Posted on 09/06/2006 10:08:11 AM PDT by SheLion
Robin Brayman, a 44-year-old Greenfield resident, thought she had saved quite a bit of money buying cigarettes online, until she received a bill from the state demanding more than $2,000 in unpaid sales and cigarette taxes.
"I had no idea. When I first started buying, the Web site said the cigarettes were tax-free, duty-free. You assumed you didn't have to pay anything," Brayman said.
Brayman, like many other smokers, purchases cigarettes online because they are offered at a deep discount. A carton of Marlboro Full Flavor 100s costs $29.45 plus shipping from BuyCheapCigarettes.com, the site Brayman patronized. The same carton costs $47.76, tax included, at the Shaw's supermarket on Main Street in Bangor.
But Brayman - and possibly many other Maine residents - did not know she had to declare her out-of-state cigarette purchases to the state and pay Maine's $2 a pack excise tax and 5 percent use, or sales, tax.
Because residents have not been eager to declare, the state has been taking sales and shipment reports from online tobacco companies and using them to bill residents for taxes, interest and penalties for failure to file and-or pay.
Between July 2005 and June 2006, the state sent bills to 2,400 residents, surprising - and angering - recipients such as Brayman.
"I have rent to pay and a teenage daughter. They're picking on smokers. It's unfair," Brayman said.
The state has held Brayman's annual tax and rent refund check and applied the amount to her debt.
The taxes, penalties and interest on online tobacco purchases can add up quickly. Brayman, who says she is on a limited disability income, still smokes at least two packs a day, but no longer buys online. At that rate, her habit costs at least $120 a month in excise tax alone.
But these taxes are not new. When cigarette sales outlets appeared online, state tax collectors invoked the federal 1949 Jenkins Act, which mandates that anyone who sells and ships cigarettes must report to state tax collectors the name and address of resident customers, along with the brand smoked and quantity of cigarettes bought.
Tax collectors from each state then can enforce their cigarette and sales tax laws on the buyers.
Online tobacco shops have been reluctant to report customer information, but at least two states, Virginia and Washington, have prosecuted businesses that have refused to provide customer details.
Some sites, including BuyCheapCigarettes.com, display a disclaimer that they report all sales and shipments to the customer's home state.
From July 2005, when the state began sending the bills, through June 2006, the state collected $554,000 in revenue. By comparison, the state has collected $151.5 million from in-state cigarette excise tax this fiscal year, which dates back to July 2005.
"I've talked with taxpayers that are upset," said Stanley Campbell, deputy director of Maine Revenue Services' compliance division.
"The main thing is the excise tax keeps Maine retailers on a level playing field," said Campbell, referring to the need for Maine tobacco sellers to compete with online outlets.
In Maine, online cigarette shoppers have one month to declare each purchase and pay taxes on it. The payments can be made upfront or residents can set up a payment plan with the state.
They recently raised cigarette taxes to TWO DOLLARS A PACK and $20 DOLLARS ON EACH CARTON.
Dorals? The lowest cigarettes on the totem pole cost $90 dollars for TWO CARTONS! And Maine wonders why the poor Mainers are forced to go elsewhere for this legal commodity!
IT'S THE AMERICAN WAY TO SHOP CHEAP and it's the LAWMAKERS DESIRES TO RAPE US BLIND!
LEVEL PLAYING FIELD? How can Maine SAY that when cigarettes in the state cost and arm and a leg! It's not the tobacco sellers faults. IT'S THE DAMN GLUTTON LAWMAKERS that did this to our state!!!!
Here's a question, how did they get the sales and shipment reports from mail order vendors in other states?
I find it interesting that the state chooses to pick on a woman who is lives on a disability income which of course is already provided by the state. Moreover, since Brayman is unemployed she has much more opportunity to smoke than most smokers who are not permitted to smoke at the workplace.
Carolyn
Some sites, including BuyCheapCigarettes.com, display a disclaimer that they report all sales and shipments to the customer's home state.
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The answer to your question (pulled from the article).
see #8.
Are there any Indian reserves in Maine? Up here there are several within two hours of Toronto that sell premium native brands for CAD $30 (USD $24) and generics for $15-20. National brands in the city are $70/carton.
Armed robbery under color of law at it's finest. She should just send a big FU back to the state.
You should be concerned since it is Your Tax Dollars being used to Pay Her Taxes on cigarettes.
Proof that The State is only looking out for your health and welfare with these onerous taxes (nyuk, nyuk).
Every year when I file my income taxes and send that check to the state and feds I put.....FU thieves! on the memo line. They still cash the checks.
You're kidding right? I pay $26 a carton here.
It's tax dollars paying for her cigarettes in the first place.
I staple tea bags to mine.
Yeah, more than that in NYC. In 2002, a pack of cigs there cost something like $7.80! Yikes!
"....how did they get the sales and shipment reports from mail order vendors in other states?"
Because we have allowed BIG BROTHER to look into every aspect of our life. From your medical records to your monthly phone calls, they know everything about you.
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