State sends Pleasant Hill man hefty cigarette tax bill

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  • truthwolf1
    Member
    • Oct 2008
    • 2696

    State sends Pleasant Hill man hefty cigarette tax bill

    hmm. I wonder if they will twist the arm of foreign based companies also? Knowing these people. Probably YES!

    http://www.mercurynews.com/portlet/a...782&siteId=568

    PLEASANT HILL -- To get a good deal, Paul Brodman used to buy cigarettes online.

    Little did he know, those smokes weren't the bargain they appeared to be. There's no getting out of paying state taxes simply by buying cigarettes online.

    Earlier this month, Brodman received a bill for $1,398 from the State Board of Equalization for back taxes and penalties he owes for 100 cartons of cigarettes he bought online from an out-of-state retailer in 2007 and 2008. Initially, Brodman thought it was a mistake.

    "We smoked them; we didn't resell them," he said. "I wasn't selling them on the corner."

    When he bought cigarettes online, Brodman should have paid the state an excise tax of 87 cents per pack, plus a use tax of 8.25 percent on the total purchase amount.

    "We know that people make purchases out of state and online looking for a deal, and they know they're getting away with something, or they should know they're getting away with something," said Anita Gore, spokeswoman for the State Board of Equalization. "It is the law that these taxes be paid."

    Brodman says he turned to the Internet because cigarettes were "substantially cheaper" than at the corner store.

    One reason cigarettes are more expensive in California than in some other states is because voters have added several surtaxes to cigarettes and other tobacco products over the years. The base cigarette tax is 12 cents per pack. The additional 75-cent tax on each pack funds tobacco-related health education programs and disease research, medical treatment for low-income patients with tobacco-related illnesses and early childhood development programs.

    Additionally, since 1935, California residents have also been responsible for paying the use tax -- equaling the sales tax rate in the city where they live -- on cigarettes or anything else bought outside the state. If the retailer is not required to collect and report the use tax, buyers must pay it directly to the Board of Equalization.

    Under federal law, online cigarette retailers must report purchase information to state tax collectors, Gore said. Some sellers submit monthly invoices, she said, while it sometimes takes a little legal arm-twisting from state attorneys general to get the data from reluctant retailers.

    As Brodman found, it can take years for the state to catch up with debtors.

    In fiscal year 2010-11, the Board of Equalization issued 1,723 bills under the "Cigarette Internet Program," collecting about $1.6 million in revenue. Of that amount, $1.4 million was excise tax and $234,193 was use tax.

    Smokers may grumble about paying the taxes, but Gore said it's a fairness issue. When Californians buy cigarettes online, they deprive the state of tax dollars that fund schools, public safety and other services.

    "Everybody gets cheated when these taxes go unpaid," she said.

    Brodman wasn't happy to find out he's on the hook for almost $1,400, but he took the news in stride.

    "Well, I got caught. I was trying to buy them with the least amount out of my pocket at the time. I'll pay the tax," he said.

    The good news? Brodman and his wife quit smoking a few years ago when the price of a pack of cigarettes reached $5.

    Lisa P. White covers Martinez and Pleasant Hill. Contact her at 925-943-8011. Follow her at Twitter.com/lisa_p_white.
  • c.nash
    Banned Users
    • May 2010
    • 3511

    #2
    What happens if the retailer gets caught and releases the name of customers. Which sucks.
    There is no way to find out this information except from the retailers.

    Comment

    • sirloot
      Senior Member
      • Mar 2011
      • 2607

      #3
      im suprised when you go for vacation thats outside of US they dont tax you on whatever you spend from the time you leave till you get back ..always findin away to squeeze a nickle out of ya.. probably will be law by next year .. the cnuts wanna tax you for everything.. a single tax or no tax i say ! ffs you are already being taxed on your own income and any property you have.

      Comment

      • snusjus
        Member
        • Jun 2008
        • 2674

        #4
        This makes me wonder about MaKe WeBo sites, such as Buy Snus and Premium Snus. Since they're located outside the USA, are they required to report sales to Federal/State governments?

