Tuesday, March 01, 2005

how would you evade the cigarette tax?

From WIFR-Rockford(AP):
Mike Klemens of the Illinois Department of Revenue says Internet retailers are required by law to give states a list of their customers.

Illinois then periodically bills Illinois taxpayers who bought online and didn't pay the state cigarette tax which is currently 98 cents a pack.

Since the Revenue Department began such efforts in 1999, it's billed more than 4,600 taxpayers about $232,000.

Klemens says billing people is a lot of work, so the department doesn't do it often, but he says he expects the Revenue Department will step up its efforts if Gov. Rod Blagojevich's proposal to increase the cigarette tax by 75 cents a pack is passed.
So what percentage of cigarettes sold to Illinoisans get overlooked? What percent of the taxes billed does the state collect?

Readers, what's the best way you can design to evade the Blagojevich tax on buying cigarettes online?


Anonymous Anonymous said...

Order ciggi on-line from outside Illinois.

10:20 AM  
Blogger Roy said...

I would like to see a study relating cigarette taxes and revenue. If the the hike only makes more people order on-line, than what's the point?

12:14 PM  
Blogger Carl Nyberg said...

The State is sorta trying to claim it gets tax money from people that order online, but it seems likely that most are successful in evading the tax.

12:18 PM  
Blogger Roy said...

I heard plenty of people who ordered cigarettes online and this is the first I have ever heard that they get caught paying taxes. The extra taxes would seem to have several harmful effects, namely

1: Cig companies often "give" away cigarettes, because if you got em, you smoke em. The "free" cigarettes can significantly increase your daily intake after the free ones are gone. By encouraging on-line shopping, which is usually done in cartons, they are most likely increasing the intake among on-line shoppers.

2: increasing on-line shopping will make it near immpossible to see if increased taxes actually reduce the amount of cig sales.

3: I want to see the bottom line: was revenue per/post tax hike more or less? There was a raise a couple years ago so the data should be available.

2:03 PM  

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