State collecting tax on Internet cigarette sales

HARTFORD, Conn. -- Smokers who buy cigarettes on the Internet hoping to avoid taxes are in for a surprise.

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The state Department of Revenue Services said Monday that tax bills have been mailed to 141 Connecticut residents who owe $165,756, a 16 percent increase over taxes due last year.

The sum represents Connecticut's $1.51-a-pack cigarette tax and its use tax, which is equivalent to the 6 percent sales tax collected in retail store transactions.

The state, which has so far received $44,052, also has billed purchasers for penalties and interest for nonpayment of taxes.

One individual was billed $6,000 for purchases in 2002-03, said Sarah Kaufman, spokeswoman for the Department of Revenue Services.

"It can get really expensive," she said.

The state agency said it has other sales information from Internet retailers and will soon send more bills.

To avoid being billed by tax officials, buyers of cigarettes with no tax stamp should use a state form to calculate the tax due within 24 hours of purchasing cigarettes on the Internet.

Federal law requires companies to furnish information about residents who buy cigarettes, including their names and addresses and other details, Kaufman said.

Last month, major credit card companies agreed to no longer handle Internet sales of cigarettes in a nationwide agreement with state officials and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The move is aimed at illegal dealers that are trying to avoid sales taxes or sell to underage customers.

"It's a ready and easy source of tobacco for minors and a major way for cigarette distributors to circumvent and evade the law," state Attorney General Richard Blumenthal said Monday.