Public Education on Taxes for Internet Purchases – 7/14/05

Q: Has any state developed a public education campaign to inform adults
that they are required to pay state taxes on internet purchases of
tobacco?

A:

1. Alabama: no public education campaign
    
2. Kansas: The Kansas Division of Alcoholic Beverage Control provides information to all tobacco licensees on the taxing requirements and responsibilities of retailers to pay taxes on their products. We do not have a general program for non-retail entities or individuals informing them of possible tax liabilities relating to tobacco... at least none that I am aware of; nor for other taxable items within the state: e.g., gasoline or tires.
    
3. Michigan: Please see the article that summarizes Michigan's recent attempt to recoup internet sales tax from MI residents paying reduced prices online. I don't think recall any media campaign that raised awareness before the fact.
    
4. New Jersey: We have not done this as a public education program. Our legislature has passed resolutions to require the Federal Government under the Jenkins Act, to send to the State of New Jersey the listing of the shipments made by various suppliers to customers in New Jersey. This information is not available currently. When it is, that might be the time to pursue this campaign informing residents of the tax issue and their liability. Over land, we are protected on the East since NYC’s taxes are higher than ours and New York State is fairly close. Our western border with PA is fairly limited so there is not much cross-over traffic. There is room for PA to raise its cigarette excise tax by one dollar. Currently, only a very small amount of cigarettes or alcohol can cross our State line when brought by individuals, but this is rarely enforced for small violations.
    
   P.L. 2005, Chapter 85 goes into effect in November 2005. This requires that the retail internet vendor collect the cigarette excise and sales taxes from the NJ customer in order to ship cigarettes into the state. Payment may be credit/debit card and there must be proof that the purchaser is 18 or older. Penalties start at $1,000 minimum and raise to $5,000 sequentially.

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