Internet smokes put out for good

New York Daily News ^ | 2/14/03 | ROBERT GEARTY and WILLIAM SHERMAN

[kattracks]

Internet sales of tax-free cigarettes in New York State went up in smoke yesterday after a federal appeals court upheld a state ban on direct sales to consumers.

The ruling means more than $700 million a year in increased tax revenues for the state, according to estimates.

But it's a big blow to city smokers who save more than $4 a pack by buying online or ordering from Indian reservations that have tax-exempt status.

The ruling also applies to cigarette sales by telephone and by mail, according to Attorney General Eliot Spitzer.

The decision by a three-judge panel of the 2nd Circuit Court of Appeals overturned a lower court ruling that found a state law unconstitutional.

Cigarette companies, including Brown & Williamson Tobacco, had challenged the 2000 law, saying it discriminates against interstate commerce, restricting access to a product.

But in a 44-page opinion, the appeals court said the state law "does not prohibit New York consumers' access to cigarettes ... it merely requires that they purchase cigarettes in a manner that allows the seller to verify the buyer's age and to collect the state excise tax."

Double benefit

Gov. Pataki lauded the ruling and said the state law "will play a critical role in our aggressive efforts to prevent minors from purchasing cigarettes," as well as pumping revenue into the strapped state coffers.

The ruling means consumers can buy cigarettes only from licensed dealers who sell taxed cigarettes with the familiar stamp at the bottom of each pack.

"It will help the city and state with their budget problems," said Leonard Schwartz, president of the state tobacco wholesalers association, who estimated the state was losing $1.6 billion a year through Internet sales, cigarette smuggling and other untaxed sales.

Eric Proshansky, a lawyer with the city corporation counsel's office, said that while enforcing the ban could be a problem, law enforcement officers would cruise the Internet to make sure cigarette dealers comply with the law.

[qam1]

Well, a number of years ago, NY sent some goons to New Jersey shopping malls to take down license plate numbers of NY tagged cars. They received letters informing them that it is illegal to shop out of state in order to avoid paying sales tax (NJ didn't have sales tax on clothing).

When that happened the state of New Jersey threw those thugs from NYC in jail on charges of loitering. New York City never tried it again. Unfortunately that was the last smart thing New Jersey ever did.

Mcgreedy in New Jersey is an idiot, He keeps raising the taxes on cigarettes which makes it not worth it for some one in NYC and other parts of NY to travel over the state line to buy them (NJ cigarettes will soon be higher than other parts of NY). If he kept the taxes on cigarettes low the state would more than make up for the lower prices by many more New Yorkers (and now Pennsylvanians)jumping the border, If he kept them real low he could "corner the market" on NE states which now goes to VA and NC.

[qam1]

Random street shake downs for cigarette tax stamp inspections?

You're a lawyer, how long do you think that crap will fly?

Easy to get around, The tax stamp is on the clear plastic wrapper. Just buy one pack from NY and when you get a contraband pack just switch the wrappers..

[VermiciousKnid]

This is, of course, a disgusting display of greed on the part of NY. As far as I'm concerned, they done made their beds by raising taxes so high, and now they ought to be made to sleep in them.

And now I have a question for you legal eagles out there: According to the article, it seems that INTERNET sales in New York have been prohibited by this ruling. Fine. But later in the article it says that all sales must be made by licensed dealers in face-to-face transactions and that these dealers must pay the NYS taxes. Am I right so far?

Assuming that I've got this all straight, what about the people who actually drive to reservations to make purchases? How can NYS enforce this law on them? Where does it say in the actual ruling that face-to-face transactions which take place on sovereign Indian territory are now illegal? Will there now be roadblocks at the edges of reservations?

Regards,

PS: Oh, BTW...my husband is a cop and I can tell you right now that HELL would freeze over before he engaged in cig-tax roadblocks. I think many cops would balk at such a thing, mainly because LOTS of them smoke themselves and are also smart enough to purchase from the Indians as well...

[Leisler]

Look at it this way, it's good for the motherboard.

[MarkL]

Mcgreedy in New Jersey is an idiot, He keeps raising the taxes on cigarettes which makes it not worth it for some one in NYC and other parts of NY to travel over the state line to buy them (NJ cigarettes will soon be higher than other parts of NY). If he kept the taxes on cigarettes low the state would more than make up for the lower prices by many more New Yorkers (and now Pennsylvanians)jumping the border, If he kept them real low he could "corner the market" on NE states which now goes to VA and NC.

They couldn't do that, because it would specificly violate a central mantra of leftists: That if you lower taxes in a competative market, sales, and therefore revenues would increase. So the fact that they'd make far more money isn't as important as supporting the "big lie."

