Feature Article

The Tobacco Control Legal Consortium has recently released a new legal synopsis discussing the legal status of Internet tobacco sales. The synopsis, written by Christopher Banthin of the Tobacco Control Resource Center, reviews problems associated with Internet tobacco retailers and discusses laws that can be used to address these issues.

Internet tobacco retailers often claim that they can offer lower prices by selling "tax-free cigarettes." In fact, however, the law is clear that whenever someone purchases cigarettes over the Internet, taxes are owed in the state where the customer is located. The Jenkins Act, a 1949 federal law, requires any retailer shipping tobacco products into a state to disclose to state authorities the address of the purchaser and the quantity purchased. In recent years, several states have sued Internet retailers under the Jenkins Act in order to obtain disclosure of purchaser information. This information can then be used to require customers to pay the taxes they had sought to avoid. Aggressive tax enforcement by states severely limits the appeal of Internet cigarette purchases.

Another concern with Internet retailers is that underage youth might be able to purchase cigarettes online. Most Internet retailers have weak - if any - age verification mechanisms. States have taken action to deal with this problem as well. In 2000, New York became the first state to prohibit tobacco retailers from shipping directly to most consumers. Ohio followed New York in 2005. Ohio Revised Code Section 2927.023 now makes it illegal to either ship or transport cigarettes to someone who is not an "authorized recipient of tobacco products." Individual consumers generally do not qualify as "authorized recipients."

Additional national developments have severely limited the ability of consumers to purchase cigarettes online. In the past year, the major credit card companies agreed to no longer process payments for Internet tobacco retailers, and both UPS and DHL agreed not to ship packages from these companies.

The complete TCLC report is online here.