Michigan: States hunt down online cigarette buyers

stateline.org ^ | 5-3-05 | Kathleen Hunter

[hobson]

I don't know if it applies to reservation purchases but the state AG's got the credit card companies to cut off processing for them. Now you have to send a money order.

[diogenes ghost]

The mail-order taxation regulations you referred to also apply to internet transactions. As a Florida based business, with no physical presence in other states, I am liable for sales taxes only on sales within FL. Supreme Court ruling supports this; (Quill Corp v North dakota).

[BJClinton]

...and the postal service and UPS and Fed X is reported to go along with it?

If true this will expand organized crime. Mules carrying cigarettes across state lines.

[varon]

It's the American way to shop cheap.

You've got that right and we have Wal-Mart to prove it.

Now comes a question to mind as to what Michigan crazies might intend on doing. Will the state seize or gain access to Wal-Mart records and obtain their customer identities so they can be sent an invoice for sales tax on the difference between Wal-Mart's low price and a higher price of same merchandise at J. C. Penney?

After all, isn't the act of buying the same merchandise at a lower price, avoidance of paying sales tax on a higher price?

[Always Right]

I am glad sales tax laws only effect Businesses. Tax agencies would never bother individuals if we only had a 30% sales tax, or so I have been told.

[Always Right]

This is the kind of tax freedom individuals will enjoy under a sales tax scheme.

[Dead Corpse]

Ah, no. This is what happens from having a billion and one tax laws and over reaching governments. Having ONE sales tax would eliminate this kind of crap.

[Gabz]

The proposal also would boost levies on beer, wine, cigarettes, bar drinks, prepared meals and lodging. Other lawmakers have also put forth proposals focusing on the sales tax and on so-called sin taxes.

It occurs to me, based on an earlier article, that if Maine would can the smoking ban, tax revenues would rise because folks wouldn't be avoiding the state so much..instead of raising taxes again that primarily hit the tourist industry.

Just this morning a friend told me that he and his wife will NOT be vacationing in Maine this year as they have for the past 10 years because it has just become far too expensive - and neither of them are smokers.

They have also scrapped their plans for buying property they had been talking about for a couple of years.

[Always Right]

Ah, no. This is what happens from having a billion and one tax laws and over reaching governments. Having ONE sales tax would eliminate this kind of crap.

You guys need to get off the weed. A sales tax is nothing more than a shell game. Just a different method of sucking out $2 Trillion from the economy. It is not freedom from anything. The way the sales tax is being sold make snake oil salesmen look honest.

[Gabz]

If this is about the KIDS, and if they truly believe that KIDS can order tobacco products off of the Net, what about these prescription drugs? I guess they don't care about that, do they!

Of course not.

Pharmaceutical companies ......GOOD
Tobacco companies.....BAD

[SheLion]

Ok wait.

I do order from an online company for loose tobacco. This online company has no outlets in Maine and does not charge any state taxes.

So, if there are no outlets in Maine, how can Maine demand that I pay the taxes on my online purchases?

And thank GOD I never used a credit card for my purchases. I use my debit card which is like a check. Comes right out of my checking account.

[Gabz]

Will the state seize or gain access to Wal-Mart records and obtain their customer identities so they can be sent an invoice for sales tax on the difference between Wal-Mart's low price and a higher price of same merchandise at J. C. Penney?

Please don't give them anymore bright ideas.........

[SheLion]

Pharmaceutical companies ......GOOD
Tobacco companies.....BAD

Big Pharm sure has the money, power, backing and pull, don't they?  They make me sick.

[lewislynn]

This is the kind of tax freedom individuals will enjoy under a sales tax scheme.

Yea it sounds very "empowering" to the individual doesn't it?< /sarcasm >.

And wait untill they find out there would be an additional 30% tax on all the other taxes...

A $1.00 state tax would be $1.30

The $0.39 federal excise tax would be $0.51 making the combined tax $1.81 per pack.

[longtermmemmory]

However, did not sales taxes get prohibited from the internet?

It seems to me this is a sucker situation. If they pay they are suckers. Sadly the only way to stop them is to litigate the case.

They are operating on the theory that ALL (100%) of purchases made by a resident of the state must be taxed whether in or out of the state. However the internet is has a very specific federal law exemption.

[SheLion]

"The taxing power...must not be used to regulate the economy or bring about social change."
Ronald Reagan - 1981

[New Perspective]

I agree with you. However, on our tax return for the state of Maine, we are supposed to insert the amount that we purchased in other states that we were not taxed on. Thus being good citizens who are entitled to none of our money, we are supposed to mail in the 5% sales tax.

Nope, not gonna do it.

[The Great RJ]

These state lawmakers need a lesson in basic economics. The Law of Demand states that if the price goes up, the market will respond by either buying less quantity or seeking less costly substitutes. Raising the tax on cigarettes will simply cause some smokers to quit or cut down and others to seek lower cost sources like the Internet, Indian Reservations or bootleggers. I would think the cost of enforcing these higher cigarette taxes by tracking down Internet sales, bootleggers etc. probably outweighs the additional tax revenue collected.

Perhaps these folks should re-read the old fable about the goose that layed the golden eggs.

[SheLion]

However, did not sales taxes get prohibited from the internet?

I try to keep up with all of this, but I can't remember anything about the Net and sales taxes.

Maybe someone else here will know??

[Gabz]

Big Pharm sure has the money, power, backing and pull, don't they?

Yes - and they are pushing for the higher tobacco taxes that are causing folks to find cheaper means of purchasing....including the black markets.

Even the Federal GAO has come out AGAINST higher state cigarette taxes because of the growing black market they are creating.

FORCES columnist Norm Kjono has a couple of good pieces on the "Butts to Bullets" connection of higher cigarette taxes and the funding of terrorists.

We all need to remind our "elected officials" that they work for us and should not be aiding the enemy which is what they are doing by assisting in the increase of black marketeering in tobacco products. Giving aid to the enemy during time of war is an act of treason.