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Smokers asked to cough up taxes for Web buys
CNET News.com ^ | February 18, 2005, 3:31 PM PST | Alorie Gilbert

Posted on 02/21/2005 6:46:21 AM PST by Zon

Hundreds of Michigan residents are getting a big surprise this tax season--hefty tax bills for cigarettes they bought online over the past four years.

The state sent the bills to 553 residents last week after subpoenaing 13 online tobacco shops for names of Michigan customers and their order histories, a Michigan Treasury Department spokesman Caleb Buhs said on Friday. The tax bills are based on information from just one store, and the state expects to collect more names from the others.

Collectively, the people receiving this first round of bills owe the state $1.4 million, an average of $2,500 per person, Buhs said. They have until March 14 to pay. 

"At its most fundamental level, this is an issue of tax fairness," State Treasurer Jay B. Rising said in a statement. "It is only right that out-of-state vendors, who conduct business only online and at arms length, follow the letter of the law. These taxes are collected by brick-and-mortar businesses in Michigan, and Internet vendors should not be allowed to skirt their responsibility."

Michigan, which levies a $2 tax on every pack of cigarettes, collected $993 million in tobacco taxes last year, Buhs said.

eSmokes, one of the top tobacco sellers on the Web, cancelled thousands of orders to Michigan customers after hearing about the tax crackdown, an eSmokes representative said. The representative would not discuss whether the store has been subpoenaed by Michigan or any other state.

Michigan did not disclose which companies it has subpoenaed.

Other states, including California, Washington and Wisconsin, have launched efforts to collect tobacco taxes from residents who dodged them online. A 2002 report (click for .pdf) from the U.S. General Accounting Office said most states tax the sale of cigarettes, and that online sales have cost them millions of dollars in lost revenue.

Internet shops that don't tell states about tobacco purchases by people other than licensed distributors are flouting a federal law known as the Jenkins Act. Laws that exempt online retailers from collecting sales taxes do not apply to tobacco excise taxes, the GAO report said. 


TOPICS: Business/Economy; Crime/Corruption; Extended News; Front Page News; US: Michigan
KEYWORDS: addiction; cigarette; ecommerce; funnyheadline; michigan; pufflist; smokers; tax; taxes; tobacco; tobbaco; wackyheadine; wackyheadline; wasteofmoney
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To: Mears
"There is a company in sales tax free NH that advertises IN MASSACHUSETTS to come and buy in tax free NH.The Bay State allows that ad,though,and then wants people to declare the taxes on their DOR form. "




What I don't understand about this, is, if you can legally go to NH and buy ciggs, which I know you can, as long as you don't buy over 60 cartons, why isn't it the same for online?? It makes no sense!

I could make a suggestions to these online dealers, but wouldn't post it in a forum, no telling who is trolling. However we can send to relatives in other states, just get them for them and mail them. That is an option for someone who has friends or relatives who live in low tax areas.
161 posted on 02/21/2005 10:26:42 AM PST by gidget7
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To: Zon
You continue to obfuscate rather than back up your claim.

What claim ? The one where you said a legal tax that goes back to the beginning of the country, and is applied as a tax on the purchase just like the tax you support is bogus and I disagreed ? That claim ??

162 posted on 02/21/2005 10:27:53 AM PST by Raycpa
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To: Trout-Mouth
My personal experience/observations (fm: Calif):
The Euro cig sites (mainly Russia & Switzerland) are permanently "outta da game"
Indian smoke shops are no deal once S&H is added.
Most viable 2 choices: quit or roll yer own
163 posted on 02/21/2005 10:28:02 AM PST by TheOracleAtLilac
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To: Chef Dajuan
Whattamatta? Afraid you'll lose business if tax laws are dramatically curtailed and the burden of excessive taxation removed from our backs?

The one thing about tax service's revenue is that all changes bring new revenue. Without change business would be slow and boring.

