26 March 2008

Buy cigarettes online? Expect a large invoice.

Buy cigarettes online? Expect a large invoice.As many states raise the excise tax on cigarettes, smokers in high-tax states are sometimes tempted to go online and save money by ordering from an out-of-state discount store to avoid paying the tax.

Many states (34 by 2006) have now passed laws governing these types of sales, and at least 5 have banned direct to consumer shipment of cigarettes. Because of the myriad of complex state and federal laws affecting this aspect of business, many of the (over 700) vendors selling cigarettes on the internet have been found to be in breach of at least one state law. This breach makes them open to prosecution, and one of the common requirements during such prosecutions is that they turn over records of all their orders and deliveries.

When the state gets access to this information, it can be used to bill these individuals for unpaid taxes. I’ve known smokers who received a bill for thousands of dollars in unpaid cigarette excise taxes after purchasing online for a long time.

There is known case about a woman who received a bill for her husband’s unpaid taxes for internet cigarette purchases, after the husband had died of lung cancer. Whether or not you agree with this practice, you should at least be aware of the risks.

Rather than run the risk, why not make a serious attempt to quit smoking? Think of all the other things you could buy on the internet with the money you save on cigarettes!