGAL seizure at JFK, now credit card companies say they won't even process the payments?
I'm waiting Texas!
Go ahead...ASK me for my *supposed* taxes 'owed'!
'Cause ya know what I'm going to tell the State of Texas?
The state that MY family FOUGHT to CREATE... The state my family PAID for with GENERATIONS of blood, sweat, and tears?
Poor old tax cheats.
Can't stand the high taxes?
Afraid to order off of the Internet?
Then start rolling your own!!!
I roll out a beautiful carton for a little under $8 dollars. Premiums in my state are now up to $45-$50 a carton. Can you imagine the money I have saved over the past 4 years since I now roll my own? It's mind boggling.
under $50.00
$5.75 a bag
$1.99 for 200 filtered tubes
and
Hubby just couldn't find a loose tobacco he thought was comparable to what he was already smoking.
The cigs we were having shipped were SO much fresher than the ones we bought locally!
Makes you wonder about what ELSE their pawning off on American consumers besides stale smokes!
You're such a shmuck, Ray.
Hmmm.... How long before the useless greedbags at the states start whining about how they are "losing revenue" to roll-yer-owners?
Well, at least the state is pulling in the .25 cent surcharge on each bag of loose tobacco, so they shouldn't be "too" miffed!
At least we are buying locally most of the time, and .25 cents is better then nothing. heh!
FReepers kept talking about rolling your owns and I swore that if Maine raised their cigarette taxes one more time then I would look into it.
Well, Maine raised the cigarette tax one more time 4 years ago. (My premiums went up to $45-$50 dollars a carton!)
I threw my hands in the air and looked around locally for tobacco, tubes and the machine.
I used to smoke More Menthols for many years and I never dreamed I could give them up. But from the first time I smoked one of my roll your owns, I kept with it and never looked back. The tobacco tasted just as good to me and this tobacco doesn't have all that junk in it that Big Tobacco adds.
And compared to $45-$50 for a carton of cigarettes, I can roll a beautiful carton for a little under $8.00. Can you imagine the savings?
The local Smoke Shop only sells the little hand held plastic rollers. This Supermatic has to be ordered from the Net.
But they last a long time.
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