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.

[Raycpa]

They're picking on smokers. It's unfair," Brayman said.

Most smokers are not tax cheats, just a precious few.

[Gone GF]

I didn't say we were paying taxes for her. But if she's on disability your taxes (not necessarily cigarette taxes; any taxes) help pay for that disability. And that disability helps pay for her cigarettes. Ergo, your taxes help buy her cigarettes. I don't begrudge truly disabled people some basic help but cigarettes are hardly a necessity. And I say that as a former pack-a-day smoker.

[SheLion]

Most smokers are not tax cheats, just a precious few.

And aren't you special..................................

[SheLion]

I didn't say we were paying taxes for her. But if she's on disability your taxes (not necessarily cigarette taxes; any taxes) help pay for that disability. And that disability helps pay for her cigarettes. Ergo, your taxes help buy her cigarettes. I don't begrudge truly disabled people some basic help but cigarettes are hardly a necessity. And I say that as a former pack-a-day smoker.

And "I" am not happy about how the states use the cigarette taxes either!  Instead of paying for sick smokers, should there be any, or for prescription drugs for the elderly, or even to help kids, they squander the money to build big golf courses, plant a flower garden in the center of town, sponsor 5 race car teams and various race car tracks around the state!

That cigarette tax money was to go for education and health care.  But when the lawmakers saw all that money coming in, they licked their lips and rubbed their hands together and went nuts!  That is how so many little pet pork programs were born.  From the taxes smokers pay on cigarettes.  It's asinine!

I didn't say we were paying taxes for her. But if she's on disability your taxes (not necessarily cigarette taxes; any taxes) help pay for that disability. And that disability helps pay for her cigarettes. Ergo, your taxes help buy her cigarettes. I don't begrudge truly disabled people some basic help but cigarettes are hardly a necessity. And I say that as a former pack-a-day smoker.

And "I" am not happy about how the states use the cigarette taxes either!  Instead of paying for sick smokers, should there be any, or for prescription drugs for the elderly, or even to help kids, they squander the money to build big golf courses, plant a flower garden in the center of town, sponsor 5 race car teams and various race car tracks around the state!

That cigarette tax money was to go for education and health care.  But when the lawmakers saw all that money coming in, they licked their lips and rubbed their hands together and went nuts!  That is how so many little pet pork programs were born.  From the taxes smokers pay on cigarettes.  It's asinine!

[Gone GF]

"Instead of paying for sick smokers, should there be any,.."

Should there be any???? Surely you're kidding. If you're not kidding, then you're obviously not rational or your obsession with this topic has driven you beyond all reason.

"they squander the money to build big golf courses, plant a flower garden in the center of town, sponsor 5 race car teams and various race car tracks around the state!"

I have no control over what Maine does with cigarette taxes since I don't live there. The money certainly shouldn't go for the things you just named. But that really has nothing to do with a disabled woman who spends your tax money to buy cigarettes whining because she's having a hard time affording two packs a day. If this were the same woman whining about not being able to afford alcohol (which is very highly taxed) or high-end food, you'd tell her tough luck.

[SheLion]

Should there be any???? Surely you're kidding. If you're not kidding, then you're obviously not rational or your obsession with this topic has driven you beyond all reason.

"they squander the money to build big golf courses, plant a flower garden in the center of town, sponsor 5 race car teams and various race car tracks around the state!"

I have no control over what Maine does with cigarette taxes since I don't live there. The money certainly shouldn't go for the things you just named. But that really has nothing to do with a disabled woman who spends your tax money to buy cigarettes whining because she's having a hard time affording two packs a day. If this were the same woman whining about not being able to afford alcohol (which is very highly taxed) or high-end food, you'd tell her tough luck.

I'm not even going to get into this with you.  I had a grandmother who smoked three packs of unfiltered Camels a day and died of old age of 86. 

The golf course I mentioned?  Mass is the state that used the cigarette tax money to build a hugh $175,000 golf course.  It's not just Maine.  States all over the Union have turned into gluttons when it comes to the tax dollars flowing in from cigarettes.

CIGARETTES DON'T PAY TAXES ............SMOKERS DO!