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Smokers dodge new tax online?

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Also by Jennifer Fenton:

Smokers dodge new tax online? (November 6, 2007)
Cruise prevention bill up for debate (October 1, 2007)

by Jennifer Fenton

Tuesday, November 6, 2007

Smokers throughout Wisconsin may look to get their fix from other states because of the $1 tax increase per pack of cigarettes passed in the 2007-09 state budget.

The new cigarette tax was introduced by Democratic Gov. Jim Doyle as a means to reduce cigarette smoking in the state of Wisconsin.

Former Senate Majority Leader Judy Robson, D-Beloit, was an advocate of the tax introduced by Doyle and helped ensure its inclusion in the 2007-09 budget.

“It’s good public policy and improves public health, and hopefully, it will help more people crack the habit,” said Josh Wescott, spokesperson for Robson, who added the money from the tax will go toward funding anti-smoking programs endorsed by Robson.

“It is improving public health and investing in public health,” Wescott said.

However, the $1.77 total tax per pack of cigarettes also applies to online purchases, according to the Wisconsin Department of Revenue.

The DOR has acknowledged many consumers may look for out-of-state vendors to buy their cigarettes.

Meredith Helgerson, spokesperson for the DOR, said people are free to purchase cigarettes over the Internet, but said consumers cannot legally avoid the new tax.

The DOR’s concern is not that purchasers will seek out-of-state vendors, but that they will attempt to avoid the cigarette tax, as well as state sales tax, by making the online purchase from another state.

As is the case with any online purchase, consumers are technically required to pay the appropriate state sales tax on all items purchased, although Helgerson said “many of these online vendors do not charge the tax, but [consumers] are still required to pay the tax.”

While the tax is required by law, Helgerson said the state of Wisconsin does not have jurisdiction to force Internet cigarette vendors to charge consumers the tax, putting the responsibility of making sure the tax is paid into the hands of consumers.

In cases where vendors do not charge the appropriate state sales tax, the individual purchasers are obliged to report all of their online cigarette purchases on income tax forms along with everything else bought online.

A federal law requires vendors to report sales to the governments of each state to which their product is sold. Helgerson said it is advised that individuals who purchase cigarettes online report these purchases on income tax forms in order to avoid an audit for tax evasion.

The tax goes into effect Jan. 1 for all cigarette purchases in Wisconsin, including Internet purchases from out-of-state vendors.

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Anonymous (November 6, 2007 @ 11:52pm):

Judy Robson's spokesperson said that the increased cigarette tax will "hopefully...help more people crack the habit."

But, in reality, this is new revenue for the state coffers so they do NOT want anyone to quit smoking. If people quit smoking, that would mean that there would be less tax revenue which means the (already oversized) state budget would not balance.

Also, has anyone had a basic economics class? Vice taxes are the most regressive taxes taxes there are. They hit the lower income people more than anyone else.

What ever happened to the Democrats advocating "progressive" tax structures?

Anonymous (November 7, 2007 @ 5:57am):

It is quite interesting all the comments from yesterday disappeared, either incompentence on the part of Badger Herald upgrade staff or perhaps a conspiracy to silence those who question the government's (Doyle's) real motive for taxing an addictive substance that will have the largest impact on the poor and uneducated.

Cigar Tailor (November 7, 2007 @ 9:53am):

Within the article where it states, "...money from the tax will go toward funding anti-smoking programs endorsed by Robson" really makes me laugh.

Why does that give me the impression that a friend or some family member of Robson will really be benefiting from this so-called anti-smoking funding. This stinks worse than any cheap cigar I have ever smoked.

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