|
Last Updated: Jan 31st, 2007 - 10:58:43 |
Smoking out tax evaders Buying cigarettes online not a bargain for many
Mar 1, 2006, 15:58
|
|
When Michigan increased the tax on cigarettes in 2004 from $1.25 a pack to $2 a pack, opponents predicted that cigarette sales in the state would drop as smokers went online or across the state line to purchase their smokes. Legal cigarette sales in Michigan did indeed decline as residents sought to avoid paying the 75-cents-a-pack tax increase. But if you thought you were getting a bargain by purchasing cigarettes via the Internet without paying the Michigan tax, you might want to reconsider. For about 9,000 Michiganians, buying untaxed cigarettes online has proven to be a costly venture. A year ago, Michigan Department of Treasury officials launched a crackdown aimed at stopping the rapid growth in untaxed Internet cigarette sales. Since then, the state has gotten about $5.9 million from approximately 9,000 people who thought they had dodged the state's tax. That works out to an average of more than $650 per person. If you think you managed to escape the state crackdown, think again, because officials have no intention of stopping it. Of the 13 Internet sites subpoenaed by the state in February 2005 for lists of cigarette customers, thus far only four have agreed to cooperate. But state officials are weighing their options and have vowed to take whatever action necessary to recoup lost tax revenue. That is because there is a lot of money at stake. About one in four Michigan adults smokes, and tobacco taxes provided the state with about $1.18 billion in revenue for the most recent fiscal year. So the cash-strapped state has plenty of incentive to continue to go after smokers who try to evade paying the state tax. At this point, state officials only have levied assessments against those they have found to have purchased untaxed cigarettes. But there is the potential for criminal penalties as well, since it is a felony to transport or sell 15 cartons or more of unstamped cigarettes. Our advice to smokers is to pay the cigarette tax upon purchase, and light up without fear of facing a much heftier fine down the road
© Copyright 2006 by CigarettesOn.Com
Top of Page
