State ban against online cigarette sales begins today

TheJournalNews.com ^ | June 18, 2003 | ALLAN DRURY

[VRWC_minion]

They also aren't requiring the vendor to do anything. They are putting the onus on the shipping companys.

But if the taxes are paid then the shipping company isn't being held responsible and the taxes would be paid if the vendor registered as a dealer and paid them.

[Just another Joe]

But if the taxes are paid then the shipping company isn't being held responsible and the taxes would be paid if the vendor registered as a dealer and paid them.

According to you the taxes are on the consumer, not the vendor.. Why is the vendor being held responsible for the consumer's taxes?
And why on earth is the shipping company being held responsible for either of them if a legal commodity is being shipped?

[VRWC_minion]

According to you the taxes are on the consumer, not the vendor.. Why is the vendor being held responsible for the consumer's taxes? And why on earth is the shipping company being held responsible for either of them if a legal commodity is being shipped?

Like the sales tax, the state licences and permits sellers and imposes on them a collection responibility on behalf of the state. Those types of relationships have been with us since before the founding of this country.

[Just another Joe]

Like the sales tax, the state licences and permits sellers and imposes on them a collection responibility on behalf of the state.

For those vendors within the state I can see this.
For vendors outside of the state I don't agree.
If the state does it to outside vendors, what's to stop the county, municipality, or any other government entity from doing the same?
Are you actually going to tell me that you think a mom&pop vendor should keep track of taxes for every state/county/city/town/hamlet in the USA?

[VRWC_minion]

A licensing requirement is used in many areas. As a CPA I cannot do business in another state without a license and the license subjects me to the laws of that state. An attorney cannot represent someone in an out of state court unless he is licenced. An insurance agent or securities dealer needs to be licensed in nonresident states.

Your grasping at straws.

[Just another Joe]

As any one of those things you are representing something, a person, a business, etc.
What we are talking about is sales, not service.
You may say that it is grasping at straws but we will have to wait and see if it is overturned in the courts, won't we.
I won't say you are dense but you are trying to throw up roadblocks that are only two lanes wide on a six lane road. And you're doing it only because of your hatred to tobacco smoke.

[VRWC_minion]

One more time. A requirement that a seller of goods or services needs to be licensed is not a concept that I expect any court would overturn. Its a concept that has been with us since the founding of the country.

The stumbling block that the state had in this instance was that the state could not compell and out of state vendore from being licensed if that vendor was never domiciled in NY and not subject to NY laws.

So they looked for a way to go after the carrier who was in the state and subject to NY law. They wanted to transfer the responsibility of collecting the tax to the vendor. They did this with an interesting angle. They created a law that placed the tax burden on anyone that possessed the product unless the taxes were paid even though title didn't pass to the carrier.

Quite honestly, I don't see the issue being whether the state has the right to license non residents selling products in the state. The issue will be whether the carrier can become liable if the taxes go unpaid. If the NY courts already decided they could, then the only federal issue I can think of is the commerce clause but unfortunately the carriers are being treated the same for all sales. One bad sign is the carriers have seemingly abandoned the issue and have not asked for a stay from a federal court. That isn't a good omen.

So, you might think I'm analysing it thru hate filled eyes but the reality is I have been trained to put aside my own views when doing analysis.

I will explain that there can be a number of other federal reasons to intervene that I'm not aware of. The one I am familiar with is the commerce clause because its concept effects many interstate tax transactions.

[Just another Joe]

If the NY courts already decided they could, then the only federal issue I can think of is the commerce clause but unfortunately the carriers are being treated the same for all sales.

Not ALL carriers. USPS.
And only for sales of tobacco, not sales of anything else.

[VRWC_minion]

Not ALL carriers. USPS. And only for sales of tobacco, not sales of anything else.

That is because states cannot force the feds to do anything.

Do you recall the drivers ed question ... who has the right of way at a 4 way intersection when everyone gets their at the same time. The Ambulance, The Fire Truck, the Police car or the Postal truck.

If you think the carriers will be able to use the fact that the PO isn't effected as a convincing argument, forget it. The laws forbidding competition with the PO would have to overturned first.

[Just another Joe]

The laws forbidding competition with the PO would have to overturned first.

If there are laws forbidding competition with USPS how are UPS and FEDEX still in business?

[VRWC_minion]

If there are laws forbidding competition with USPS how are UPS and FEDEX still in business?

There are specific limits on what they can and cannot carry.