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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: Raycpa
Most Freepers are law abiding and not tax cheats and certainly not the kind to encourage others to break the law.

I encourage EVERYONE to roll their own and THAT is NOT breaking the law!

241 posted on 02/21/2005 2:29:32 PM PST by SheLion (The America we once knew and loved ........................is gone.)
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To: Raycpa
Most Freepers are law abiding and not tax cheats and certainly not the kind to encourage others to break the law.

You've also been on here long enough to know that they've passed enough laws to make sure that EVERYONE is breaking the law at one time or another.

It's now at a point where they get to pick and choose what to gig you for, and when.

More crock of poo.

242 posted on 02/21/2005 2:31:32 PM PST by an amused spectator (your property: guilty until proven innocent)
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To: Raycpa
B O R I N G!!!!!!!!!!!!!

And I won't read one sentence knowing the source from where  it came.  Just the same as YOU don't read the link's that "I" provide.

Boy, what a waste of bandwidth you used posting all of that garbage. ~yawn

243 posted on 02/21/2005 2:33:03 PM PST by SheLion (The America we once knew and loved ........................is gone.)
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To: TheOracleAtLilac

The 7 yr. thingy is just my mis-understanding of the law evidently. As far as past records go, I put nothing past the gov't. when they want our money. Don't forget Clinton's retro-active income tax.


244 posted on 02/21/2005 2:33:09 PM PST by Roccus (Quando Omni Flunkus Moritati)
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To: Madame Dufarge

It's confusing, I know. Not just the Jenkins Act stuff, but the age thing, and also the tax thing.

Which is why I plan to ask the cigar company when they call.


245 posted on 02/21/2005 2:34:37 PM PST by Gabz (Anti-smoker gnatzies...small minds buzzing in your business..............SWAT'EM)
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To: Roccus

Don't worry. Just tell the government to shove it and all these smoking freepers will come to your aid and pay your penalties.


246 posted on 02/21/2005 2:41:35 PM PST by Raycpa
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To: an amused spectator; Raycpa
The Neidermeyer of Free Republic is elated that a successfully demonized segment of the population has been singled out to carry a disproportionately huge tax load, as long as he benefits. He's all for the "pick and choose," because he's not in the chosen group for the moment.

He subscribes to the Wahabi school of taxation, and, additionally, craves attention.

The purpose of argument is to get the last word, plain and simple.

247 posted on 02/21/2005 2:42:31 PM PST by Madame Dufarge
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To: SheLion; Madame Dufarge

As I've said it is all very confusing and I guess I just added to the confusion. I had pinged you all to my original post about the cigar company because they had listed Maine as one of the 5 states they will not ship to.

But they only sell cigars and cigar supplies (humidors, cases, etc) not loose tobacco or cigarettes.


248 posted on 02/21/2005 2:43:11 PM PST by Gabz (Anti-smoker gnatzies...small minds buzzing in your business..............SWAT'EM)
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To: an amused spectator
that they've passed enough laws to make sure that EVERYONE is breaking the law at one time or another.

Just curious. What exact number of laws is the limit so that we no longer have to follow any of them? Is it 10,000 ? Who set the limit ? If one state hits the limit then are we free in all other states ?

249 posted on 02/21/2005 2:43:51 PM PST by Raycpa
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To: Raycpa
...certainly not the kind to encourage others to break the law.

And furthermore - were you sleeping during the early years of Free Republic? We were accused of law-breaking on a massive scale, if you'll recall.

How come you associated with pirate riff-raff like us then? ;-)

I'll call the state tax pirates and revenooers exactly what they are: thieves under the color of "law". Your state revenooers rarely let you vote on taxation of any consequence, unless it's a choice of cutting your own throat or wrists.

I'll bet you didn't get a chance to vote on THIS state taxation question in Connecticut, did you? Naw, your (**snicker**) "representative" ran up the Jolly Roger in your name, I'm willing to bet without checking. :-)

250 posted on 02/21/2005 2:45:12 PM PST by an amused spectator (your property: guilty until proven innocent)
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To: Madame Dufarge
The Neidermeyer of Free Republic is elated that a successfully demonized segment of the population has been singled out to carry a disproportionately huge tax load

We both have the same tax rate on cigarettes. I just chose to pay less than you. If you desired, you could lawfully pay the same amount of tax on cigs as I do.

251 posted on 02/21/2005 2:48:01 PM PST by Raycpa
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To: Raycpa
Just curious. What exact number of laws is the limit so that we no longer have to follow any of them? Is it 10,000 ? Who set the limit ? If one state hits the limit then are we free in all other states ?

You might want to refer back to the Revolution. Apparently, the Founders determined that the Crown had decided that their property was guilty until proven innocent, and that it was going to go to sate the appetites of the various Crown officials. That's just about when they decided that the Crown had passed enough laws...

252 posted on 02/21/2005 2:48:18 PM PST by an amused spectator (your property: guilty until proven innocent)
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To: MamaTexan
WOW!

You did not explain it very well, but you are like a drink of water in a desert. You actually understood the concept of Natural Law.

For that my dear Freeper, you get an award.

253 posted on 02/21/2005 2:50:00 PM PST by Hunble
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To: an amused spectator
And furthermore - were you sleeping during the early years of Free Republic? We were accused of law-breaking on a massive scale, if you'll recall.

I really don't recall any suggestions other than orderly protests.

I'll bet you didn't get a chance to vote on THIS state taxation question in Connecticut, did you? Naw, your (**snicker**) "representative" ran up the Jolly Roger in your name, I'm willing to bet without checking. :-)

so you would rather have a democracy ? Do you think tobacco taxes would be less ?

254 posted on 02/21/2005 2:51:15 PM PST by Raycpa
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To: Gabz
But they only sell cigars and cigar supplies (humidors, cases, etc) not loose tobacco or cigarettes.

I think the Maine law applies to all tobacco products, while the Jenkins Act applies only to cigarettes.

I could be wrong, wouldn't be the first time.

255 posted on 02/21/2005 2:51:51 PM PST by Madame Dufarge
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To: Raycpa
We both have the same tax rate on cigarettes. I just chose to pay less than you. If you desired, you could lawfully pay the same amount of tax on cigs as I do.

rc, this is a disingenuous argument, and you know it. The point is that the states are skinning too close to the bone. The item being taxed is immaterial.

256 posted on 02/21/2005 2:52:28 PM PST by an amused spectator (your property: guilty until proven innocent)
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To: Raycpa

I roll my own.


257 posted on 02/21/2005 2:52:41 PM PST by Madame Dufarge
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To: an amused spectator

The founders had no tax when they won independence ?


258 posted on 02/21/2005 2:52:54 PM PST by Raycpa
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To: an amused spectator
rc, this is a disingenuous argument, and you know it.

No, its a true statement. Each smoker is free to decide the amount of tax he is willing to pay.

259 posted on 02/21/2005 2:54:15 PM PST by Raycpa
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To: Hunble
For that my dear Freeper, you get an award.

Li'l ole me?

(Grin)

For the not explaining very well.....I'm WORKING on it!

ROFLOL!

260 posted on 02/21/2005 2:55:30 PM PST by MamaTexan (It's not about God....it's about FREEDOM!)
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