ISSUE OF EASY AVOIDANCE OF STATE CIGARETTE TAXES IS BEGINNING TO BOIL OVER

The Buffalo News ^ | January 15, 2003 | Tom Precious, News Albany Bureau

[Marianne]

ALBANY - Tax avoidance by smokers has become so widespread that upward of 40 percent of all cigarettes consumed in the state are obtained through Indian smoke shops, the Internet and other places that don't charge state or local taxes, an industry group said Tuesday.

The rush by smokers to Indian retailers, out-of-state stores and Internet sites intent on bypassing the state's rising cigarette tax cost the government nearly $900 million in tax receipts last year, according to an industry-funded study by Fair Application of Cigarette Taxes, a group representing convenience shops, grocery stores, gas stations and others that sell cigarettes.

The long-simmering debate has intensified again as the industry groups seek to use the lost tax revenue numbers as leverage with government officials desperate to find cash to close a deficit estimated as high as $12 billion.

Native American representatives dismissed the study as a self-serving effort from an industry trying to take advantage of the state's budget deficit problems.

In a strange twist, Fair Application of Cigarette Taxes appeared Tuesday in Albany, allied with health care lobbyists with whom they had fiercely fought in past tax-increase battles. Both urged the state to restrict the sale of untaxed cigarettes.

"On this issue we have common ground," said Russell Sciandra, director of the Center for a Tobacco Free New York.

The health groups say tobacco consumption levels have fallen since the state last year pushed its cigarette taxes to the nation's second-highest - $1.50 per pack. However, they say the drop has not been nearly as much as it would have, had such easy ways to avoid taxes not been available to consumers.

"We want to see the full public impact of the increase in excise taxes," said Timothy Nichols, a lobbyist with the American Lung Association.

In the Buffalo area, non-Indian retailers say they have seen their revenues drop since last year's big cigarette tax increase as more and more of their customers head to Seneca smoke shops or the Internet.

The U.S. Supreme Court has said the state has a right to collect taxes on cigarette sales by Indians to non-Indians. But the Pataki administration, after once siding with non-Indian retailers and in the face of violent Indian protests, in 1997 backed off trying to collect the taxes from reservation sales.

Now, with the state facing a huge budget shortfall, industry officials believe they may have a new tactic to use in Albany to get officials to notice their plea.

The state "has a right to collect this tax to help solve the state's budget problem," said Dan Finkle, a Fulton County businessman and spokesman for Fair Application of Cigarette Taxes. His group is scheduled to hold a news conference today in Buffalo on the issue.

The group spent $17,000 on a study to look at uncollected taxes from cigarette sales. The group's consultant, using a variety of data, estimated up to $609 million in cigarette taxes went uncollected in 2001. By last year, that number had soared to nearly $895 million. Besides the state, local governments were money-losers since the nontaxed sales lowered what they would have otherwise collected in sales taxes.

[PJ-Comix]

and other places that don't charge state or local taxes.

aka Bootleggers.

[meema]

That's how I look at it, jack.

What on earth did they expect us to do, in a free country?
And if they try to shut us out of the places we are using, there's going to be a real black market! One that little old grandparents can find their way to, with or without help from our children.

[meema]

Do you really think they will ever learn that?

[Petronski]

Successful government suppression of black market activities has been acheived exactly ZERO times in all of recorded history.

[PJ-Comix]

Wasn't tobacco one of our first crops?

I wrote a paper on this topic once. Tobacco used to be a medium of exchange in colonial Virginia. Even preachers were paid in tobacco. In fact, the preachers of colonial Virginia once even when on strike because they were dissatisfied with the quality of tobacco their parishioners were paying them.

[dead]

This article makes me want to take up smoking, just so I can buy cigarettes from the Indians and piss off the statist jackasses.

[DensaMensa]

}The site - in Switzerland - advertises absurdly low prices but won't recognize my credit card numbers.

Maybe they just "collect" credit card numbers.

[SCARED]

it DID NOT cost the state 900 mil. it kept some of my,and others, money in our pocket!!!!

[ozone1]

Stuff your own cigarettes for 50-60 cents a pack.

Go to your local smoke shop, buy the better stuffing machine (around 30 bucks, I got a supermatic II). Tobacco is $9-14 a pound, tubes are $1.50-2.00 a carton. They have lights, menthol etc.
Takes about 10 minutes to stuff a pack.
You can also go to:

www.stuffyourown.com

[txhurl]

Off-topic, but did you know 1600s indentured servants put lobster limits in their contracts? Like only once a week?

Good thing the central bank came along to put an end to all those whacky transactions denominating their economy.

[TightSqueeze]

This article makes me want to take up smoking, just so I can buy cigarettes from the Indians and piss off the statist jackasses.

Don't you realize that your tax avoidance strategy subsidizes terrorism? Just watch TV, those in-the-know explain how smoking supports terrorism, oh yeah they were smoking illegal pot, not illegal cigarettes, my bad, never mind.

[Wolfie]

All joking aside, the Jenkins Act is Federal law, and if anybody thinks the Government is just going to roll over and ignore the opportunity to a) collect millions in new funds, and b) greatly expand police powers, hasn't been paying attention to the last 60 years of history.

[philman_36]

The Constitution provides no right to smoke, bust them till they bleed.
Uuh-huh...I see you've lurked entirely too long on the WOsD threads. {;^)

[Freedom4US]

No no no..

Yessmoke.com (not to be confused with yessmokes.com) out of Switzerland is legit. The only thing to remember is that the ciggies are made in the EU, while the prices are excellent they aren't quite the same as an honest-to-god US made cigarette. They are made under license. Not quite as strong.

[apillar]

In West Virginia the tax on cigarettes is currently 17 cents Gov. Wise recently proposed a 55 cent increase in the cigarette tax, the next day a group of legislators came out and said they wanted a $1 tax increase on cigarettes on the condition that the 6 cent food taxes was eliminated. It seems the only debate is how high to raise the tax.

I have to admit having a moral dilemma between my anti-tax side and my capitalist side. You see, I work in Virgina during the week, cigarette taxes are 2.5 cents in Virgina. I've already had some inquiries from friends and relatives about bringing in some cartons if the tax increase happens. I figure if I can get 20 or 30 people lined up and charge a couple dollars a carton over my purchase price and could make enough money to at least pay for my gas every week.

[cincinnati65]

Not that it's THAT foreign of a concept in the area of the country you live in, but I believe that's called "bootlegging".

[Wolfie]

Washington State confiscates cars for just that very thing.

[William Terrell]

The rush by smokers to Indian retailers, out-of-state stores and Internet sites intent on bypassing the state's rising cigarette tax cost the government nearly $900 million in tax receipts last year. . .

A tax law evidently creates an entitlement so that noncollections constitute a "loss".

. . .to close a deficit estimated as high as $12 billion.

I hear several states enacting tax measures to close a huge deficit. No one seems to ask why such a deficit exists in the first place.

However, they say the drop has not been nearly as much as it would have, had such easy ways to avoid taxes not been available to consumers.

I'm blinded by the brilliance of that statement. Will they tell us water is wet and dirt is dirty now?

Come on, New York, tell us why you owe $12 billion and who you owe it to, and what security did you give for the debt that can be siezed on nonpayment.

[bankwalker]

try here for online smokes for less than $1 per pack.

[DensaMensa]

}Come on, New York, tell us why you owe $12 billion and who you owe it to,

I give up. Tell us.