Unplugging Online Tobacco Sales
An effort to restrict online tobacco sales got a boost on Capitol Hill last week even as senators scrambled to vote on a number of hot-button topics before leaving for their summer break.
Senate Judiciary Committee Chairman Orrin Hatch (R-Utah) was able to get his colleagues on the committee to approve the Prevent All Cigarette Trafficking -- or PACT -- Act.
The bill, which Hatch and Sen. Herb Kohl (D-Wis.) introduced in June, would try to cut down on the spread of illegal cigarette sales on the Internet by requiring tobacco merchants to keep records of and report their interstate tobacco sales. People who are caught evading cigarette taxes would face prison terms of up to two years, along with up to $100,000 in fines. It also says that merchants who sell more than 10,000 cigarettes every month would have to register with the Justice and Treasury departments, or risk being charged with selling contraband. Those rules currently apply only if the merchant sells more than 60,000 cigarettes monthly.
Hatch and Kohl cited terrorism and organized crime as the primary reasons for introducing the bill. Indeed, there has been ample news coverage of this issue, as well as reports from the government on the illegal sale of cigarettes supporting terrorist activities and groups. But the more pressing concern for the bill's supporters can be seen in its "long" title in the Congressional Record: "To ensure the collection of all cigarette taxes, and for other purposes."
That's largely state and local tobacco taxes, of course. With states facing the worst budget climate in decades, there is a fresh move afoot to regulate the sales of many types of goods on the Internet to make sure that much-needed taxes are collected. New York, which now has an outright ban on cigarette sales on the Internet, estimated that it was losing $400 million annually from online tobacco sales.
Tobacco companies tend to support bills like these. Not only are such proposals aimed at shutting down the cigarette black market, supporting them gives the tobacco firms the opportunity to be a friend to the states, public enemies of terrorism and kid-friendly because they are discouraging teenagers from smoking. On a financial level, a law against illegal tobacco sales is a de facto law in favor of heftier tobacco company revenues. The only thing the companies don't like about the bills is the implication that the Internet is a relatively easy way for kids to buy cigarettes without getting carded at the local convenience store or gas station.
Support from the tobacco companies, along with the cash-hungry states and the Campaign for Tobacco-Free Kids, should go a long way toward boosting the prospects of the Hatch bill. Also, watch the progress of similar legislation introduced earlier this month in the House of Representatives by Rep. Mark Green (R-Wis.). House Judiciary Committee Chairman James Sensenbrenner (R-Wis.) plans to mark up the House bill after the August recess, according to Green and his Democratic cosponsor, Marty Meehan of Massachusetts.