Posted on 11/02/2002 10:59:44 PM PST by SheLion
OLYMPIA — Attorney General Christine Gregoire is trying to force an Internet cigarette dealer to cough up its list of Washington customers so the state can levy its steep tobacco tax on them.
The state Department of Revenue estimates that perhaps 40 percent of the cigarettes smoked in Washington are contraband — smuggled in from out-of-state, bought at tax-exempt Indian smoke shops on reservations or purchased by mail or through the Internet. ( CONTRABAND????)
"We estimate that contraband cigarettes maybe account for $250 million of lost revenue," (ahhhhhhh) Gregoire said. "It's lost taxes to the state of Washington, that goes without saying. It's also not fair to the brick-and-mortar store in Washington that's abiding by the law."
The lawsuit filed yesterday in Thurston County Superior Court seeks an injunction against dirtcheapcig.com, which sells cigarettes online from Kentucky, forcing the company to disclose its customers within Washington.
That would allow the state to track down the buyers and collect both the cigarette tax of $1.425 per pack and the 6.5 percent use tax — the tax the state levies on out-of-state purchases by Washington residents in lieu of the sales tax. (Good Luck)
The company bills itself as "The last refuge of the persecuted smoker."
A 10-pack carton of Marlboros sells for less than $30 on the site, compared with as much as $50 in Washington.
The lawsuit seeks to invoke the Jenkins Act, a decades-old federal law that requires dealers who ship cigarettes to customers in another state to provide that state's authorities with a list of customers every month. The law was designed to prevent large-scale tax evasion, and the state argues that it applies to Internet sales.
But Matthew Fairshter, the company's lawyer, argues that the law was designed to regulate the shipment of untaxed cigarettes from one state into another. The smokes sold by dirtcheapcigs.com are all duly taxed in Kentucky, he argues.
"They're not buying untaxed cigarettes, which is what the Jenkins Act is all about," Fairshter said. "The Jenkins Act does not regulate this issue."
Fairshter also argued that the state's lawsuit violates the Internet Tax Freedom Act, which protects online sales from taxation except where the transaction actually takes place.
"This company operates out of Paducah, Kentucky," Fairshter said. "It does no business in the state of Washington."
Mike Gowrylow, a spokesman for the Department of Revenue, said the Internet Tax Freedom Act was designed to prevent new and discriminatory taxes on Internet sales, not pre-empt existing laws such as the Jenkins Act and the use tax.
"This is neither new nor discriminatory," Gowrylow said.
In general, Internet and mail-order retailers can't be compelled to collect Washington taxes or provide customer lists unless they're physically located here.
That puts the burden of paying any taxes on the consumer, who typically doesn't show much interest in paying.
Enforcing the use tax is virtually impossible except on large items such as boats or cars that must be registered with the state.
She's an idiot. Now we KNOW it isn't about health care and THE KIDS! It's about the MONEY!!!!!!!!!!
LOL! Well, back then, there was a vending machine on ever corner. Of course, it was illegal for anyone under 18 to buy cigarettes, but they didn't enforce it.
My girlfriends and I would find a vending machine on a side street and put our change in the lots! :)
Well, not just Washington. Mayor Bloomberg upped the tax so high that a pack not costs $7.50!!!!!
Nam Vet
Hey, not to get off of the subject, but MY hubby was in Nam same time as YOU!!!!!!!!!! He was up on a hill with no trees and fired the Holister. He is sleeping now, or I would ask him what the name of the hill was.
They slept in bunkers with black scorpions and had a toilet right out in the open so you could see incoming rounds. I am sure you are familiar with all of this. Were you army???
Nam Vet
When I started smoking in the mid 1970's I don't think NY had an age limit. And cigs in a vending machine were 49cents. And that was in NYC - my my how times change.
I sure hope this internet company prevails against the State of Washington. But as another poster stated, the Jenkins Act is very different than the issue of sales tax.
When it comes to collection of sales tax you are correct, if a state is not seekingit's sales tax on other items purchased over the internet, they can not single out tobacco products for enforcement. But because of the Jenkins act tobacco excise taxes are very different. This is going to be a case of wait and see.
I started smoking at 24. I didn't start because Joe Camel told me too. I didn't start because my mom and dad smoked (mom quit when she got pregnant with me, dad when I was 11). I didn't smoke because any of my friends smoked. I didn't start smoking because movie stars "make smoking look glamorous". I started because I always loved the smell of tobacco smoke on cold rainy air, and decided to try it myself. End of story.
Reading those names of places you were gives me chills. Thank you for being there. And for coming home.
What "whining businesses"? Only folks being hurt here are smokers...you know, one in four of your friends, neighbors and countrymen? Where, by the way, did you get your belief that cigarettes "will kill most of the people that they sell to"? Bearing in mind that even the most self-righteous nico-Nazis only claim one in three. Just wondering if you people make it up as you go along...
Nam Vet
Why of course, they never really meant for you to stop, they just needed a good excuse to raise the taxes. :-}
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.