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Tuesday, April 28, 2009

House Panel approves bill to deter online cig sales/cig smuggling

This sounds like sad news for ALL online smoke shops. At least the small good news is online vendors are still allowed to deliver cigs as long as they don't deliver more than 10 pounds of cigs to their customers.

(I believe 10 pounds of cigs is the same as me placing a 10-carton order.)

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http://www.cqpolitics.com/wmspage.cfm?docID=cqmidday-000003104868


House Panel Approves Bill to Deter Illegal Sales and Smuggling of Tobacco

A House panel approved legislation Tuesday aimed at combating illegal Internet cigarette sales and the smuggling of tobacco.

The House Judiciary Committee by voice vote approved a bill that would require tobacco sellers to verify the age of buyers who purchase products online or over the phone, and would require sellers to keep delivery sales records.

The bill also would require sellers of cigarettes and smokeless tobacco to include notices about excise tax requirements and would bar shipments of cigarette or smokeless tobacco that weigh more than 10 pounds.

Sellers who violate the new rules could face up to three years in prison or civil penalties of up to 2 percent of their gross sales for the year before the violation.

As states have increased their tobacco taxes, smugglers have taken to selling tobacco products on the Internet to avoid paying local taxes, said Rep. Anthony Weiner , D-N.Y., the bill’s sponsor.

The illegal sales have affected state revenue, according to ranking Republican Lamar Smith of Texas. In California, state officials estimate that purchasers do not pay taxes on as much as 15 percent of all tobacco sold.

Before approving the measure, the panel adopted by voice vote a Howard Coble , R-N.C., amendment that would make an exception for tobacco mailings intended for consumer testing by manufacturers.

The panel also adopted by voice vote a Robert W. Goodlatte , R-Va., amendment that would express the sense of Congress that the measure does not set a precedent regarding states’ ability to collect sales tax on out-of-state entities.

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