Hunting Bargain Hunters

Jacob Sullum | January 21, 2005

CNS News reports that New York City's Finance Department is sending threatening letters to smokers who buy cigarettes online, thereby avoiding the city's $1.50-a-pack tax. (With a combined city and state tax of $3 a pack, on top of the federal tax of 39 cents, New York City is the most expensive place in the country to buy cigarettes, which cost $7 to $8 a pack there.) The letters demand payment of back taxes, totaling thousands of dollars in some cases, and warn that failure to pay within 30 days will trigger fines of up to $200 a carton.

Not only that, but "failure to pay the required cigarette tax could eventually lead the Finance Department to file a judgment against you in court, allowing the Department to take more severe collection actions, such as garnishing your wages and taking money from your bank account to pay the tax due. Such actions would damage your credit, making it difficult to buy a home or obtain a loan."

The city, which obtained the names and addresses of online cigarette buyers by court order from the defunct cigaretteoutlet.com, has sent out hundreds of letters and plans to mail thousands more. According to CNS, "The city claims it will not penalize citizens at this time who purchase tobacco products from Indian tribes, whose sales are tax-exempt, or people returning home from vacations where they purchased duty-free cigarettes."

At this time? Might agents of the Finance Department start keeping tabs on the cigarette purchases of vacationing New Yorkers? And can New Yorkers who avoid the city's sales tax by shopping online (or going to a mall in New Jersey) expect similar treatment?

Comments

|1.21.05 @ 9:53AM|#

People wonder why I laugh when told it's a free country.

|1.21.05 @ 10:07AM|#

Twba, don't sully the whole country with NYC's idiocy. Imho, anyone who still chooses to live there is insane.

"Purchases of unstamped or unlawfully stamped cigarettes require the consumer to pay the New York City tax on those cigarettes," reads the letter sent out to the consumers.

Gee, I seem to remember something similar from my American History classes... can't quite put my finger on it though...

|1.21.05 @ 10:10AM|#

Of course, a smoker could rent a PO Box in Yonkers for say, $30/year; it would pay for itself after 20 packs.

Then again, why not just go to Yonkers to buy your cigs?

|1.21.05 @ 10:11AM|#

It's actually a good thing to teach the average person to distrust and despise big government.

|1.21.05 @ 10:15AM|#

While this will raise the ire of a few people, it's going to have to take a more ridiculous government action to cause a revolt.

David Rollins|1.21.05 @ 10:28AM|#

Don't diss NYC, it is still the most capitalist / objectivist place in the country. The rich people here don't pay taxes anyway, as their "primary residence" is in the Hamptons, Florida, etc.

I started to panic when I read this, until the part about buyers from indian reservations not being prosecuted. Until the Free State Project comes online, buying my smokes from "another country" is my small bit for liberty.

In my neighborhood (Harlem) there are guys who drive to Virginia / NC and bring back Newports for sale at $5. So far I've been unsuccessful in getting my local hood to carry Parliaments.

|1.21.05 @ 10:56AM|#

"So far I've been unsuccessful in getting my local hood to carry Parliaments."

Maybe they prefer Funkadelic.

|1.21.05 @ 11:52AM|#

i've always been miffed why anyone would want to live in NYC or LA.

cigarette smuggling becoming more profitable than drugs. with a lower penalty. gov't just refuses to learn history's lessons.

|1.21.05 @ 12:13PM|#

or you can buy your ciggies on long island at 5 and a quarter a pack.

part of the reason i live in nyc is because the rest of the country looks like long island, with varying concentrations of strip malls. however, cheap ciggies are worth the eight bucks on the LIRR to some (if you buy by the carton)

|1.21.05 @ 12:26PM|#

And don't even think of quiting the habit - the penalty for conspiracy or tax evasion is much worse.

|1.21.05 @ 2:54PM|#

Can New Yorkers who avoid the city's sales tax by shopping online (or going to a mall in New Jersey) expect similar treatment?

New York *State* requires you to declare your untaxed online purchases on your income tax form. So when I get arrested for buying cigarettes online, will I go to a city or a state prison?

|1.21.05 @ 6:36PM|#

If you live in Manhattan and you have access to a car, take a road trip some Saturday to various Indian reservations located in the state; you can easily get there and back in one day. They sell cigarettes. I discovered this after doing some online research; go to Google and type in the words reservation cigarettes "New York".

This information provided for entertainment purposes only.

|1.21.05 @ 6:37PM|#

I think there's one on Long Island.

|1.21.05 @ 6:41PM|#

A cut'n'paste job:

http://www.poospatucksmokeshop.com/about.html

TAX FREE: The Original Poospatuck Smoke Shop is located on the Poospatuck Indian Reservation on Long Island, NY. Sovereign Territory of the Unkechaug Indian Nation. For years, attempts were made by the State of New York to collect taxes on the sale of cigarettes and
gasoline on Indian lands. However, on May 22, 1997, Governor George E. Pataki repealed all regulations concerning the imposition of sales and excise taxes on transactions which take place on Indian Territory in New York. He stated:


"Let me make my message to all Indian nations clear: It is your land, we respect your sovereignty and, if the Legislature acts as I am requesting, you will have the right to sell tax-free gasoline and cigarettes free from interference from New York State."

In a fatal blow to the opposition, the New York State Appellate Division, Third Department in a unanimous ruling stated:

"Because of Tribal immunity, the retailers cannot be sued for their failure to collect the taxes in question, and State auditors cannot go on the reservations to examine the retailers records, "Matter of Association of Convenience Stores of NY vs. Urbach".


"This is not a question of an exemption, this is a question of immunity. The tax cannot be levied."


The Original Poospatuck Smoke Shop was a leader in the fight to protect the sovereignty of Unkechaug Nation lands. We are proud of our contribution to the struggle and will continue to resist any attempt to charge, collect or impose any illegal duty on our territory. This is not just about cigarettes or gas, this is the lawful exercise of Sovereignty.

The original Poospatuck Smoke Shop is also the only shop on the Poospatuck Indian Reservation that makes a standard substantial contribution to the Unkechaug Nation as a way of saying thank you for the permission to do business. The consumer who purchases from our site not only buys at a great discount, but also makes a statement about protecting the rights and obligations of our people.


WE DO NOT USE SOVEREIGNTY TO GENERATE CAPITAL
WE USE CAPITAL TO PROMOTE SOVEREIGNTY

|1.22.05 @ 12:15PM|#

Jennifer,
You got me thinking...
Rather than going to the trouble of declaring a free state up in New England, wouldn't it be easier for each of us to declare ourselves Indian? (I should post this idea on the Advocates for Self-Government site.)
I have a leg up: part Cherokee.

And Rev. Goiter,
NY state government idiocy doesn't cause "revolt," it causes smuggling.
During the 1808 Embargo Act under Thomas Jefferson, New Yorkers were smuggling potash into Canada in return for English-made goods.

|1.22.05 @ 12:46PM|#

Problem is, Ruthless, not all of us have the DNA necessary to pull that off.

|1.22.05 @ 1:04PM|#

Stick a feather in your hair and call yourself an honorary Indian.
Or an ornery one... whatever!

|1.22.05 @ 9:25PM|#

Yankee Doodle joined a tribe
To evade statist baloney
Stuck a feather in his hair
And called it Haudenosaunee*

*Iroquois