        Comment

        • sirloot
          Senior Member
          • Mar 2011
          • 2607

          #5
          i think their taxes are paid Via UPS.. i think thats what the pact act was all about.. according to them they are PACT compliant .. idk tho just hearsay

          Comment

          • lxskllr
            Member
            • Sep 2007
            • 13435

            #6
            Originally posted by snusjus
            This makes me wonder about MaKe WeBo sites, such as Buy Snus and Premium Snus. Since they're located outside the USA, are they required to report sales to Federal/State governments?
            Doesn't matter what the law says. If the government wants their sales records, they'll get them, or put them on a blacklist.

            Comment

            • Roo
              Member
              • Jun 2008
              • 3446

              #7
              Originally posted by c.nash
              What happens if the retailer gets caught and releases the name of customers. Which sucks.
              There is no way to find out this information except from the retailers.
              What about the Customs House? You don't think they write the name of the addressee in some kind of log? Does it state the value of the goods on the outside of the package? I'm not sure about that, can't remember. Don't think so, so maybe I'm wrong about this possibility.

              @ Sirloot:

              Technically, there are no limits on how much loot you can bring back into the United States from a trip abroad, but the customs authority does put limits on how much you can bring back for free.

              Full details will follow in a sec, but the two important figures are: you can bring home $800-worth of goods per person, including a measly 1 (one) bottle of wine or booze. (You can bring back more, but you'll have to pay a tax.)

              These restrictions are mainly for taxation purposes: to separate tourists with souvenirs from importers with profit motives.

              What and how much you can bring into the United States is controlled by the U.S. Customs office (www.cbp.gov), which basically views you as a small-time importer/exporter. Importers have to pay a governmental duty (tax) on any foreign-made item they bring into the country.

              However, the customs office realizes that the majority of travelers are merely bringing home items as souvenirs or gifts or for their personal use, and magnanimously allow you to bring in up to $800 worth of souvenirs and a few drops of that Italian wine for free.

              Note that this has absolutely nothing to do with the Duty Free Shop at the airport—though people constantly confuse the two. The "duty," or tax, you are avoiding by shopping at these stores is the local tax on the item (like state sales tax in the United States), not any import duty that may be assessed by the U.S. customs office. All of this is explained on the Duty Free page.

              It also has nothing to do with VAT tax refunds or Tax-Free Shopping . For the scoop on VAT and tax refunds, click here.
              Well, I Do Declare! Getting Through Customs

              In a development so shocking I checked it twice to be sure there wasn't an error, the federal government has actually made it easier to bring your stuff home.

              As of summer 2003, they doubled the cash value on goods US citizens allowed to take home without paying tax from $400 to $800 per person—so long as you've been out of the country for at least 48 hours and haven't used the exemption in the's past 30 days (rules designed to foil any small import/export sideline an airline crew member might try to get going).

              The bad news is that they haven't changed the draconian limits on, shall we say, comestibles of vice. I've got no problem with the rules limiting you to 200 cigarettes and 100 cigars, but I find it patently ridiculous that you are only allowed to bring home a single liter of alcoholic beverage.
              http://www.reidsguides.com/t_mo/t_mo_customs.html

              Comment

              • sirloot
                Senior Member
                • Mar 2011
                • 2607

                #8
                i was actualy refering to meals/rentals/tours etc

                Comment

                • truthwolf1
                  Member
                  • Oct 2008
                  • 2696

                  #9
                  Originally posted by sirloot
                  i think their taxes are paid Via UPS.. i think thats what the pact act was all about.. according to them they are PACT compliant .. idk tho just hearsay
                  That is where it get's slippery. ALthough PACT compliant maybe your state does not think so. Maybe one day those overseas records are data mined for offenders. If you cannot prove that you did not purchase tobacco products without also paying your state taxes they have a case.
                  You would think also that information would be private but these days in the USA I am not so sure.

