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 am. The dead of night thing isn't new. They need to be watched like a hawk or owl.
Yeah, right. Try googling Black Market Freon.
No, it isn't. The really bad points thing is, though.
LOL One more cigarette tax hike in Indiana, and I'm making a wetsuit out of nicotine patches, and those A-holes who blew away a billion-dollar state budget surplus in 2 years can kiss my hairy butt!
LOL! Way to smack-down that bean-counting Statist there, Elmer! I believe that during the War of Independence, people of that mindset were referred to as "Tories" and "Loyalists".
Well, considering that some of the Founders initially gained their fortunes through SMUGGLING to avoid TAXATION by the CROWN, I proudly wrap myself in BOTH FLAGS:
And furthermore, IMHO, we are in desperate need of another one of these:
OUCH! Good slam there, Chef!
My dad and sister make money on the side by preparing tax forms, but they've both told me that they wouldn't NEED to prepare tax forms on the side if they got to KEEP more of their original salaries.
BTW, I LOVE these FR threads where we have two sides that vehemently disagree, because I LOVE a good scrap! (Dad used to pick arguments with me to sharpen up my debating skills, God bless him!)
Reminds me of the time an old girlfriend and I flew to Cancun, Mexico, and I blazed up right in the airport.
She gave me a shocked look and said, "You can't smoke in the airport!"
To which I replied, "Hell, this is Mexico, baby! There ain't no law down here!"
Ever tried any of Sammy Hagar's Cabo Wabo-brand tequila? Heaven in a bottle, and at $40 a pop, it had better be! ;-D
I've found that the Farmer's Gold brand suits my Wife and I best. One of these days, I'll have to get an ounce of that Peter Stokkebye's. I found a nearby shop that sells it pretty fresh.
RUSH fan, are ya? Seeing your screen name made me fire up 2112 and A Farewell To Kings.
I condone doing whatever it takes short of violence to get some self-righteous prick out of my face. And that includes puking on the shoes of any wanna-be Carrie Nations who object to my smoking and drinking.
/ got a nasty head cold, using the old British method of curing it: Go to bed, and place your hat on the bedpost. Drink whiskey until you can no longer see the hat...
Cheers
Well if you live close enough, you should go to NH. The prices are minus all the taxes. for premiums 28. to 32.00 depending, for a carton. You can do much better when they have specials, or if you buy discount or generic brands.
Yeah, you know it.
Attention all planets of the solar federation
We have assumed control
We have assumed control
Thanks! I'm in the Boston area and it would be a nice day trip.
Probably be able to find a place and have a cigarette with my lunch.Now THAT would be lovely.
You're quite welcome!
How about getting rid of all taxes...except maybe a 4 or 5% income tax.
And use the revenue to fund the military and keep the infrastructure repaired and that's it.
Get rid of all social programs and entitlement. If the people on FDR's Ponzi scheme can't get by? Tough. They should have planned better for their retirement. I started working when I was 16, almost 2 years ago, and the month after I started I opened a Roth IRA and I contribute to it bi-weekly. Its not my fault they didn't think past the ends of their noses.
I hate all welfare, too. These morons should have paid attention in school. Then they'd have a decent job.
But why should I have to pay for these people's lack of foresight and stupidity? F**K 'em.
Guys, The above link is to an article about past transactions being taxed by the state. Is or isn't the U.S.A. Constitution with it's amendments the "LAW of the land"???? Peace and love, George.
Need another cup of coffee.
RICO vs. Jenkins
04.20.2005
An appeals court won't reconsider its decision barring the Justice Department from seeking $280 billion in a lawsuit against cigarette companies.
In a vote Wednesday, the U.S. Court of Appeals for the District of Columbia Circuit divided 3-3 on whether to reconsider the case, according to a Justice Department spokesman.
Officials said the government has not decided whether to appeal the decision to the Supreme Court.
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