State of Mass. Collecting Taxes for On Line Purchase of Cigs

A federal law called the Jenkins Act states that online cigarette distributors are supposed to voluntarily report their sales to the states where the purchase originates, but none do. So last July, the Legislature increased the excise tax to $1.51 a pack and gave state officials the authority to get tough.

"Since that time, we have put together a plan to track who is selling the cigarettes and to get information from them about people from Massachusetts that are not paying $1.51 per pack," Department of Revenue Commissioner Alan LeBovidge said.

The state sent letters to more than 300 online distributors demanding their records. Only two responded, but they offered the names of several hundred consumers, meaning big money for the state.

"We sent over 300 bills to people for $44,000 tax, and we've already collected $39,000," LeBovidge said.

Some cigarette Web sites tout tax-free cigarettes and promise, "We do not share our mailing lists or sales records with anyone." The state acknowledges it doesn't have the resources to go after the companies which refuse to cooperate, but those which do are reporting information quarterly, meaning consumers like Bob will be getting bills they probably hadn't planned for.