In response to residents of Ohio attempting to avoid taxes on cigarettes by ordering them on the Internet, the government is sending out letters asking for more than $5,000 in tax money. Gov. Bob Taft has also recently proposed a 45-cent tax increase on each package of cigarettes.
The state has sent 25 letters out to Ohioans asking for about $5
000 in tax dollars. Another 1 000 letters will be going out soon said Gary Gudmundson, an Ohio Department of Taxation employee.
The Jenkins Act of 1949 requires that cigarette venders provide each state with customers' names and purchase amounts, Gudmundson said. The government then sends out letters to customers who have not paid their state taxes.
If there is no response from the letters, the department will then send out a bill and try to collect the taxes that are due.
The Internet is not a tax-free zone. Whether it's cigarettes or other items purchased over the Internet
if the retailer that you're buying from does not collect tax
it doesn't mean you don't owe it
he said.
Gudmundson said collecting taxes is essential because it generates revenue and is a matter of fairness to other taxpayers.
These people are trying to escape the tax and are dumping the burden back on the other tax payers who are following the law
he said.
The cigarette tax, currently at 55 cents per pack, would rise to $1 per pack if the proposal is accepted.
Ohio Rep. Jimmy Stewart, R-Athens, said he has mixed feelings about the cigarette tax, but has to keep in mind that the proposal is part of the larger budget, which includes things he agrees and disagrees with.
On one hand
discouraging people to smoke cigarettes is certainly positive; the illnesses that are caused by long-term use of cigarettes ultimately costs the state millions of dollars in Medicaid expenses
which are paid for by taxpayers
Stewart said.
But he added that cigarette smokers tend to be people with lower incomes, so the tax would affect the poor disproportionately. He also does not agree with the Medicaid cuts the budget proposes.
Taft submitted the proposal in an effort to improve the economy, said spokesman Mark Rickel. This is the governor's plan to unleash our economic potential and reinvent the base of which the state's revenues will be generated
he said.
The tax system is antiquated and leaves little incentive for businesses to remain in Ohio, he said. It adds costs and makes Ohio unattractive to talented workers that would stay or work here because their income is taxed at a high rate.
Ohio House Minority Leader Chris Redfern, D-Port Clinton, said he opposes the tax.
You have got to remember