                  Comment

                  • CoderGuy
                    Member
                    • Jul 2009
                    • 2679

                    #10
                    Originally posted by truthwolf1
                    That is where it get's slippery. ALthough PACT compliant maybe your state does not think so. Maybe one day those overseas records are data mined for offenders. If you cannot prove that you did not purchase tobacco products without also paying your state taxes they have a case.
                    You would think also that information would be private but these days in the USA I am not so sure.
                    Right, I believe PACT complaint means they filed the proper paperwork and handle the UPS tax, but there are still state taxes that are supposed to be filed by the individual. That is precisely why I stick with the Northerner family of companies, as they charge you the tax up front and you don't have to worry.

                    Comment

                    • truthwolf1
                      Member
                      • Oct 2008
                      • 2696

                      #11
                      Originally posted by coderguy
                      right, i believe pact complaint means they filed the proper paperwork and handle the ups tax, but there are still state taxes that are supposed to be filed by the individual. That is precisely why i stick with the northerner family of companies, as they charge you the tax up front and you don't have to worry.
                      Not sure what the statistics are for overseas tobacco importation but my thoughts are this "free ride" is going to be closed down in the near future with stories like these.

                      Comment

                      • NewYork
                        Banned Users
                        • Jul 2011
                        • 98

                        #12
                        Looks like the government is slowly forcing us to do EVERYTHING off the books. Work, buy, sell.... **** them and their greedy fingers. One day they will get what's coming to them. When the people have had enough.

                        Comment

                        • Bigblue1
                          Banned Users
                          • Dec 2008
                          • 3923

                          #13
                          Originally posted by truthwolf1
                          Not sure what the statistics are for overseas tobacco importation but my thoughts are this "free ride" is going to be closed down in the near future with stories like these.
                          They've been sending overseas cigarette buyers bills like this for years now......... I think the big difference comes in the pack a day compared to a tin every four. I order once a year now and those taxes here in IL are negligible it would take me 40 years to rack up that kind of tax bill at my current usage and tax rate...........

                          Comment

                          • rickcharles606
                            Member
                            • Mar 2009
                            • 2307

                            #14
                            Originally posted by CoderGuy
                            Right, I believe PACT complaint means they filed the proper paperwork and handle the UPS tax, but there are still state taxes that are supposed to be filed by the individual. That is precisely why I stick with the Northerner family of companies, as they charge you the tax up front and you don't have to worry.
                            The PACT act states that the tax must be paid before shipping, by the first person/entity causing importation into the individual state. Most states require this as well, this is where the difficulty lies... and why compliance with every state is a nightmare. Because while most states have very similar statutes regarding delivery sales of tobacco products, they're all a little different. Bottom line is yeah it sucks ass, but eventually there will be not "grey" areas for online sellers to skirt, because states are quickly realizing the potential revenue that can be collected. The Northerner hates having to collect the taxes, but because it's now a law, we do it to protect our online customers. Also, by collecting the taxes, we aren't undercutting your local snus retailer...who buys from us ;-) They don't like that by the way, lol.

                            Eventually, I want as many brands as possible to be sold in your local store. That's what I'm working to do, and we're making some serious headway, and it's only going to grow faster and faster as the months go by. I remember what it was like to buy snus online and then wait up to 14 days for Swedish post to arrive, it sucked. This is yet another reason, I'm making it available to everyone at their local shops. I know we're not in everyone's towns yet, but keep the leads coming and keep an eye on : www.snusdistribution.com for updates. I've not updated the threads here on SnusOn lately, mainly due to my personal time constraints, but the distribution site is up to date.

                            Comment

                            • Premium Parrots
                              Super Moderators
                              • Feb 2008
                              • 9758

                              #15
                              Hey Rick!!! You are THE man!!

                              Thanks bud
                              Grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to hide the bodies of the people I killed because they were annoying......





                              I've been wrong lots of times.  Lots of times I've thought I was wrong only to find out that I was right in the beginning.


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