Vice Squad
Monday, March 07, 2005
Internet Cigarette Tax Surprise

Tax surprises are rarely the good kind of surprise. For the last couple of years, you've been buying your smokes off the internet, looking for good deals. And then it happens: your state sends you a bill demanding thousands of dollars in back cigarette excise and sales taxes. Surprise! "More than 530 Michigan residents received tax bills [from internet cigarette purchases] in the past two weeks, with the average individual liability being $3,200." Illinois residents will soon share in the surprises already bestowed upon Michiganers, New Yorkers, Pennsylvanians, and others. And with 44 state attorney generals soon meeting to take on internet cigarette tax evasion, the sharing is likely to spread. (Remember what happened when those attorney generals went after the cigarette manufacturers!) One woman interviewed for the linked Chicago Tribune article (registration required) suggested a query along the following lines: Do you think that similar efforts are made to collect state sales taxes on other, non-vice goods that are sold over the Internet?

The loyal Vice Squad reader, incidentally, would not have been surprised at the tax bill.

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