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The remote sale of cigarettes-via the Internet and mail-order-is a growing problem.
At the end of 2003, there were more than 350 companies selling cigarettes online and virtually none of them cheap cigarettes online were collecting state discount cigarettes online excise taxes.
Conservative estimates find that 2 percent of all cigarettes purchased in FY 2003 were purchased online, meaning discount cigarettes online that an estimated 413.9 million packs of cigarettes were sold over the Internet during the 2003 fiscal year.

Many of these Internet cigarette retailers flaunt their failure to adhere to the Jenkins Act, passed cheap cigarettes online in 1949 to require that all retailers assess and remit applicable state excise taxes for cigarettes. Over the discount cigarettes online past two years, nearly every state has increased or considered increasing its state excise tax on tobacco for two reasons: 1) to raise revenue; and 2) to deter smoking. However, both of these important policy goals are being compromised by the loopholes currently in place, which allow remote sales of cigarettes.
The remote sale of cigarettes via the Internet and mail order has cost state and local governments discount cigarettes online billions of dollars in lost excise and sales tax revenue at a time of widening budget gaps. Even in the absence of additional tax hikes, it is expected that budget gaps will discount cigarettes online widen, not shrink, as more consumers evade state excise taxes by ordering cigarettes from remote sellers.

These sites enable children to bypass time-honored age- verification checks at convenience stores by ordering cigarettes from remote sellers, since Internet sellers have little to no cheap cigarettes online age verification systems in place. This problem will continue to get worse because children are discount cigarettes online among the most frequent and proficient users of the Internet.
Because the loss of business due to remote sales of cigarettes has had a devastating impact on the country's 132,000-plus convenience stores, the National Association of Convenience Stores is aggressively working with Congress to eliminate loopholes that permit remote discount cigarettes online sellers of cigarettes to evade taxes and to allow children to easily purchase cigarettes.
As of rnid January, both the House and Senate were examining ways to make sure that loopholes are closed and inequities discount cigarettes online are addressed.

In early the months of 2004, the two bills will go to conference where they will be reconciled. The Senate bill, in particular, in its approved version, was not perfect, but NACS will work to strengthen the language in the compromise bill that emerges. NACS will push to cheap cigarettes online make sure that any solution: Both the Internet Tobacco Sales Enforcement Act (H.R. 2824), sponsored by Reps. Mark Green, R-Wis., and Marty Meehan, D-Mass., and the Prevent all Cigarette Trafficking (PACT) Act (S. 1177) sponsored by Sens. Orrin Hatch, R-Utah, and Herb Kohl, D-Wis., would give governments the tools needed to enforce their laws against habitual evasion by remote sellers. The discount cigarettes online proposed House bill gives tools to the state attorneys general, while the proposed Senate bill adds an additional tool in the arsenal of the federal government.

Lockyer said the growing Internet tobacco retailers "have helped hook our children on a deadly addictive product" while depriving the state of revenue "it can ill afford to lose" during a budget crisis, according to the San Jose (Calif.) Mercury News.California Attorney General Bill Lockyer filed lawsuits against five out-of-state online cigarette retailers Tuesday, alleging they are selling to California minors as well as avoiding responsibilities to pay California sales taxes.Government officials in Washington and Oregon filed similar lawsuits Tuesday, the report said, and other states are expected to follow.While California smokers pay up to $58 per 10-pack carton in grocery stores, online sales firms are marketing brands between $8.99 and $32.49 per carton.Online cigarette sales, estimated cheap cigarettes online this year at $2.2 billion, are expected to reach $5 billion by 2005 and cost states $1.4 billion in lost sales taxes, according to Massachusetts-based Forrester Research, which tracks online marketing.State tax discount cigarettes online authorities estimate California's losses are nearly $55 million this year as the state's budget falls $26 billion to $35 billion short over the next 15 months. California smokers pay 87 cents per pack in cigarette taxes or $8.70 a carton, but Gov. Gray Davis has proposed raising taxes on smokers another $1.10 per pack, which would make California's taxes the nation's highest.

Lockyer's suit, filed in San Diego Superior Court, targets Missouri-based Dirt Cheap Cigarettes Inc., Smokin 4 Less of Virginia, Cyco.net Inc. of New Mexico, eSmokes of Florida and LLP Enterprises/CigOutlet of Virginia. They discount cigarettes online are among an estimated 167 online retailers, according to California tax officials.Cyco.net, LLP Enterprises and Smokin 4 Less did not respond to messages seeking comment. At Dirt Cheap Cigarettes, which bills discount cigarettes online itself as "the last refuge of the cheap cigarettes online persecuted smoker," a customer-service representative said the company had no comment on the lawsuit.Dresslar said the attorney general's office ran a sting on the companies, in which children under 18 used their discount cigarettes online parents' credit cards to order cigarettes. "We determined they could," he said. "It was pretty easy to do."He said calls to the companies pointing out discount cigarettes online the alleged offenses failed to cheap cigarettes online create policy changes. The companies also failed, Dresslar said, to discount cigarettes online follow a federal law that requires out-of-state sellers to provide a record of the sale to the buyer's home state.Lockyer's suit asks the court to prohibit the defendants from engaging in the alleged unlawful conduct. The lawsuits cheap cigarettes online also seek a combined total of at least $1 million in civil penalties.