“Direct shipments of tobacco products present a substantial threat to public health because they help put deadly products in the hands of our children,” Lockyer said. “Their cavalier attitude toward kids' health is dramatically evidenced by sting operations that have shown just how easy it is for minors to buy cigarettes online. It's time to put a stop to these sales. I'm pleased that Senator Ortiz has agreed to author this important public health measure."

“This bill not only will protect the public’s health, but also the state’s economy,” Ortiz said. “SB 1208 will give law enforcement and prosecutors another tool to target out-of-state and overseas vendors who violate the law by refusing to verify the age of buyers, and by refusing to collect sales taxes that cost California more than $35 million a year.”

Under current state law, Internet sales of tobacco products can only be conducted when certain conditions are met. For example, the seller must verify that the purchaser is 18 or older, and the seller must either remit to the Board of Equalization all applicable taxes on the sale or include on the outside of the shipping container a notice that the package contains cigarettes and the purchaser is responsible for paying the applicable state taxes.

Federal law (The Jenkins Act of 1949) also requires that the state BOE be provided with a list of those who buy cigarettes from out-of-state vendors, as well as their addresses, so that the BOE can ensure appropriate taxes are collected. The penalty for each violation is a fine of up to $1,000 or six months in jail, but only the federal government can prosecute violations of the Jenkins’ Act.

As a result, Lockyer conducted sting operations and, in 2003, used the state’s Unfair Business Practices Act to file six lawsuits against Internet tobacco retailers who violated the state’s tax and tobacco laws. Five of the retailers stipulated to an entry of judgment against them in which they agreed to stop doing business in California and to pay penalties, costs and attorneys’ fees totaling more than $1 million. A default judgment was entered against another retailer for $4.3 million. In addition, the two largest retailers agreed to file Jenkins Act reports with the BOE dating back to January 1, 2000. The BOE is attempting to collect use and excise taxes from the California consumers who purchased tobacco products from those two Internet retailers. Also, major credit card companies have stopped accepting payments for online tobacco sales.

TUnder SB 1208, the Attorney General and other prosecutors will be able to seek fines of between $5,000 and $50,000 and/or one year in jail for those who violate the law. SB 1208 also authorizes the Attorney General, district attorney or city attorney to bring civil actions against violators, punishable by a maximum $5,000 fine. SB 1208 also expands the definition of illegal “bidis,” the handrolled, unfiltered cigarettes marketed to youth in flavors such as chocolate, strawberry and grape, to include all products that are marketed and sold as “bidis.” Under current law, (Ortiz’s SB 322, enacted in 2001), retailers are prohibited from selling “bidis” that are wrapped in temburni or tendu leaves, but retailers have gotten around the law by selling “bidis” wrapped in other plant leaves.