Michigan busts nearly 9,000 who dodged cigarette tax
28
March 2006
Nearly 9,000 people who attempted to receive
cheap cigarettes on the Internet in order to
avoid the state's $2-a-pack cigarette tax have been
snared in the first year of a state crackdown and
forced to pay about $5.9 million in taxes.
The average tax bill was about $650, but some people have
been ordered to pay much more. Thousands more smokers could be targeted as the program
to find cigarette tax cheaters continues, said state Treasury Department spokesman Terry Stanton.
So far, only four of 13 Internet sellers the state subpoenaed
last year agreed to turn over names of their clients. The state has not yet taken legal action
against the vendors who haven't handed over their lists of buyers.
Michigan was among 10 states to crack down on online
cigarette buyers in 2005 to recover unpaid taxes. Two others -- Virginia and Washington
-- initiated legal action against online cigarette companies to force them to hand over
the names of their customers.
In Wisconsin, however, Gov. Jim Doyle halted the state's crackdown on Internet buyers, saying it should pursue the sellers instead.
In February 2005, the Michigan Treasury Department subpoenaed the 13 online
cigarette sellers, citing the 1949 federal Jenkins Act, which governs interstate
business. The state sought the names, addresses and purchase records of individuals
who bought cigarettes from them.
Also, major credit card companies have stopped accepting payments for online tobacco sales.
Tobacco taxes -- mostly from cigarette sales -- generated $1.18 billion for Michigan in fiscal year 2005.. |
