Posted on 07/19/2006 10:34:18 AM PDT by SmithL
As part of a sweeping effort to crack down on such purchases, the state Board of Equalization has obtained 450,000 invoices from out-of-state Internet tobacco sellers showing untaxed sales to California residents over the past three years.
It also has secured another 65,000 shipping records showing deliveries of 250,000 packages of untaxed cigarettes to Golden State residents and retailers.
Armed with that mountain of paper proof, state tax collectors soon will ask buyers to pay up.
For heavy smokers the tax bills could be hefty.
Consider the hypothetical case of a Sacramento smoker who might have bought 40 cartons of untaxed cigarettes since 2003 for $21 each.
The smoker would have spent a total of $840 on cigarettes and now would owe $348 in California excise tax and $65.10 in use tax. (The excise tax is 87 cents per pack. The use tax is equivalent to the sales tax in the local area, which in Sacramento County is 7.75 percent.)
Hurt by sales lost to Web sellers located out of state, California tobacco retailers for years have urged state officials to level the playing field.
. . .
Sellers whose deals are being scrutinized by the state tax agency include: smokingforless.com; www.eSmokes.com; LLP Enterprises, which operates www.cigoutlet.net; and www.cyco.net, which quit the online tobacco business in July 2003, citing mounting legal bills incurred in battles with several state tax agencies.
(Excerpt) Read more at sacbee.com ...
My state is doing the same thing, except Maine wants taxes from Catalog sales AND all Internet sales. Not just on tobacco products, but EVERYTHING!
i thought there were no taxes on out of state purchases ?
bastids......all they do is squeeze.
Out-of-state retailers are generally not required to collect state sales tax, but the consumer is required to report all of these purchases at tax time, and pay the use tax, which is the equivalent of the sales tax they would have paid if they'd bought in-state.
My bet is that a lot of people don't actually do this, assuming that the state would not have the time or the resources to actually track down these purchases and come after them for a relatively small amount. However, in the case of cigarettes, some states have decided to do exactly that...
My aunt lives in Maine. Maine=pain. Should quit whining about Kalifornistan, compared to other states.
by the time you have to pay the back taxes, it will have prob cost you tons more than the original smokes would have been, when you figure in shipping and such.
how long till they come for all internet purchases ?
This is why I don't buy cigarettes or desperately needed meds over the internet. The b@stards are there just waiting.
Pay by money order - send to a PO box - misspell your name something awful...
I don't either.
But even past that, right now they are only going after prepackaged cigarettes.
Buy your tubes or loose tobacco for stuffing over the internet and you're still safe.........for now.
Imagine the hypothetical guy who has bought $84,000 dollars worth over the past few years and resold to "friends" for a small markup...
He's gonna owe $40,000...
Thanks for the ping!
Imagine the following...
A company is legitimately set up in a totally unrelated field; call it sheet metal products and custom fabrication.
Cigarette brands are coded to correspond to what appears to be a sheet metal product.
New customers are not accepted until vouched for by three customers who have established a pattern of buying determined to be the behavior of a real smoker.
Franchise Tax Board?
Lotsa luck!
The only way to prevent it is to go after all out of state internet sales!
Good luck with that.
Best place to buy cigs is out of the back of a van in an alley.
Fortunately I live just two hours from an Indian reserve. On a motorbike, after paying for gas and a nice lunch I'm still more than $25 ahead on the price of a single carton. Cartons are $70 here in Toronto but the high-quality native brands are $29.
I disagree. I prefer buying native brands at Indian smoke shops. The problem with "back of the van" purchases is that I don't know what my patronage is bankrolling, if you know what I mean.
Maine has already started this. They want taxes on ALL Internet sales AND catalog sales. Not just tobacco products, but ALL purchases!
That is the key question. I'm sure there are legions of state bureaucrats searching for ways to force all vendors, right down to the mom-and-pop who take a few phone orders, to turn over their customer lists to the tax board...
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