Maine: State bills smoker for online buys

bangordailynews.com ^ | September 06, 2006

[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.

[tigtog]

Just spent two weeks vacation in NY and noticed that cigarettes were selling for around $5.50 a pack. Being from VA I brought my own, around $2.50 a pack. When we crossed the PA border there was a smoke shop selling packs at $3.50 each. My entire take away of NY is they have fallen for the premise that envy is healthy for them. They have chased out about every industry they ever had with taxes and union rules and now are exporting the current tax base and future tax base by raising taxes more. My wife's cousin own a $200K house and pay over $7,000 a year in property taxes. We own a $600K house and pay less than $4,000. The differene is we actually get quality services for our money. They are quickly reaching the point of renting their homes from the state. Commercial real estate is nuts in NY, most of it just gets dumped on the cities and locales because of the property taxes and sales taxes make downtown retail space useless. I notice one other feature of NY it seems that down staters have concluded that it is cheaper to park welfare recipients upstate than keep them local. I don't think NY state implemented the 94 welfare rules. Just my observation.

[tigtog]

Just spent two weeks vacation in NY and noticed that cigarettes were selling for around $5.50 a pack. Being from VA I brought my own, around $2.50 a pack. When we crossed the PA border there was a smoke shop selling packs at $3.50 each. My entire take away of NY is they have fallen for the premise that envy is healthy for them. They have chased out about every industry they ever had with taxes and union rules and now are exporting the current tax base and future tax base by raising taxes more. My wife's cousin own a $200K house and pay over $7,000 a year in property taxes. We own a $600K house and pay less than $4,000. The differene is we actually get quality services for our money. They are quickly reaching the point of renting their homes from the state. Commercial real estate is nuts in NY, most of it just gets dumped on the cities and locales because of the property taxes and sales taxes make downtown retail space useless. I notice one other feature of NY it seems that down staters have concluded that it is cheaper to park welfare recipients upstate than keep them local. I don't think NY state implemented the 94 welfare rules. Just my observation.

[SheLion]

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.

Not only that, but she lives on a fixed income.  And cigarettes are a legal commodity.  We all order over the Internet and from catalogs, and Maine is even going after Maine people for taxes on ALL their out of state purchases.

I can't stand this putrid blue lawmakers we have in this state.  All for them and nothing for their constituents.  Pretty poor state of affairs our lawmakers have gotten us into!

[SheLion]

That's a very good question. Let me know if you find out.

The state FEDS are researching online finding all the cigarette vendors out there.  Most are giving out their customer lists but a few others are refusing to do this.

What gripes me is:  this ad Maine puts on TV about paying back taxes on items we bought over the Net or out of catalogs.  Just makes me sick.

Then someone sent me the Constitution that this is illegal for Maine to demand these taxes!  Got to keep our eyes on the state government every minute.  They will screw us good if we don't.

[SheLion]

Why would she care about the tax?

She gets them for free!

Why would you say that?  The only people I know that get real cheap cigarettes sans the taxes are our Congress and Senators in their commissary!

What makes you think this woman gets hers for FREE?????

[RexBeach]

I am sure they were priced at over 7-bucks a pack.

Oh well. $5.50 is still a lot.

[Xenalyte]

She's on disability, which comes from taxes paid by you and me.

We are paying her salary.

[sr4402]

She's on disability, which comes from taxes paid by you and me. We are paying her salary.

Probably have to pay for her cancer/heart disease treatments too.

[SheLion]

OK, then order them from the various Indian nations, who are not subject to reporting this sort of stuff. :)

Well, thanks so much but I have been rolling my own now for over 4 years.  I can roll a beautiful carton for a little under $8 dollars and the saving is phenomenal!!!!  And just by not paying into the state glutton coffers anymore tickles me to high heaven!

We have a Smoke Shop in town that sells everything but the beautiful Supermatic II Rolling Machine.  I do have to order it over the net.  The savings though has been wonderful!!!

OK, then order them from the various Indian nations, who are not subject to reporting this sort of stuff. :)

Well, thanks so much but I have been rolling my own now for over 4 years.  I can roll a beautiful carton for a little under $8 dollars and the saving is phenomenal!!!!  And just by not paying into the state glutton coffers anymore tickles me to high heaven!

