Posted on 02/12/2005 2:20:01 PM PST by SheLion
Concerned about the booming trade in online cigarette sales, New York state officials have begun using a variety of techniques to clamp down on the trade, saying New York City alone is losing more than $75 million a year in uncollected tax revenues because of the sales.
In recent weeks, Attorney General Eliot Spitzer has been pushing local postal officials and private carriers to stop delivering cigarettes bought online. His office has also recently begun negotiations with credit card companies to block transactions of online cigarettes.
These efforts were given added push recently as local officials from the federal Bureau of Alcohol, Tobacco, Firearms and Explosives met with credit card executives to alert them to the various ways in which these transactions are illegal.
"The tone was very cordial and unthreatening," said a city official who participated in the presentation three weeks ago at the bureau's office in Brooklyn. "But in the end they made it crystal clear that now that the credit card companies understood the law, they would be held accountable for processing these transactions."
Mr. Spitzer emphasized that the effort has as much to do with health as money. "These sales present a significant threat to public health because they provide easy access to cheap cigarettes, which increases smoking rates, particularly among children," he said. "These illegal sales also evade state tax requirements."
Whatever their motivation, city and state officials are broadening their efforts to eradicate the business.
Two weeks ago, a judge ruled in one of the city's four lawsuits against online sellers that the city can file a revised racketeering lawsuit against Internet cigarette sellers. The ruling was the first time a federal judge has indicated that Internet sellers can be charged under federal racketeering law, said Eric Proshansky, the city's chief lawyer on the case.
After gleaning the names and the addresses from a Virginia lawsuit against one online cigarette company, the city began sending letters last month to more than 2,600 New Yorkers who officials say bought tax-free cigarettes. The letters, sent to those who bought cigarettes online from July 2002 to April 2004, give the alleged violators 30 days to pay or face interest and penalties of up to $200 a carton.
In November, local law enforcement seized 300,000 cartons of illegal cigarettes at Kennedy International Airport. Joseph G. Green, a spokesman for the A.T.F., said that the seizure was the culmination of a yearlong investigation jointly conducted by the Queens district attorney's office; federal Bureau of Alcohol, Tobacco, Firearms and Explosives; postal inspectors; and city and state tax and finance officials.
Sam Miller, a spokesman for the city's Department of Finance, said that the city loses more than $75 million a year as people duck local taxes by purchasing online. But the crackdown has drawn some criticism.
"New York is simply trying to engage in economic protectionism by limiting cigarette sales to brick-and-mortar sellers," said James L. Bikoff, a lawyer who represents several Internet tobacco sellers. "Most of the folks who are in the online cigarette business are small outfits and they typically advise the consumer to check with their own city and state's laws regarding tax rules."
New York City smokers pay the highest cigarette taxes in the country, as the state charges a $1.50 tax per pack and the city adds an additional $1.50 tax per pack. A carton of cigarettes in the city costs about $70, including $33.30 in excise and sales taxes. Online, cigarettes cost as little as $15 a carton.
Thus far, the city and the state have met with mixed results in their efforts to control the online traffic in cigarettes.
Some banks that process MasterCard transactions have begun blocking sales from certain Internet tobacco sites to customers, said Joshua Peirez, a senior vice president at MasterCard. But other banks do not. American Express currently has no policy that blocks Internet cigarette sales, said Christine Elliott, a spokeswoman for the company.
After sending a letter to credit card executives in August, Mr. Spitzer joined several other state attorneys general to send another letter pressing credit card companies to stop the transactions.
Both letters cited several reasons for the failure of Internet tobacco sellers to comply with applicable laws, including that they make no effort to verify the age of their customers and fail to report shipment of cigarettes to the tobacco tax administrator of the state into which shipments are made.
While the United Parcel Service and other private carriers have been more open to the idea of blocking the delivery of these packages, postal officials have balked at pressure from Mr. Spitzer's office, claiming that they do not have the legal authority to stop the shipments, according to city officials who have been part of the discussions. But Mr. Spitzer's office contends that the postal service indeed has the authority under federal laws that prohibit mail fraud schemes, according to a letter sent by the office.
New York State passed a law that took effect in 2003 prohibiting online and mail-order sales of cigarettes to its residents. The law was largely intended to curb tax evasion and under-age smoking, since many online cigarette sites do virtually nothing to verify the age of customers.
Efforts to stop online sales are complicated, since Internet sites are sometimes based abroad and are therefore difficult to prosecute. City officials estimate that about 80 percent of the online cigarette sales come from sites that claim Indian affiliation, which for sovereignty reasons claim immunity from laws like the Jenkins Act.
Since my divorce, that is the FIRST time a lady has EVER referenced my name in the same sentence with the word "stuck'!
