MINEOLA, N.Y. -- New York attorney general Eric T. Schneiderman earlier this month filed lawsuits against six website operators that illegally sold cigarettes to state residents. According to the AG's complaints, the named Internet vendors accepted and delivered cigarette orders to New York state addresses.
The six vendors are: Totally Tickled Ltd. Inc. for discountcigarettesdomestic.com, Kentucky Smokes and David White. Anton Ltd. for INeedSmoke.com, and Kyle [image-nocss] Williams. Cigarettes-online.bizand John Sparkle. Best Products Solution Ltd. for cigoutlet.net. Best Products Solution Ltd. for Smokin4free.com. Best Products Solution Ltd. for cigoutlet.biz.
The sales, he said, provide teens with easy access to tobacco and encourage a loss of hundreds of millions of dollars in state revenues. (New York's state excise taxes, at $4.35, are the highest in the country.)
New York State Public Health Law Section 1399-ll prohibits the shipment of cigarettes to any person in the state unless that person is licensed as a cigarette tax agent or wholesale dealer. Four of the complaints further charge that the Internet vendors violated Executive Law section 63(12) by repeating illegal sales. The state is seeking fines of up to $5,000 for each violation and injunction against future sales.
Internet tobacco prices are much lower than those in regular brick-and-mortar retail outlets because they rarely include the taxes charged by retail stores. The New York State Department of Health reported that in 2004, the state lost between $436 million and $576 million from the sale of low-price, mainly untaxed cigarettes. Of that loss, between $106 million and $122 million was derived from online tobacco sales.
There also is little to prevent underage online purchases as youth smokers can simply provide false identification to avoid their "age verification" procedures, which is not possible in face-to-face purchases.
The AG's Office has long been active in trying to stop the sales of cigarettes over the Internet. In 2005, it entered into agreements with the major credit-card companies in which they agreed not to permit their credit cards to be used for the sale of tobacco products over the web. In addition, the office entered into agreements with three of the largest shippers to stop the delivery of cigarettes to individual consumers anywhere in the country.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.