Officials at smokin 4 less, Cyco.net, Inc. and CigOutlet.com could not be reached for comment, but each of their Web sites contain warnings that buyers should be over 18. CigOutlet's site advises buyers that they are responsible for "all taxes applicable to their State, City and/or County."
Greedy high-tax states lose tobacco sales
LOUISVILLE, Ky. With Massachusetts slapping $1.51 in taxes on a pack of cigarettes and New York and New Jersey imposing $1.50 each, smokers are heading to the Internet for cheaper smokes.
About 10 online retailers have set up cyber-tobacco shops in Kentucky to take advantage of the state's 3-cents-a-pack tax. There are approximately 150 Internet cigarette sales operations nationwide.
A General Accounting Office report issued this week puts Internet tobacco sales in the United States at $5 billion by 2005 and predicts states with high tobacco taxes could lose $1.4 billion in revenue.
''We can offer lower prices because we are located in Kentucky which has one of the lowest cigarette tax rates in the nation,'' boasts cigarettesforless.com, which sells a carton of Marlboro cigarettes for $28.99, compared with $54.90 in Massachusetts.
Compounding the situation are sales to minors.
''I've yet to see one Internet company out there that is collecting taxes and verifying age,'' Mark Smith, spokesman for Brown & Williamson Tobacco Corp., told Thursday's Louisville Courier-Journal. ''It's really irresponsible what's happening right now. This stuff is dangerous, and it's going to increase as the price of cigarettes gets so expensive.''
Unlike the independent Internet tobacco sellers, Brown & Williamson collects federal and home state taxes and verifies age.
The GAO has suggested giving the Bureau of Alcohol, Tobacco and Firearms authority to take over enforcement of the Jenkins Act, which requires an out-of-state buyer's tax authority to be notified. Online sellers, however, maintain the Internet Tax Freedom Act makes them exempt from the Jenkins Act.
