Skip to comments.Rolled Gold: Taxing time for smokers/PA
Posted on 08/20/2002 6:20:28 AM PDT by SheLion
HARRISBURG | -- Smokers are taking up the old ritual of hand-rolling cigarettes and the new practices of e-commerce to get around Pennsylvania's month-old cigarette tax increase.
State officials fear the two options one legitimate, one questionable could shave millions of dollars from state tobacco tax revenue.
Pennsylvania tripled its cigarette tax last month to $1 per pack to help balance the state budget.
(Excerpt) Read more at mcall.com ...
Davis is part of a trend the market is noticing.
''We're bringing back old stuff that's never sold before,'' said Mike Cramsey, a buyer for T & B Cramsey Wholesale, a tobacco shop in Allentown. He said the store has seen a big increase in sales of rolling tobacco and related products, such as rolling machines and papers that until recently he couldn't get rid of.
He's not alone.
''It took us all by surprise,'' said Jan Morgan, Tobacco Category manager for Uni-Mart Corp., which owns more than 50 Choice Cigarette Discount Outlet stores in Pennsylvania. Rolling-tobacco sales have tripled for the stores.
''We can't keep it in stock,'' said Dennis Zehner Sr., an employee at Tobacco and Cigar Connoisseurs in Allentown, where sales of rolling tobacco have gone up threefold. ''We get a shipment in one day, and the next day it's gone.''
Republic Tobacco, maker of the popular Drum and Top brands of tobacco, has expanded production facilities because of new demand brought about by increased taxes in 17 states this year, said Warren Schoening, the company's national sales manager.
Internet tobacco sales have skyrocketed alongside states' cigarette taxes. Smokers can easily find a carton of Marlboro going for less than $32 online that's 25 percent less than traditional sales.
The price includes shipping. In most cases, Web sites can offer such low prices because, unlike other retailers, they don't have to collect taxes.
When buying cartons through the Internet, people are supposed to pay the taxes directly to the state.
To make sure that happens, online retailers are required to send the customer's name, address and purchase amount to the state Department of Revenue.
It rarely happens that way at the hundreds of Web sites dealing in cheap smokes, state officials say.
Senecasmokes.com boasts that it ''does not report to any state taxation or tobacco department.''
The practice is hard to trace, harder to prosecute and costs states billions of dollars in lost revenue.
A report by the General Accounting Office, Congress' research arm, predicts revenue from Internet cigarette sales will reach $5 billion by 2005, costing states about $1.4 billion in lost revenue.
It's too soon for state officials to say, in dollars, how much Internet sales will swipe from tax revenue.
Anthony Beccone, director of Pennsylvania's Office of Criminal Tax Investigation, said his department is trying to head off the problem. Agents in Beccone's department are sending letters to about 500 Internet vendors, notifying them they must report their transactions in the state.
Making them follow the rules is the tough part, Beccone said.
The Cigarette Tax Enforcement unit has a staff of six, and the U.S. mail makes a convenient hiding place for transactions, he said.
If the violating vendor is in another state, the crime becomes a federal matter. But federal agencies have more pressing business, said Jim Crandall, a U.S. Bureau of Alcohol, Tobacco and Firearms spokesman.
''We're not as active as we would be if it were a felony,'' Crandall said. ''U.S. attorneys aren't looking to prosecute this. They have more traditionally evil criminals to worry about.''
Customer service was very helpful when I asked them about what combination of filters and tobacco gave me the product I wanted.
I will give a report as soon as I start rolling.
Oh, BTW, they shipped the same day I ordered.
Anyone remember that rant from the witch lady in NYC about going after internet or out-of-state purchases? I think some goverment agencies will be agressively prosecuting tax avoiders.
EXCELLENT, Rika! Keep us posted! It's really fun!
All we buy off the net is the rolling machines. The rest we buy at a local Smoke Shop down town. They can't keep tobacco in stock! We are like kids in a Candy Store. LOL!
At the same time inundate the population with the truly moronic Compliance Alliance campaign. Obviously the campaign is marketed towards teenagers, yet its stated purpose is to stop SHOP OWNERS from selling tobacco to teenagers. Seems to me if you wanted to get the attention of SHOP OWNERS youd have a commercial with some bearded Paki marching in place in front of the Pakistani flag shouting Allah commands you not to sell smokes to kids! in Punjabi.
Gotta love that government
Unleash the Hogs of Peace.
P.J. ORourke Parliament of Whores
Or........We Try Harder! How's that!
All of my friends (and I) have switched to pipes. Cigarette tobacco is really low quality, and cigars - decent ones, at least - are way too expensive. A guality cigar shop - even the ones in the mall - can set you up with a great pipe for $50 (anything more expensive is just cosmetics & name). Enjoy.
Oops. Should have said that it is less pleasant to smoke / smell than pipe tobacco, which has always been smoother and cooler in my experience. I have nothing against cigarette tobacco in general.
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