Posted on 07/31/2002 7:51:30 PM PDT by RCW2001
Internet Smoke Shops Lure Tax-Averse Cigarette Buyers
By HARLAN SPECTOR
c.2002 Newhouse News Service
As state after cash-strapped state slaps hefty tax increases on cigarettes, smokers are flocking to Internet sites where they can buy tax-free.
Hundreds of Internet smoke shops have come online in recent years, offering a vast selection of premium and discount brands and the enticement of tax-free smoking.
Anti-tobacco activists complain that Internet vendors are unregulated, making it easy for kids to buy online.
Meanwhile, some states are looking for ways to collect the excise taxes cigarette smokers are dodging. Massachusetts and other states have sought customer names from Internet vendors, but they have little leverage to force the issue.
The Ohio Department of Taxation asks a handful of out-of-state vendors for customer lists every year.
"We haven't had very good response," says department spokesman Gary Gudmundson.
"None of these (vendors) report," says Gary Kirschner, chief executive of eSmokes.com. Kirschner says his Internet smoke shop now has 450 competitors online, compared with 30 when his company started in 1999.
"Eighty percent are Indian reservations," he says. "They never report anything to anybody." Sales of cigarettes on Indian reservations are exempt from state and local taxes by law.
Demand is greatest from high-tax states like New York and New Jersey, which levy the nation's highest smoking tax -- $1.50 per pack.
Kirschner says eSmokes also is seeing a jump in customers from Pennsylvania, which raised its tax to $1 a pack on July 15.
New York tried to outlaw Internet and mail-order cigarette sales, but a federal judge struck down the provision last year.
Rep. Martin Meehan, D-Mass., is drafting legislation in Congress to prohibit Internet sales to minors and require that cyberstores be licensed in every state in which they do business.
Age verification at dirtcheapcig.com is typical of Web vendors: "Click here to enter only if your (sic) are 18 or older".
Dr. Rob Crane, a Columbus, Ohio, family physician and anti-smoking activist, says Internet sales threaten efforts to reduce smoking rates with higher taxes.
"It ought to be illegal to sell across state borders," says Crane, who is also part of a campaign to raise the smoking age to 21.
The 55-cent-per-pack tax in his state, where adult and teen smoking rates are among the highest in the nation, may not be enough to drive large numbers of smokers to Internet vendors. Shipping charges keep Internet prices in the ballpark with brick-and-mortar retailers.
Tobacco dealers dispute evidence that higher taxes discourage smoking. They say the tax burden only shifts dependence to low-cost brands and out-of-state vendors.
"It's not people giving up the habit," says Joshua Sanders of the Ohio Council of Retail Merchants.
"They're just going somewhere else."
(Harlan Spector is a reporter for The Plain Dealer of Cleveland. He can be contacted at hspector@plaind.com.)
Congress has banned most private interstate transfers of handguns, and those are even supposed to be protected by the Second Amendment. I can't see how anyone could make a plausible (to today's courts) constitutional argument that Congress doesn't have the authority to restrict interstate cigarette sales [btw, if cigarettes can be considered "intoxicating liquors", they'd even have explicit authority as well].
Nam Vet
"Like other Native American reservation-based operations, Smoke Signals offers smokes tax-free, a considerable discount over prices in many states that have recently upped cigarette taxes to pay for declining budget revenues."
"I'm very concerned about the selling of cigarettes online because of the ease that children can buy them," said Rep. Bob Goodlatte, R-Va., co-chair of the Congressional Internet Caucus. "That's an issue we need to address.""
Oh I'm SURE parents give their credit card to the kids so they can buy cigarettes over the net. Oh I'm sure!"
Chief Wallace shrugged and lighted another cigarette. "If they're so bad, make them illegal," he said. "In the meantime, leave me alone."
Some do, most do not. It's up to the buyer to ask ahead of time if the customer list is revealed to the IRS.
Got THAT right!
92% of all lung cancers are smoking related.
Would you get in your car and drive if you had a 15% chance of dying?
The warnings on cigarette packs are pathetic.
Taxes are pathetic as well, the state governments taking blood money.
People should be free to smoke, but they should all of the facts.
He's a jerk!
We know the facts! We also know that "they" are telling us that french fries cause cancer.
Also, the sun, just like smoking, is a class A carcinogen. But I don't see them calling for a ban on IT.
growwwwwl........
HEY EVERYBODY, LISTEN UP!
Rome2000 is on to the fact that smoking also makes us deaf and blind, and that we've never heard these "facts" before.
WOW, THAT WAS CLOSE!
HEY! Good morning!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.