We have a Smoke Shop in town that sells everything but the beautiful Supermatic II Rolling Machine.  I do have to order it over the net.  The savings though has been wonderful!!!

[SheLion]

Are they doing the same thing for those who buy the "roll your own" tobacco and tubes? They are significantly cheaper than regular cigarettes.

I'm guessing not, since those already have the tax.

Here's my information for rolling your own:

Can't stand the high taxes?

Afraid to order off of the Internet?

Then start rolling your own!!! I find everything but the machine downtown at the local Smoke Shop.  Also, Rite Aid and grocery stores also sell the bags of tobacco and the filtered tubes.

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

Check StuffYourOwn for prices on tobacco

$1.99 for 200 filtered tubes

Make your own cigarettes for as low as $6.99 per Carton! Smoke Quality FILTERED cigarettes that you make yourself using cigarette tubes (like a cigarette without the Cigarette tobacco), our cigarette making machines, and our "roll your own" cigarette tobacco.


-Stop Paying High Cigarette Taxes
-So Much Easier than "Roll Your Own" cigarettes!

and

Smokers United

Roll Your Own Tobacco Store

Roll Your Own Magazine

Are they doing the same thing for those who buy the "roll your own" tobacco and tubes? They are significantly cheaper than regular cigarettes.

I'm guessing not, since those already have the tax.

Here's my information for rolling your own:

[Xenalyte]

We sure will.

[trumandogz]

Perhaps she should get a job and then she would be able to afford her cigarettes.

BTW-I have no problem with smokers but I do have a problem with people that are addicted to the Welfare State.

[CDHart]

Well, we buy stuff from sporting goods catalogs, etc. I wonder if we're supposed to report that to the state?

Carolyn

[Thinkin' Gal]

What gripes me is: this ad Maine puts on TV about paying back taxes on items we bought over the Net or out of catalogs. Just makes me sick.

Everybody is a criminal in Baldacci-land. And to add insult to injury, the shoppers and smokers in Lewistan have been transported to New Somalia without need of passports or airline tickets. And every working sap or homeowner in the state gets to pay taxes for the new schools and social services.

Out-of-state 'contraband' - bad; Muslim imports - good.

[Madame Dufarge]

If you have ever voted Democratic in your life, then I have absolutely no sympathy for you.

Since she lives in Maine, the odds are that she has.

The sad truth is, though, "Republican" lawmaker Karl Turner, of the Great State of Maine is one of our leading smoke Nazis.

[Madame Dufarge]

Every state that has a Sales Tax also has a damnable Use Tax.

If you buy items from an out-of-state vendor that would be taxable in your home state, you're supposed to turn over the extortion money to your home state in the form of the Use Tax.

Lest any item in the universe go untaxed.

[Madame Dufarge]

By the way, notice Pravda on the Penobscot (Bangor Daily) chose a woman on disability to interview in order to divert the issue from confiscatory taxation of a legal product to a welfare recipient buying cigarettes?

Plenty of working people paying their own way who smoke, but let's conflate welfare recipients with smokers, lest some small sympathy for the shakedown victims seep out.

[SaveTheChief]

It's simple. The government wants the money that it believes is its own. This money of course goes into their pockets and into socialist-style programs that fail until someone gets the bright idea that the reason for failure is due to a lack of funding. And then they raise taxes on cigarettes again.

Lather, rinse, repeat.

Problem with the government shampoo is that you go to the poor house and your hair never gets clean.

[Starter]

"I haven't made any online or catalog purchases in a long time, but I seem to recall that the vendor can charge a sales tax to customers only who live in the same state as that in which the vendor is located."

Not quite. While that's the way that most people interpret that law, there are several states (namely California) that interpret the law as "if you sell to someone in our state, you charge them our sales tax". And they will bring the legal system in to force people to do so.

[Gaffer]

I know, and I guess some judgement about the fairness of that is okay, especially if it's for something of which you don't approve. But, the "not approving" part could extend to many different things for many different people. Look at it this way, if she keeps it up, the non-smokers out there will be happy that it won't be for long. My point is that any form of 'dole' for no work is the real 'sin' here.