Cigars, Cigar Information and where to find Premium Cigars, Discounted Cigars and even Cheap Cigars - THE TAXMAN IS COMING! THE TAXMAN IS COMING!

THE TAXMAN IS COMING! THE TAXMAN IS COMING!

THE TAXMAN IS COMING! THE TAXMAN IS COMING!

Plus: Judge reduces penalty against American traveler to Cuba by 89%!

Los Angeles, January 27 – It’s no secret that state governments are short on cash and will do almost anything to find new sources of revenue. Now, it appears that some states may be looking to smokers once again for funds.

Cascade Cigar & Tobacco co-owner and activist Jan Esler-Rowe reports from Portland (Oregon) that quiet discussions took place in Portland on January 18 among Attorneys General of several states after Oregon’s Department of Revenue mailed invoices to Oregon citizens for state cigarette taxes, as we reported on January 4.

The concept, as she reports it, is that states may try to force credit card companies to provide records of tobacco purchases into their territories for the purpose of using such information to collect state tobacco taxes!

Yes . . . think of it . . . a mail-order or on-line purchase of a brand which may not even be sold in your state will result in an invoice from your state taxing authority, demanding that you pay in-state tobacco taxes on it!

The state of Maine has bullied United Parcel Service in the same way, refusing to allow deliveries to residential addresses under the guise of trying to stop the sale of cigarettes to children.

What’s the outlook?

• We know states are after revenues of all kinds, but this program is clearly aimed at cigarettes and Federal legislation from as far back as 1949 (known as the Jenkins Act) allows states to collect tobacco taxes on cigarettes. The taxable product defined in the Jenkins Act as “cigarettes” is clearly distinguished from cigars.

Because of this, all of the top mail-order and on-line cigar companies do not sell cigarettes.

• Nevertheless, this lust for money requires careful monitoring and the concept of claiming local taxes on cigars shipped in interstate commerce is a problematic one. State Attorneys General would certainly expect to be challenged in a lawsuit which would pit Federal control of interstate sales against states shrieking that an on-line sale to a California buyer from a Pennsylvania merchant, processed and completed on servers possibly located in a third state (or foreign country) was actually made in California.

• But we can also help ourselves. Elser-Rowe notes that smokers can sign petitions available on-line (click here) and let state governors know that smokers are part of society as well (after all, it seems like we’re paying for most of it) and not consigned to the 21st century equivalent of a leper colony.

The petition program speaks primarily to cigarettes, but cigar smokers have much to gain by making their feelings known. California-style laws have gone down to defeat in some states and municipalities because legislators were not inclined to tell people how to live their lives.

That’s a concept called freedom. It’s not one that much concerns state treasurers, so the louder we yell, the more they might remember it from their eighth-grade civics classes.

Freedom Rings in South Dakota:
The anti-tobacco crowd is steaming in South Dakota, as the state’s House of Representatives defeated a bill that would have added to the list of places in which smoking would not be allowed by a 39-31 count on Tuesday.

Representative Ted Klaudt (R-Walker) moved to table the bill, which effectively killed it. After the vote, he told the Rapid City Journal that “Government should never stick their nose into private business.

“It’s just wrong. It’s bad government. Bad government is not justified by a health issue.”

Rep. Jeff Haverly (R-Rapid City) told the Journal that people should have a choice. “The business owner does not have a lot of options. If South Dakota passes a law, he has to follow that law. Supporters of HB1075 [who want the ban extended] do have options. Don’t cater to that business owner. They don’t have to go into that restaurant.”

Backers of HB1075 will try to resurrect the bill again, later this week.

From the Cubador:
The Bush Administration’s war on Americans who travel to Cuba took a small hit last week as an Administrative Law Judge reduced the government’s proposed fine on a traveler by about 89 percent.

The South Florida Sun-Sentinel reported that Craig Ostrem of Edina, Minnesota went on a scuba-diving trip to Cuba in 1999 and brought back two bottles of rum, some candy and artwork worth about $30 in total.

The U.S. Treasury Office of Foreign Asset Control proposed a penalty of $6,770, but the judge reduced it to $780. Ostrem had been cooperative and it was a first-time offense. The maximum penalty under law is $65,000.

Whether Ostrem will pay the penalty or not is unknown. On December 7, 2004, we reported on another case which has received considerable publicity, of a Catholic couple who traveled to Cuba in 2001 for a vacation and to deliver medicines to nuns in that country, is still pending. The OFAC has proposed a penalty of $9,750, but no decision has been announced as yet.
~ Rich Perelman

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