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Internet Smoke Shops Lure Tax-Averse Cigarette Buyers
Newhouse News Service ^

Posted on 07/31/2002 7:51:30 PM PDT by RCW2001

Internet Smoke Shops Lure Tax-Averse Cigarette Buyers

By HARLAN SPECTOR

c.2002 Newhouse News Service

As state after cash-strapped state slaps hefty tax increases on cigarettes, smokers are flocking to Internet sites where they can buy tax-free.

Hundreds of Internet smoke shops have come online in recent years, offering a vast selection of premium and discount brands and the enticement of tax-free smoking.

Anti-tobacco activists complain that Internet vendors are unregulated, making it easy for kids to buy online.

Meanwhile, some states are looking for ways to collect the excise taxes cigarette smokers are dodging. Massachusetts and other states have sought customer names from Internet vendors, but they have little leverage to force the issue.

The Ohio Department of Taxation asks a handful of out-of-state vendors for customer lists every year.

"We haven't had very good response," says department spokesman Gary Gudmundson.

"None of these (vendors) report," says Gary Kirschner, chief executive of eSmokes.com. Kirschner says his Internet smoke shop now has 450 competitors online, compared with 30 when his company started in 1999.

"Eighty percent are Indian reservations," he says. "They never report anything to anybody." Sales of cigarettes on Indian reservations are exempt from state and local taxes by law.

Demand is greatest from high-tax states like New York and New Jersey, which levy the nation's highest smoking tax -- $1.50 per pack.

Kirschner says eSmokes also is seeing a jump in customers from Pennsylvania, which raised its tax to $1 a pack on July 15.

New York tried to outlaw Internet and mail-order cigarette sales, but a federal judge struck down the provision last year.

Rep. Martin Meehan, D-Mass., is drafting legislation in Congress to prohibit Internet sales to minors and require that cyberstores be licensed in every state in which they do business.

Age verification at dirtcheapcig.com is typical of Web vendors: "Click here to enter only if your (sic) are 18 or older".

Dr. Rob Crane, a Columbus, Ohio, family physician and anti-smoking activist, says Internet sales threaten efforts to reduce smoking rates with higher taxes.

"It ought to be illegal to sell across state borders," says Crane, who is also part of a campaign to raise the smoking age to 21.

The 55-cent-per-pack tax in his state, where adult and teen smoking rates are among the highest in the nation, may not be enough to drive large numbers of smokers to Internet vendors. Shipping charges keep Internet prices in the ballpark with brick-and-mortar retailers.

Tobacco dealers dispute evidence that higher taxes discourage smoking. They say the tax burden only shifts dependence to low-cost brands and out-of-state vendors.

"It's not people giving up the habit," says Joshua Sanders of the Ohio Council of Retail Merchants.

"They're just going somewhere else."

(Harlan Spector is a reporter for The Plain Dealer of Cleveland. He can be contacted at hspector@plaind.com.)


TOPICS: Extended News; Government; Miscellaneous
KEYWORDS: pufflist
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To: Nam Vet
Just what part of free trade between states so specifically addressed in the Constitution does this assh*le not understand?

Congress has banned most private interstate transfers of handguns, and those are even supposed to be protected by the Second Amendment. I can't see how anyone could make a plausible (to today's courts) constitutional argument that Congress doesn't have the authority to restrict interstate cigarette sales [btw, if cigarettes can be considered "intoxicating liquors", they'd even have explicit authority as well].

41 posted on 07/31/2002 11:05:22 PM PDT by supercat
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To: brat; All
I too just bookmarked that site. Being a little older than most, I remember cigs at $.25-35 per pack. While I was in Vietnam they sold all cigs for $1.00 per carton, but we only had a selection of 5-6 brands usually. If ya ever got to the Cho Lon (sp?) exchange in Saigon, they had a few more brands. Of course combat pay was $2.00/day then as I recall.

Nam Vet

42 posted on 07/31/2002 11:11:38 PM PDT by Nam Vet
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To: Nam Vet
I just gotta say it...Thanks for serving!
43 posted on 07/31/2002 11:13:23 PM PDT by seeker41
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To: PJ-Comix; Just another Joe; Gabz; Great Dane; Max McGarrity; Tumbleweed_Connection; red-dawg; ...
Smokers Fed Up With Prices Take to Cyberspace

"Like other Native American reservation-based operations, Smoke Signals offers smokes tax-free, a considerable discount over prices in many states that have recently upped cigarette taxes to pay for declining budget revenues."

"I'm very concerned about the selling of cigarettes online because of the ease that children can buy them," said Rep. Bob Goodlatte, R-Va., co-chair of the Congressional Internet Caucus. "That's an issue we need to address.""

