Numerous city residents, including many from Queens, are being asked by the city to ante up thousands of dollars in cigarette taxes—or face the threat of garnishment of wages and liens on property.
Letters to 16,000 city residents went out in August to people who previously bought cigarettes over the Internet, where no payment of city or state taxes were required.
Although the sales were made in 2002 and 2003, there was no prior warning or notification to the online cigarette purchasers. Councilman David Weprin (D Hollis), chairman of the Finance Committee, said he is outraged by the city’s heavy handed action and plans to do something about it.
He was accompanied on Tuesday in his district office by a constituent, Joseph Maletzky of Bayside, who was charged $1,155 for purchasing 77 cartons of untaxed cigarettes in one year. “These are scare tactics,” Weprin said. “I am in favor of collecting taxes, but not on the backs of senior citizens and others who didn’t know they were doing anything wrong.”
Maletzky, 53, is disabled and unable to work. He counts on his disability check every month. “I’d be in big trouble if they (checks) are garnished,” he said. “The cigarette Web site never mentioned city or state taxes.”
Weprin will hold a news conference on the steps of City Hall Sunday at 11 a.m. where he will call for the Department of Finance to make several changes. He will first ask for a 30 day moratorium by the agency on collecting the back taxes. During that time, the councilman will meet with officials to come up with an equitable resolution.
He also believes each case should be handled individually. “Someone who buys 77 cartons a year is obviously not selling them in a store and should not be punished,” Weprin said. “The cigarette buyers were acting in good faith and if it’s for personal use, they shouldn’t have to pay.”
In other cases, he believes people should pay a reduced amount or work out a payment schedule. The city is demanding the tax money be paid within 30 days. “It’s absurd to have to pay up so quickly,” Weprin added.
He also wants to give the Department of Finance time to alert the public about current and future cigarette sales that are subject to taxes. Online cigarette sales are no longer legal in New York state. “People should be able to go down on an interview to discuss their cases and not to have to pay interest or penalties,” Weprin said.
If interest and penalties were applied to Maletzky, it could double his payment—something that he doesn’t want to contemplate. “My wife and I just can’t afford it,” he added.
The city is hoping to take in $6.95 million in unpaid cigarette taxes. Penalties for non payment will be assessed at up to $200 per carton. The city’s tax is $1.50 per pack of cigarettes.
Owen Stone, a Department of Finance spokesman, said his agency is standing behind its policy. “The letter people got is the warning. If they want to work out a payment plan, they can do so,” he added.
But Weprin said his office has gotten dozens of calls from residents who had no idea they were breaking the law and now are being penalized without any warning. Many, such as senior citizens, are on fixed incomes and bought cigarettes over the Internet to save money.
The city got the names of online purchases from the companies after filing a lawsuit against 30 such firms. While the case was pending, 15 of the companies settled with the city, paying fines and giving up lists of their New York City customers. Many of the companies then went out of business. Although the city eventually lost the case on a technicality, it is appealing.
For Maletzky, who now has respiratory problems in addition to other health concerns, he is still purchasing online to save money. He buys through Indian reservations, which are exempt from collecting taxes. “I know I have to quit smoking,” Maletzky added.
Jill Perrone, of Rego Park, also got a letter from the city saying she owed $1,230 for purchasing 82 cartons of cigarettes. “I was shocked at the letter and scared to death not to pay,” she said.
Perrone added that she purchased them for personal use. “It’s okay to pay taxes if you bought them in the city, but outside, you shouldn’t owe,” she said.
Up In Smoke: City Wants Cigarette Money
Originally written by: Liz Rhoades
Originally written by: Liz Rhoades