164 posted on 02/21/2005 10:29:30 AM PST by Raycpa
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To: Hunble
If any American dared to get upset about cigarette smoke, they obtained a DOUBLE DOSE of my second-hand smoke right in their face.

And smokers wonder why the nonsmokers keep tightening the noose.

165 posted on 02/21/2005 10:30:42 AM PST by Raycpa
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To: Raycpa
A contract between the people and the government which is cancelable only by the people.

Close, but no cee-gar.

It is a contract between the sovereign political subdivisions known as states and the centralized government sanctioned by the people.

The ONLY part of the Constitution that has anything to do with the people is the Bill of Rights, and that only enumerates a FEW of the rights that already exist.

It's WHY there was such disagreement on including the BOR to begin with.

Christianity is part of the Common, or Natural Law. Therefore it is Christianity that is the basis of our government. Religion of any other type is not synonymous with the American experience of Liberty!"

God . . . is the promulgator as well as the author of natural law.
Justice James Wilson, a signer of the Declaration, the Constitution, Original Justice on the U. S. Supreme Court, and the father of the first organized legal training in America.

"It is the duty as well as the privilege and interest for our Christian nation to select and prefer Christians to be their representatives, as this is a Christian republic -
Justice John Jay, Supreme Court Justice

I'll leave you with a quote taken from one of the writings used by the Founders to construct our government;

Of the Simplicity of Criminal Laws in different Governments

In republican governments, men are all equal; equal they are also in despotic governments: in the former, because they are everything; in the latter, because they are nothing.

THE SPIRIT OF LAWS Book VI By Charles de Secondat, Baron de Montesquieu

You wouldn't know a REPUBLIC if it jumped up[ & bit you on the butt!

166 posted on 02/21/2005 10:32:45 AM PST by MamaTexan (I am NOT a 'legal entity'!)
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To: Raycpa

For those ones who can't take care of themselves we have things called FAMILIES and PRIVATE CHARITIES/CHURCHES/SOUP KITCHENS/SALLY'S.

They have no right to the fruit of MY labors unless I decide to give to them out of the goodness of my heart.

http://jbs.org


167 posted on 02/21/2005 10:33:01 AM PST by Chef Dajuan (this ain't rocket science, you know. so use your knob! -emeril lagasse)
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To: gidget7
Personally, my wife and I manufacture cigarettes and make a large profit selling them to people in other states.

I love these new high-tax cigarette laws, since they only increase my profits!

Just like alcohol during the prohibition years, American citizens will continue to purchase the products that they desire. All the government can do, is increase the profits for the people willing to provide these products to the American public.

The higher the risk, the larger the profits!'

Please, oh please, make all cigarettes in America illegal!

168 posted on 02/21/2005 10:33:11 AM PST by Hunble
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To: Chef Dajuan
How about just a flat income tax of 5% for everyone?

That would work to eliminate tax planning but not enough to fund our current beast. I personally believe that 5-6% is about the max that people would pay without taking serious steps to avoid it. If it were ever passed I'd be able to make tons of money helping clients invest and make their business more profitable. It would be great.

169 posted on 02/21/2005 10:33:38 AM PST by Raycpa
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To: Raycpa

That's the idea, to starve the current beast.

Sort of like the citizens being lil' Jenny Craigs

http://jbs.org


170 posted on 02/21/2005 10:35:31 AM PST by Chef Dajuan (this ain't rocket science, you know. so use your knob! -emeril lagasse)
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To: MamaTexan
You seem to miss the fact that each state is a sovereign entity. I told you you didn't understand our government.
171 posted on 02/21/2005 10:35:37 AM PST by Raycpa
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To: MarkL
sooner or later, the states will get together & collect sales tax on internet transactions.
read this
>or this
172 posted on 02/21/2005 10:36:43 AM PST by TheOracleAtLilac
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To: TheOracleAtLilac
Most viable 2 choices: quit or roll yer own.

