Hunting Bargain Hunters

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?