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 cheap cigarettes
online state 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 cheap cigarettes online excise tax or advise the customer
to pay.
Possession of more than 71/2 cartons of untaxed cigarettes is a misdemeanor
the first time and a felony on the second offense.
But so far, even though cheap cigarettes online 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 because of the higher cost. More likely,
they're buying smokes cheap cigarettes online 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 near the City-County
Building.
The newsstand is busy all day cheap cigarettes online 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 to Kentucky where
the cheap cigarettes online 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 cheap
cigarettes online be tripped up by a new state law.
Then again, maybe they won't be.