Well that's just great until the next politically incorrect product comes along that we can all demonize, make you feel bad for it so you don't fight back, tax the hell out of it, never mention banning it because that would kill the purpose of demonizing it, and spend it on everything else but what it was taxed from. Politicians ride every bandwagon the can to justify taken your money from you and it they are slick enough doing it you applaud them all the way to the poor farm. This is not a train that will stop, with momentum it is only a matter of time before they step on your toes and you scream and everyone else will say so what why do I care and you get hammered and start to understand. Fatty foods, alcohol, etc.. only a matter of time before it is triple in cost. I choose not to ride this train.
173 posted on 02/21/2005 10:37:18 AM PST by TheForceOfOne (Social Security – I thought pyramid schemes were illegal!)
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To: Chef Dajuan

But the beast buys his food first and gives us the bill second.


174 posted on 02/21/2005 10:37:35 AM PST by Raycpa
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To: TheForceOfOne
Well that's just great until the next politically incorrect product comes along that we can all demonize,

The tax on freon was an example of such a successful tax.

175 posted on 02/21/2005 10:38:35 AM PST by Raycpa
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To: TheOracleAtLilac
Thanks for that link. I left a couple e-mail messages around to see if they get back to me. But I was hoping for more of a personal recommendation of a specific site. I miss cheap smokes.
176 posted on 02/21/2005 10:39:08 AM PST by Gumption
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To: Raycpa

What claim ? The one where you said a legal tax that goes back to the beginning of the country, and is applied as a tax on the purchase just like the tax you support is bogus and I disagreed ? That claim ??

You dishonestly assert that I made a claim when in fact it was you that made a claim. Apparently you don't care that you further discredit yourself. That's sad.

You know exactly the claim you made. Because I keep reminding you that you made it. Here it is again and ay particular attention to the blue text because that is the claim you made.

Raycpa wrote: We either have laws we follow or we have anarchy.12

Zon wrote: How is it that people increasingly prospered as did society prior to last years new laws or new laws created decades ago? How is it that anarchy didn't ensue over the last hundred years -- save for prohibition? How is it that we don't have anarchy right now without next year's new laws or new laws yet to be created five, ten or fifteen years in the future?25

Raycpa wrote:  I assume you circuling back to arguments that I previously destroyed 73

Zon wrote: Please repost your response that you claim you destroyed my arguments.82


177 posted on 02/21/2005 10:39:18 AM PST by Zon (Honesty outlives the lie, spin and deception -- It always has -- It always will.)
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To: maryz

"Didn't Canada actually lower their cigarette taxes some because of the huge and growing black market?"

Yes, however they've crept back up since then, mostly because the gov't has successfully put a stop to the tobacco companies exporting more Canadian smokes to the US than can be sold there, then selling them (to smugglers) in the full knowledge that there were going to be smuggled back into Canada.

OTOH, city, state and federal gov'ts in the US have jacked up the taxes on smokes so high in some areas that cigarettes are actually cheaper here now that in some of those places. I paid CDN$8.75 for a pack of 25 (as they're usually sold here) yesterday. That would equate to roughly USD$5.83 for a pack of 20 (as they're usually sold in the US). I guess that doesn't really make me feel much better, but it should upset Americans who are now paying more for smokes than a notoriously "socialist" country like Canada.


178 posted on 02/21/2005 10:40:09 AM PST by -YYZ-
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To: an amused spectator
"For many years the House increased its size as the nation’s population grew, but in 1911 the number of representatives was fixed at 435

This is one of my pet peeves.

We might just as well have the one representative, rather than continuing the fiction that we're adequately represented by 435 people.

179 posted on 02/21/2005 10:41:42 AM PST by Madame Dufarge
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To: Raycpa
A lot of nonsmokers are hypocrites, fat pig sitting next to me on a park bench and can barely breath from the stress on his heart trying to pump blood through that carcass and has the nerve to tell me the smoke bothers him.
180 posted on 02/21/2005 10:41:44 AM PST by TheForceOfOne (Social Security – I thought pyramid schemes were illegal!)
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