Deal halts cigarette sales on Internet

[Tommy]

This could happen to us

Deal halts cigarette sales on Internet

Major credit card firms agree not to be part of transactions that avoid state taxes.

By Michael Gormley / Associated Press


ALBANY, N.Y. -- Major credit card companies will refuse to participate in Internet sales of cigarettes nationwide under a government agreement made Thursday.

The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the companies and state attorneys general agreed to work together to prevent the long unchecked use of credit cards to buy cigarettes over the Internet across state lines. The agreement is effective immediately.

The result is that virtually all credit cards will no longer participate with Web sites based in the United States and abroad that sell cigarettes and tobacco products in every state, said New York Attorney General Eliot Spitzer. The card companies also agreed to take action against Internet sellers that authorities identify as violating state and federal laws regulating cigarette sales.

The effort is important because enforcement has been difficult, even though in many states, including New York, the Internet sale of tobacco products is illegal. The trade undercuts traditional business operators, often avoids sales tax for states and localities, and can be a way for underage consumers to buy cigarettes and chewing tobacco before they turn 18.

Last month, Michigan officials sent tax notices to 500 smokers who tried to avoid the $2-per-pack cigarette tax by buying their smokes on the Internet. Michigan hiked its state tax on cigarettes by 75 cents-a-pack in July 2004, raising taxes on a carton to $20, and has lost millions in tax revenue from online sales.

"By working with all the major card companies, we will severely restrict the availability of the Internet retailers to make these illegal sales," said Spitzer, one of the lead attorneys general in the partnership.

The negotiations were also led by California Attorney General Bill Lockyer and Oregon Attorney General Hardy Myers. Attorneys general from Colorado, Idaho, Louisiana, Maryland, Pennsylvania, Vermont and Wisconsin also participated.

Smokers can still buy cigarettes over the Internet, but they would have to use checks, money orders or some other payment system.


http://www.detnews.com/2005/business...C03-120892.htm

[Head Boy]

It'll be interesting to see if the alternative payment service try to take advantage of this, or if they want to avoid government intervention with them.

[Verbal]

The net is getting full of more beaurocratic bullshit every day. Soon you'll need a state issued license to go online.

[Head Boy]

There was talk of forcing people in the UK to have a TV licence bcause you could watch some TV progs over the net.

[PR_Tom]

I've received smokes in the mail as Christmas gifts from other states. Evidently NY wants me to file a tax form or something. Ridiculous.
I know thats the the main thrust of the article, but it's still a valid point..

I'd also like to order a case of Wine online.. Am I allowed to or what?

[Greenguy]

I read an article on this in the paper today - aside from the Indians being very upset (they make a ton of money selling smokes online) you can still use alternate payment methods, like checking accounts & sending checks & whatnot - just no CC's

[SirMoby]

To date most inovations in electronic commerce were implimented in order to sell porn. Maybe this is a push to another industry that may introduce new technology that we can piggy back on.

It would be great for another industry to take the lead for a change.

[Head Boy]

There was talk of doing this to casinos as well. It sounds like a great vote catcher - ban sex, gambling and smokes.

[T Pat]

I bet/hope online pharmacies will be next

[Tommy]

My point is if the goverment can make a deal with the cc companys to knock off cigerettes

they could make a deal to knock us off

I think its gonna be intersting to see where this goes

maybe all the online cigerettes will come from out of the country

maybe they will just use some sort of 3rd party thing
or maybe it will help people get use to paying with online checks

[Jim]

Tommy
The sale of cigarettes online has been illegal in some states for a while, NY included. There is nothing illegal about porn, so far. Before they stop allowing cc sales for porn, it seems they would have to make it illegal.

[SirMoby]

Originally Posted by Tommy

My point is if the goverment can make a deal with the cc companys to knock off cigerettes

they could make a deal to knock us off

I think its gonna be intersting to see where this goes

maybe all the online cigerettes will come from out of the country

maybe they will just use some sort of 3rd party thing
or maybe it will help people get use to paying with online checks

I think it would be great if another industry leads the way to cc free Internet commerce. It could open many doors and free up the market not just for our industry but for many others as well.

[Pagan]

Didn't we face something like this a few years ago? I remember Colorado had a law banning online gambling - or attempting to - when I lived there. One reason I stopped promoting it. Isn't it American Express that still refuses to pay for porn?

As to the tobacco/alcohol thing, each state has a method of taxing and regulating it. Ordering it online defeats that purpose and that makes them very mad. With alcohol, there are many states you cannot order from or have delivered to. The various legit websites have all the information to see if you *can* order from them. Texas is so strange - we have wet and dry counties and cities. I live in a semi-dry county. The small towns have package stores and the grocery/convenience stores can carry some alcohol. No bars in this county, though.. we have to go to the neighboring county or visit a private club like the Elks or VFW. We have one county near Lubbock that has a very strict sheriff.. if he catches you with alcohol in his very dry county, you do time. No 3.2 beer for you in that area!

