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 with
lists of those to whom they sell, reported the news source.Senate Bill
504 cheap cigarettes online 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 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 cheap
cigarettes online smoking less 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 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 cheap cigarettes online
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 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 any cheap
cigarettes online 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.