Oh I'm SURE parents give their credit card to the kids so they can buy cigarettes over the net. Oh I'm sure!"

44 posted on 08/01/2002 1:03:58 AM PDT by SheLion
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To: Zon
When asked how many cartons of cigarettes he sells per month, Chief Wallace, a stocky man wearing two braids, denim shorts and flip-flops, responded, "It's none of your business."

Chief Wallace shrugged and lighted another cigarette. "If they're so bad, make them illegal," he said. "In the meantime, leave me alone."

Read Their Lips: No Taxes/New York

45 posted on 08/01/2002 1:11:55 AM PDT by SheLion
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To: Bella_Bru
'Kiss my butt nico-nazis!' ping! :-)


46 posted on 08/01/2002 1:13:57 AM PDT by SheLion
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To: SheLion
Oh sure for the RINO Bob Goodlatte its all for the children. What he's really upset at is the lowly peasants are thumbing their nose to the lords of the manor in the goobermint. How dare they!!!
47 posted on 08/01/2002 1:14:57 AM PDT by goldstategop
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To: RCW2001

48 posted on 08/01/2002 1:16:04 AM PDT by SheLion
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To: blondee123
As if mommy and daddy are going to give the credit card to the kiddies to buy cigarettes over the net! LOL! Too funny!
49 posted on 08/01/2002 1:17:57 AM PDT by SheLion
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To: VA Advogado
Actually, there is a federal law that REQUIRES these vendors to report the names of the people they sell to out of state.

Some do, most do not. It's up to the buyer to ask ahead of time if the customer list is revealed to the IRS.

50 posted on 08/01/2002 1:19:25 AM PDT by SheLion
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To: Freedom4US
The sad and honest truth, the biggest anti-smoking movement prior to ours was Nazi Germany, so I don't expect any of them should be offended when we call them Nazis.

Got THAT right!


51 posted on 08/01/2002 1:20:58 AM PDT by SheLion
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To: SheLion; All
15% of all smokers will develop lung cancer, which is 95%fatal.

92% of all lung cancers are smoking related.

Would you get in your car and drive if you had a 15% chance of dying?

The warnings on cigarette packs are pathetic.

Taxes are pathetic as well, the state governments taking blood money.

People should be free to smoke, but they should all of the facts.

52 posted on 08/01/2002 1:22:57 AM PDT by Rome2000
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To: goldstategop
Oh sure for the RINO Bob Goodlatte its all for the children.

He's a jerk!

53 posted on 08/01/2002 1:24:36 AM PDT by SheLion
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To: Rome2000
People are aware of the risks when they smoke. But in a free country, people should have choice to decide if they want to light up a cigar or a cigarette. Its gotten to the point where the tobacco nazis want to just run people's lives period, instead of making them aware of all the facts. And anyway, what I do with my life is none of their damned business.
54 posted on 08/01/2002 1:25:44 AM PDT by goldstategop
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To: Rome2000
People should be free to smoke, but they should all of the facts.

We know the facts! We also know that "they" are telling us that french fries cause cancer.

Also, the sun, just like smoking, is a class A carcinogen. But I don't see them calling for a ban on IT.

55 posted on 08/01/2002 1:27:55 AM PDT by SheLion
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To: SheLion
We don't see the liberals calling for a ban on the sun cause its an impractical proposition. Mustn't give em any ideas. Next thing they'll do is tax being out in the sunshine on the grounds we can catch skin cancer from it.
56 posted on 08/01/2002 1:30:35 AM PDT by goldstategop
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To: goldstategop
We don't see the liberals calling for a ban on the sun cause its an impractical proposition. Mustn't give em any ideas. Next thing they'll do is tax being out in the sunshine on the grounds we can catch skin cancer from it.

growwwwwl........

57 posted on 08/01/2002 1:41:06 AM PDT by SheLion
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To: Nam Vet
Unbelievable! Sounds like Smoker's Heaven!
58 posted on 08/01/2002 1:46:57 AM PDT by brat
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To: Rome2000; All
People should be free to smoke, but they should all of the facts.

HEY EVERYBODY, LISTEN UP!

Rome2000 is on to the fact that smoking also makes us deaf and blind, and that we've never heard these "facts" before.

WOW, THAT WAS CLOSE!

59 posted on 08/01/2002 2:45:07 AM PDT by Madame Dufarge
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To: Madame Dufarge
Rome2000 is on to the fact that smoking also makes us deaf and blind, and that we've never heard these "facts" before.

HEY! Good morning!

60 posted on 08/01/2002 2:51:09 AM PDT by SheLion
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