News Releases

News Release

May 5, 2008 - Smokers Billed for Cigarette and Sales Taxes on Internet Purchases
COLUMBUS, Ohio – Ohio smokers who’ve gone online in search of cheap cigarettes may find out that it cost them more than they anticipated. This week, the Ohio Department of Taxation has begun mailing letters that bill Internet purchasers for unpaid cigarette excise and sales taxes.

The department is mailing out a total of 5,469 bills over the next few weeks for a total of $2,153,775 in uncollected cigarette and sales taxes. These bills represent the Ohio taxes due – but unpaid – on cigarette purchases made online between July 2007 and March 2008.

“Our goal here is to enforce the law, out of fairness to consumers who do play by the rules and to Ohio business owners who are operating responsibly,” Tax Commissioner Richard A. Levin said.

An individual in northern Ohio is receiving the largest single bill, totaling $2,700. Most of the bills are $600 or less.

The federal Jenkins Act requires vendors who sell cigarettes across state lines to report those sales to the states in which the sales are made. The department asked for and received the names, addresses, and quantities of cigarettes sold to Ohio customers by five Internet vendors.

Ohio law requires that all sales of cigarettes in the state be made “face-to-face,” which means they cannot legally be purchased via the Internet. The last time the state billed for unpaid cigarette taxes, in 2006, it collected $568,807 from 1,610 individuals for online purchases made since 2002.

Cigarettes sold in Ohio are subject to both excise and sales taxes. The current state excise tax on a pack of cigarettes is $1.25. There is an additional tax of 34.5 cents per pack in Cuyahoga County. The state sales tax rate is 5.5 percent, plus additional county and transit authority “piggyback” sales taxes that add between 0.5 and 2.25 percentage points, depending on the location. These taxes are due on all purchases on which they have not already been paid.

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MEDIA CONTACT: Mike McKinney at (614) 466-5461.