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.
How about answering the question.
"Do I have a problem with tobacco users encouraging others to break laws while making it sound right and risk less , you bet."
King George would have loved your attitude.
Tax on tobbaco is not a income tax. Please explain to me how a tobacco tax is bogus.
What question ? I answered yours plus more.
Do you consider a smoker who quits using tobacco to avoid paying the tax a criminal?
(In this post I'm adding "using tobacco" due to further review I realize the question may not have been clear.)
Has he committed a criminal act?
I can garuntee that you break at least one law a day, if not more than one. Welcome to the club.
When there aren't enough criminals to warrant expanding government power politicians and bureaucrats create new laws and regulations that turns evermore innocent people into criminals by a congressional vote and stoke of the pen. Those laws are in fact and effect, political agenda laws -- not objective law.
Well, was Clinton wrong or illegal when he claimed the donation of used underwear to charity at $20 per pair as a way to reduce his income? If he was illegal, as you seem to be implying I would be, shouldn't I be punished in the same manner? Ignored, like he was? My conscience can handle that ok. Or was he just being a tad wrong while I would be highly illegal?
Au contarie, from its birth until the late 1850s the bulk of revenue for the Federal government came from tariffs on imported goods; and tobacco was exported, not imported.
The second biggest generator of revenue -- though far, far behind the money raised from tariffs -- was a tax on the sale of Federal land.
Now this is not saying there was no tax on tobacco but it was no more onerous than the tax on rum and salt.
Please explain to me how a tobacco tax is bogus.
You first, explain the following from our earlier posts at 12 and my response/questions at 25.
Here are the relevant sections of each post.
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
The law provides for a deduction up the the fair market value of the property contributed. The law also provides for a tax on the sale or purchase of tobacco products by a state resident. If Clinton claimed a deduction in excess of the fair market value that was illegal. If 20 is the FMV then its not illegal. The FMV of used underwear is a subjective value.
If Clinton knowingly took a value greater than the FMV even though he could support it then it would be morally wrong but not legally wrong.
If you knowingly purchase cigs' without paying the tax that is both illegal and morally wrong.
Bookmark.
Interesting thread
Same here. I'Ve been rolling for about five years. On my second Premier loader.
Finding tobacco I enjoy is another thing.
So many choices, so little time and $$) ;)
Zon I assume you circuling back to arguments that I previously destroyed is an admission that the tobacco tax is not bogus and is not an example of new laws.
With little respect ... stuff it!.
This is the kind of guy who would have charged a use tax on boarded up windows and the tea thrown into Boston Harbor.
Becki
Don't know.
It would be fair to assume that imported tobacco is taxed upon entry and one would see that reflected in the cost price from that foreign country.
Whether the Jenkins Act applies or not, the Indian tribes are exempt, thus far.
Let me fix that for you and go tell the civil rights folks from the '60s that.
bump
WOW, I'll make note of your screen name. (in case any deep moral issues present themselves - I'll need to consult)
Boy ... am I ever with you on that!
Unlike our resident tax loving Raycpa, I'm all for a little "tea party"!
Should there ever be a tax on mental masturbation, Raycpa would have to declare bankruptcy.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.