I can certainly understand the sale of substances that are toxic or lethal - meaning drugs, cigarettes, and alcohol. But... how many young people have died from porn? Seriously now... many people pick up a lethal tobacco or alcohol habit long before the legal age, but... what real physical or mental harm does viewing pornography do? If a parent choses to ignore what their kids are doing on the internet that is not my responsibility. All of my sites are appropriately labeled so that responsible parents can block access to them using filters.

When I first started in this business, I had a very nasty letter from an angry parent about how evil I was for having these images on a website where their child could access them. The site was properly labeled with a warning, along with the correct metatags. The email I sent back to that parent was along the lines of how irresponsible they were for not supervising a minor, for teaching their child to lie (saying they were of age when they were not), and that if I heard one more peep, I would report them to the local law enforcement for contributing to the deliquency of a minor. Gotta love it when fools use their real ISP emails! I never did hear a word back.

Sadly, we have a very conservative climate in this country right now, and something like this could well happen. Makes me glad my domain is hosted in Canada!

[domweb]

Originally Posted by PR_Tom

I'd also like to order a case of Wine online.. Am I allowed to or what?

Actually, several US state ban the sales of any alcohol product on the net.

Same reason as cigarettes...messed up the local distribution/tax/graft system that had been in place before the net.

Originally Posted by Pagan

Sadly, we have a very conservative climate in this country right now, and something like this could well happen. Makes me glad my domain is hosted in Canada!

Your domain hosting in Canada won't protect you from an obscenity prosecution. You have you check mailed to a US address, correct? The feds can harrass you if they want.

You live in Texas? You are on the short list of states that while go out of their way to screw you if they find out what kind of business you are doing in their 'sacred state'. The sodomy laws being overturned doesn't mean jack when they are coming after you for community obscenity standards.

Best of luck...chances are they won't mess with you. But hosting in Canada is a think legal defense to say the least.

[Special "Ed"]

A buddie of mine just recieved a letter from Homeland Security Department. They seized his cigarettes at the border. They told him that if he still wanted his cigarettes that he could have them but they were pretty sure that what he was doing was illegal and that if he still wanted them they would get in touch with the proper local authorities about his case and probably arrest him. Nevertheless he forgot about the cigarettes...he says he's going to quit rather than pay the $50 bucks a carton it currently costs him to smoke.

[MeatPounder]

Originally Posted by T Pat

I bet/hope online pharmacies will be next

Not me

[ArtWilliams]

The word on the street here in Canada is that a ban on Canadian Internet pharmacies will happen shortly too. ...art

[Pagan]

Originally Posted by domweb

Your domain hosting in Canada won't protect you from an obscenity prosecution. You have you check mailed to a US address, correct? The feds can harrass you if they want.

You live in Texas? You are on the short list of states that while go out of their way to screw you if they find out what kind of business you are doing in their 'sacred state'. The sodomy laws being overturned doesn't mean jack when they are coming after you for community obscenity standards.

Best of luck...chances are they won't mess with you. But hosting in Canada is a think legal defense to say the least.

Yeah, and if Texas decides to crack down on webmasters, I will either move back to Colorado (not as bad, but still crazy), or have my checks sent to California. Some sponsors will now deposit directly into PayPal, which is very nice.

I get rather tired of the "holier than thou" attitude at times. I bet if we looked at the membership lists on the porn sites, we would find over half the legislative bodies involved listed. The US also has to get over the idea that it can control the Internet... it can't. There are over 200 other countries out there with access to the same network.

I do nothing illegal in my state. I have never sent spam, never forced my domain onto anyone.. never advertised it anywhere. I use Search Engines and Link Lists exclusively for traffic, and my sites are properly tagged with warnings and meta tags. Parents who refuse to or are incapable of managing their little darlings need to be the ones on the carpet, not the responsible webmasters who take all the steps possible to limit access.

The alcohol and tobacco not only falls into the wrong hands but deprives the local governments of tax dollars. The reason the alcohol falls into the wrong hands is a great part of our battle.. Junior can count on Mommy and Daddy being too stupid, lazy, or both to supervise them on the net. Not only do they not care where their darling offspring surfs, they also had over their credit cards. Pretty stupid, eh?

Who is going to pay for this? We all will. The CC companies will have higher costs per dollar received. That will mean higher interest rates and annual fees for everyone. I seriously doubt anyone realizes the financial impact this decision will have.

When will we realize that our government is supposed to be "of the people and for the people" and NOT there to micromanage our daily lives?