Plus, they'd be pilloried for "encouraging smoking."

Mark

[denydenydeny]

Assuming that I've got this all straight, what about the people who actually drive to reservations to make purchases? How can NYS enforce this law on them? Where does it say in the actual ruling that face-to-face transactions which take place on sovereign Indian territory are now illegal? Will there now be roadblocks at the edges of reservations?

These questions immediately came to my mind also. I can't see this applying to sovereign Indian reservations (of which there are many in NY).

[Focault's Pendulum]

Does anyone know about Yesmoke.com here.

Very reputable to do business with. Can take about two weeks for delivery, and if you order multiple cartons, don't expect delivery all at once....they're delivered seperately over a few days.

[philman_36]

Easy to get around, The tax stamp is on the clear plastic wrapper. Just buy one pack from NY and when you get a contraband pack just switch the wrappers..
Just throw the plastic wrapper away! They'll have to then write a law telling everyone that taking the plastic wrapper off is a crime.

[Gabz]

The scenario is correct - except for one missing link - Delaware is a lot closer than Virginia or NC to NJ and Penn and even parts of NY.

Even if Mommy Mein Minner gets her way and the cig tax in Delaware doubles (there are very serious doubts about that) the tax will still be so far below MD, PA, NJ and NY to still make it worth while to come across the line.

[geedee]

Sssshhhh. I only pay $14.95 a carton. Marlboro Reds.

[geedee]

Busted!! And I was gonna tease some fellow FReepers for awhile. I use them all the time. I order five cartons at a time and they've ALWAYS, ALWAYS shown up on time. From Switzerland for $14.95 a carton...Air Mail NO ADDITIONAL CHARGE!!!!!!!!!!!!!!!!!!!!!

[Marianne]

The law has no effect on walk-in sales at Indian smoke shops, and smokers can still drive to bordering states with lower taxes to buy cigarettes.
He (attorney Joseph Crangle) said the law will not prevent Seneca businesses, which have become multimillion-dollar tobacco distributors, from continuing to ship their products out of state.
See article from The Buffalo News LINK
NY State passed a law a few years ago making it illegal for Indians to sell cigarettes to non-indians at their stores on the reservations. The Indians threatened to go "on the warpath" if the state enforced the law. Gov. Patacki remembered that last time the Indians went "on the warpath" and decided not to enforce the law. As one "warpath" example traffic on some sections of the Thruway was effectively disrupted by burning tires on the road.

[Great Dane]

#43....... Gotta love your hubby. :-}

[qam1]

The scenario is correct - except for one missing link - Delaware is a lot closer than Virginia or NC to NJ and Penn and even parts of NY.

Even if Mommy Mein Minner gets her way and the cig tax in Delaware doubles (there are very serious doubts about that) the tax will still be so far below MD, PA, NJ and NY to still make it worth while to come across the line.

The only problem is that after a long drive there is nowhere in Delaware to stop and smoke them.

Sorry but the way Delaware treats smokers I wouldn't care if a pack of cigarettes cost $2 until that smoking ban is overturned all Delaware will get from me is the toll money I am forced to pay when I have to pass through the state.

[Centurion2000]

They just created a niche market in other states.

A company like mail boxes etc opens up ... for an additional 15-20.00 a month + shipping they will act as a mail forwarder .... they have a PO box where you drop stuff and they mail it to you once a month in a bulk shipment for whatever it is that you want to order online.

[Gabz]

I don't blame you a bit.

We're working on the overturning of the ban - you betcha.

And there are places to smoke, comfortably and legally, in Delaware.

Check out what is going on next weekend. Enter the site and see that we are not taking it lying down here!!!

[cajun-jack]

www.yessmoke.com.....give 'em a look

[Centurion2000]

Sssshhhh. I only pay $14.95 a carton. Marlboro Reds

Where ??

[qam1]

PS: Oh, BTW...my husband is a cop and I can tell you right now that HELL would freeze over before he engaged in cig-tax roadblocks. I think many cops would balk at such a thing, mainly because LOTS of them smoke themselves and are also smart enough to purchase from the Indians as well...

That maybe true with local departments like the NYC police but not so with the New York State Troopers. Unfortunately the reason many if not most troopers are troopers is because they are to stupid and/or unquailfied to make the police departments of their home cities so they join the troopers looking to make a name for themselves so they can later get a job in their home city.

The way they "make a name" for themselves is of course to write out a lot of tickets and make BS arrest.

The state troopers are salivating at the opportunity for another crime they can bust people and write a lot of tickets.

[sneakypete]

Another intervention by the Fed when it suits them.

Give them a little bit of credit,ok? After all,they are probably worried about illegal aliens getting sick from second hand smoke.