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.
I guess you weren't here for the copyright thing, then, hey?
Proof positive that you ignore the merits of an argument if it isn't YOUR ox being gored.
You just dealt yourself out of the game, rc.
You may be a sharp bean-counter, but I won't look to you for advice on how to deal with a broken system. I'd be willing to bet that you don't really have a problem with the current U.S. tax code, either. Do you?
I propose we place a 100% tax on the services of a CPA and watch Turbo Tax sales skyrocket.
If you'd like, we can explore the history of the U.S. tax code, and various state tax codes here on this thread. I'm working on such a project for my state at the present time.
One factoid that I discovered was that my state only implemented an income tax during the mid-1960s. I started asking people, and most of them thought it had been around forever. Now, the state can't live without it.
I guess there must have waste and desolation before that...
2005: "No, its a true statement. Each smoker is free to decide the amount of tax he is willing to pay."
2010: "No, its a true statement. Each drinker is free to decide the amount of tax he is willing to pay."
2015: "No, its a true statement. Each over-eater is free to decide the amount of tax he is willing to pay."
and on and on and on and on....
Of course, but Jim settled. Does he or me think it was illegal to this day ? I'd be willing to bet that you don't really have a problem with the current U.S. tax code, either. Do you?
There are lots of problems what specifically ? The fact its based on income and not purchases ? The rate ?
Your state had no tax before 1960 ?
2005 and 2010 are true. 2015 is not. Eating is not optional.
What do you think of my proposal to tax the services of a CPA at a 100% rate?
I'd quit.
Sure you would.
Because the government is always right?
Why not "petition your representative" for redress?
You know, like you advise smokers to do.
LOL!!!!!!!!!
That's why I'm only asking questions, and not making a blanket statement until I get an answer.
I figure the company with this policy is the best place to ask. And they always call to let you know when your order is going to be shipped, I figure I'll get a call tomorrow or the next day. I have no clue as to why they don't deliver in Delaware, and couldn't find anything in a quick search of the DE state website.
Oh, good. I was beginning to think you were one of those "it's the best we've got, so we'll have to live with it" types. There's even some of those here...
It's the law, rc. If Jim wants it changed, he'll just have to outbid Disney in Gucci Gulch... ;-)
I repeat - one factoid that I discovered was that my state only implemented an income tax during the mid-1960s.
I'm finding myself in favor of sunsetting ANY tax legislation after 5 years or so. Let the thieves come in front of the people they're representing and beg for a re-authorization. None of this "Well, your great-great-great grandfather OKed this back during the War, so quit mouthing off about it. If you REALLY wanted this changed, you could talk to your Representative, you know..."
Addiction to taxes is second only to addiction to nicotine.
I'd reverse the order, myself. I quit smoking years ago. It was pretty easy - I just told myself that I loved the habit, but I wasn't going to do it anymore.
Imagine a legislator or a judge trying that with taxes. :-)
The state income tax wouldn't be practical without the Federal income tax and today's Federal income tax wouldn't be practical without the computer. FWIW.
I'm just against our lords and masters in the legislature ramming taxes, fees and garnishments down our throats, considering the history of the country.
I view the legislature like we on FR view the MSM. Where's our input, baby?
I've been noticing a trend in our state lately. The state revenooers pass some fee-grabbing scheme, and you only get to start discussing the bad points AFTER they sign it into law in the dead of night.
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