Cheap cigarettes line
This loophole allows re-importers, offshore firms
buying American cigarettes tax-free, to ship them back into the country
without reflecting the excise taxes in the price charged to consumers.
Weinberg's legislation would order the online brokers to furnish the
state cheap cigarettes online with lists of those to whom they sell,
reported the news source.Senate Bill 504 requires mail-order companies
to report the names of their Indiana cigarette customers.
The companies also have to either pay the excise tax or advise the customer
to pay.Possession of more than 71/2 cartons of untaxed cigarettes is
a misdemeanor the first time cheap cigarettes online
and a felony on the second offense.But so far, even though millions
of packs of cigarettes are apparently slipping by untaxed, not much
has happened. Why all the fuss over a tiny tax stamp on a pack of smokes?
Those stamps add up -- possibly to $60 million in taxes the state's
missed out on.
The excise tax more than tripled last year. Since then, the sales of
taxed cigarettes have declined nearly 26 percent from a year earlier,
according to my review of monthly state reports. That adds up to the
millions in uncollected taxes.
Maybe people are smoking less cheap cigarettes online
because of the higher cost. More likely, they're buying smokes in low-tax
states like Kentucky or buying them by mail-order to avoid Indiana taxes.
"I can't blame a customer for trying to save some money,"
said Vince DeFabis, an owner of Delaware News Company cheap cigarettes
online near the City-County Building.The newsstand is busy all day with
people lined up for cigarettes, lottery tickets, newspapers and magazines.DeFabis
said he had met only one person who bought untaxed cigarettes by mail.Still,
mail-order sales, some placed through a growing list of Web sites, are
unfair to Indiana retailers, the sponsor of the new law says.
"We have the vendors of cigarettes here in the
state who are collecting the tax," said state Sen. Tim Lanane,
D-Anderson. "And these Internet sellers are trying to get around
doing that."Other people may just be driving cheap cigarettes online
to Kentucky where the tax on a pack is 3 cents, instead of Indiana's
55.5-cent tax.The Department of Revenue is trying to get the word out
that people can be prosecuted for cigarette smuggling.
Left unclear is the legislation's effect on sales originating
in American Indian reservations."It's only going to continue to
grow. And the only way we're going to start to really address cheap
cigarettes online any illegal actions is by passing comprehensive legislation,"
said Jamie Drogin, a spokeswoman for tobacco giant Philip Morris U.S.A.
"Online cigarette sales have grown as the prices have risen. What
the adult smokers have done is that they've sought out lower prices
in illegal venues." Smokers trying to avoid the state excise tax
by buying mail-order cigarettes may be tripped up by a new state law.
Then again, maybe cheap cigarettes online they won't
be.