D@mn!
Well, your "class of '78"
that makes YOU an "ankle biter"!!!
Take heart, NY Freepers, because we are about to witness, via the election (or annoitation, if you please) the death knell of what was once the most vibrant, unique, decandent city on the North American continent.
Under Comrade Spitzer, and his homosexual, limp-wristed stooge-sidekick Bloomberg, jobs, capital, and people will finally be left no other choice but to flee NYS & NYC. Spitzer is an empty-suited crusader, a witch-hunter who wants to subject capitilism, free markets, and indeed, personal freedoms to a dunking stoll type torture test, in the hopes of furthering his communist political agenda. He is Joe McCarthy without the patriotism, the Anti-Capitialist as opposed to the Anti-Communist. Last one out of NYC please turn off the lights.
ROFLMPJO!!!!!!!!!!!
Be happy, I got a call earlier this week that my ex-husband had died.........and the caller was asking what I knew about it....BWAAAAAAAA HAAAA HAAAAAAAA!
And my husband's class of '73 makes him a cradle robber!!!!
I am happy! Mostly because I have a digital answering machine!
When I get calls from Hawaii I know better than to answer them for I know they are from my X or a representative of the X.
I, at times can get disgruntled because if it, for I am free and clear legally, however am frustrated at times that I have to take actions i.e. screening my calls because of her futile attempts to achieve financial ground at my expense.
Enjoyable fantasy. But my nyc condo is up 25% in one year, and my property taxes actually went down. I havent seen a single property go for asking price, and when one comes available there is a mad bidding war and it's sold in a week. The stock market is headed for a huge year again in 2005, and this keeps New York swimming in cash while other cities are still recovering from the recession. Obergrupenfuhrer Spitzer will be a destructive force as the next governor for sure, but it will take a lot more than him to bring NYC down.
ICK.........I don't envy you, my FRiend.
I haven't had any dealings with my ex in nearly 10 years and his last attempt of getting money from me was about 15 years ago..........
Yup, you will find me siding with men in most situations because of witches involved, but I was one of the rare ones........the SOB was physically abusive and actually attempted to get spousal support out of me during the divorce....not only did my attorney laugh at him, but so did his.
There never was a need for him to get a lawyer because I left with what I came with and didn't want anything, the house was his. but he got an attorney figuring he could get more out of me because he had lost his job and I was making more money than he was. Like I said he was laughed at.
If the city and state are doing so well, why in heaven's name are they going after folks that want to save some money?
If the city and state are doing so well, why don't they roll back the confiscatory cigarette taxes instead of wasting more taxpayer money on trying to find the folks trying to save some money?
It makes too much sense to do that, doesn't it?
Ever been to a Communist nation? I traveled in Eastern Europe in the early 80s. The party members always lived high on the hog and stuck it to the Proles. NYC is no different.
Mr. Spitzer emphasized that the effort has as much to do with health as money
<p.
BS
Actually I AM! My daughter (32) and my son-in-law made me a VERY proud Grandma of a gorgeous grandson who is going on three in May. Yes! I am proud to say I am a "Grandma."
Thank you!
Still got that cushy state job, eh?
Not good for consumers or Indians, IMO
And your proof is where...
Don't forget, this is the same state that sent "detectives" across the river to New Jersey malls to take down the license plate numbers of cars with NY tags, and sent letters to the owners informing them that it's illegal to go across state lines to avoid paying taxes (I don't know if it's still the case, but back then, NJ had no sales tax on clothing). I know this is the case, because my father received one of those letters.
When it comes to money, as far as government is concerned (especially NY governments), "All your money are belong to US!" What we actually keep is through their "good will."
Mark
I wonder if "firebrand" isn't really Michael Bloomberg... Then they would be taking "his" taxes out of "his" pockets! lol
Mark
And I believe that this is exactly how the government will enact taxation on Internet sales of all items! For the time being, it's prohibited by law, but there will come a time when the government will decide that they want a piece of the action...
And what better place to assess the taxes than at the point of payment! Maybe they could also asses a "small" financial transaction fee as well...
Mark
"It is $75 million in tax money they are taking right out of our pockets"
Okay class.
Accounting 101...
It's NOT the Governments money!!!!
That's the only reason I got an attorney. I wanted to rest assured I would keep my house, however it was never in her name anyway.
I think I am one of the few "males" who filed for divorce because he was abused by his wife!
The whole scenario reminds me of one of the most disgustingly funny country songs ever performed.
"Get Your Tongue Otta' my mouth 'cause I is a Kissin' You Good Bye!" LoL!!
I'm glad I can look back at it and chuckle about it!
It has been impressed upon the public for so many decades by some politicians that some actually believe it to be true!
Not I.
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