Posted on 02/04/2007 4:51:40 PM PST by Malacoda
BRICK, N.J. -- New Jersey residents who buy their cigarettes over the Internet are experiencing a big reason to quit: huge sales tax bills.
The state is cracking down on residents who buy their smokes online in order to avoid state sales tax, a development that has caught many Garden State smokers by surprise.
Brick resident Craig Mathews, 57, quit smoking last April, but not before racking up a $10,426.11 sales tax bill for buying cigarettes over the Web for years.
Another Brick resident, Tim Nolan, 52, received a sales tax bill from the state for $4,115.28 for the Pall Mall cigarettes he purchased online from July 2003 to March 2005.
Both men said they bought the cigarettes over the Internet in order to save money and didn't know that they had to pay sales tax to the state of New Jersey.
"We should have gotten a warning," Nolan told the Asbury Park Press for Sunday's newspapers. "We were ignorant of the law."
A professor at Rutgers School of Law, Mark Weiner, said under a federal law called the Jenkins Act, tobacco companies who sell their products to out-of-state consumers must report sales information to the state where the consumer lives.
According to Tom Vincz, a spokesman for the state Treasury Department, the state collects about $4 million a year from sales tax on out-of-state cigarettes.
Vincz said sometimes cigarette sellers will voluntarily offer the information to states, but often the states must demand it from the Internet sites.
I was under the impression the Jenkins Act required the tobacco companies to report their sales, not tobacco retailers.
The more corrupt the state, the more numerous the laws.
- Tacitus, Roman Senator and historian (a.d. 56-115)
I don't believe Indian Reservations will sell to you unless you can prove you are an Indian or a member of a tribe.
You are correct. I never said retailers. I said individuals.
Gotta hand it to New Jersey--they have it ALL!
LOL...Yes they will! They will ship you a 100 cartons a day if you want them.
You said the seller was required to report. Individuals can not legally sell cigarettes.
I blew the last post. It is my understanding that sales to anyone other than cigarette distributors the name and address is to be reported to particular State Agency.
"The more corrupt the state, the more numerous the laws.
- Tacitus, Roman Senator and historian (a.d. 56-115)"
Well that sums it up. Some of those old fellers were pretty smart.
Yes, it is retailers!
If you're looking to avoid paying exorbitant taxes on your cigarettes, your best course of action would be to buy your cigarettes at an Indian reservation or take a long trip down to Kentucky or North Carolina once a year to stock up on several hundred cartons.
Sorry for all my confusion. I think this is an incorrect. The tobacco retailers are responsible to do the reporting of their sales. If I am not mistaken the question of Sales Tax agreements between states was part of this issue but it was skirted because of the Jenkins requirement. When the retailer reports cigarette internet sales of say Michigan residents all sales are easily traceable because internet sales are by credit card. A simple credit card check would provides amount of sales and thus tax liability.
What you're suggesting is to evade the taxes that they'd still owe, right?
This is not necessarily true. If Cabela's for instance has a business in the State of Michigan they already have a Tax Agreement. If you buy on-line from them you will be charged tax. It is the companies that do not do business within the State but you buy from over the internet that do not have Tax Agreements that you can purchase tax free. Yes, that will end and they are working hard to eliminate it. As I said earlier, only government and business are "entitled" to the lowest rate. Joe Blow pays the bill.
Actually the SC has found that "ignorance of the law is an excuse". In 1957 they ruled in Lambert v. California that "passive" ignorance of the law is an excuse.
There is a great deal of misunderstanding about who/what is covered by the Jenkins Act, as it was rarely utilized until the advent of internet cigarette sales because of the huge tax increases being imposed by various states
Common sense would tell me that if a state is so concerned about losing cigarette tax revenue they should re-think their cigarette tax rates. Of course there is never any common sense utilized when government sees a money grab, particularly when it comes to the evil smokers.
But I wonder how much it costs these states to pursue all these records and then track down the scoflaws -- wouldn't it just make more fiscal sense to lower the tax instead of wasting even more time and tax money?
Yes it does. If a state such as Michigan requests the purchase records from anyplace, reservation or not, they must provide.
The "gotcha" here is that the internet sales outlets will tell you that they do not report their sales to your respective state. However, what they don't tell you is that they are obligated by law to furnish their sales records to whichever state requests them. I got that info first hand from a reservation I called in New York when I was going to make a purchase from them. This was after I had gotten nailed for purchases from DirtCheapCigs.com.......
My advice if you are going to make such purchases, use an alternative name and pay via money order. Regardless of the name, UPS or FedEx will deliver to the address on the shipping label..........
And FWIW, the only info that is being provided to the states is your name, address and purchase amounts. They have never been provided with sales receipts or credit card info or anything.
My argument from the getgo has been that the internet sales outlets have cart blanche to alter their sales records in order to ship massive quantities of orders to out of state buyers and distribute the sales quantities amongst many of their past customers so as to conceal their possible smuggling operations.........
I used them as an example only, sorry you missed that.....At least you did get my point.
They are not just obligated by law to furnish their sales records if requested. THE JENKINS ACT SAYS THEY MUST PROVIDE THE RECORDS. The retailers are the ones caught through subpoenas not reporting the sales. Once the State has your name and address as an out-of-state cigarette purchaser, your credit card information is right behind because the State has reason to believe you are breaking the law.
Anti-tobacco zealots enabling government tyranny example number 10,567,258.
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