Smokers billed for online cigarette sales
Thursday, May 15, 2008
HAMILTON — Smokers across the state may be a little steamed when they get a tax bill for buying cigarettes on the Internet.
The Ohio Department of Taxation sent out letters last week to residents in an attempt to collect about $2.1 million in unpaid excise taxes for cigarette purchases made on the Internet with out-of-state companies. The bills went to 5,651 Ohio residents who bought 166,026 cartons of cigarettes between July 2007 and March 2008, according to state tax officials.
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The bills average about $600 or less, and are due within 30 days of receipt, said tax department spokesman Mike McKinney.
"This is a compliance effort aimed at leveling the playing field," McKinney said. "Most people pay what's due."
Ohio law requires that cigarette sales be made face-to-face, and the Jenkins Act, a federal law passed in 1949, requires that companies furnish state tax departments with sales information when purchases are made out of state. McKinney said there are many online tobacco sellers, some comply with the law and some don't.
"In the Internet age, it has become a bigger issue," McKinney said. "In the last few years, state attorney generals are aggressively requesting the information."
The last time the state billed for unpaid cigarette taxes, in 2006, it collected $568,807 from 1,610 individuals for online purchases made since 2002.
The bills also include a voluntary form to pay cigarette state and county sales taxes.
The cigarette business is slowing down and many smokers complain about high prices, said Oscar Cerrillo, who works at Zips Tobacco on High Street. One new customer at Zips received a large tax bill from a year's worth of ordering cigarettes online, Cerrillo said.
"He didn't know that he owed taxes," Cerrillo said. "He paid the price later on. He learned."
Contact this reporter at (513) 820-2122 or rwilson@coxohio.com.
