WI Internet Sales Records
Press Release:? August 5, 2005
Dear Attorney General Lautenschlager;
It has come to my attention that Governor Doyle has ordered the
Wisconsin Department of Revenue and the Department of Administration
to issue checks to persons who have paid sales/use/excise taxes on
cigarettes purchased over the InterNet. Presumably, the assessment of
these taxes was legal. I also note that only some of the taxes-for
June and July- are being refunded as opposed to those that have been
collected since January, 2005.
As my name is affixed to each check issued by the State of Wisconsin
in my official capacity as State Treasurer, I would request your
legal opinion under Wis. Stats. ss.165.015 as to the legality of
issuing these refunds. Further, I would request that you take steps
to stop the issuance of these checks until it is determined if this
action by Governor Doyle and his departments is legal.
If this turns out to be a legal way of refunding taxes then it would
seem appropriate that all of these taxes collected should be
refunded, not just 2 months worth.
I urge your quick response to this request as I understand the refund
checks are scheduled to be sent in the very near future.
Sincerely;
Jack C. Voight
State Treasurer
Office of the State Treasurer: 608-266-1714
Toll Free Number: 800-462-2814
Location: One South Pinckney Street, Suite 550, Madison, WI 53703
Mailing Address: P.O. Box 7871, Madison, WI? 53707-7871
E-Mail: treasury@ost.state.wi.us
Fax: 608-266-2647
Cigarette Tax Refunds
Jul 30, 2005
NBC 15
State officials are promising to return more than $82,000 they collected in back taxes from online cigarette sales.
The Department of Revenue sent out letters last week telling some consumers they owed back taxes on cigarettes they bought on-line after 1999. 200 people paid up.
However, soon after the letters were sent out, Governor Doyle called for the tax collection to stop.
Department of Revenue lawyers decided the state should give the money back. Officials say refund checks should arrive by the end of next week.
http://nbc15.madison.com/news/headlines/1754302.html
WI:? Cigarette tax just the start, some say.? But state denies it would seek to collect taxes from other products bought over the Internet
Gov. Doyle – Directs Department of Revenue to Suspend Actions Against Individual Purchasers of Tobacco Products
7/21/2005
Contact: Ethnie Groves, Office of the Governor, 608-261-2156
Says Sellers, Not Individuals, Should be Responsible for Collecting and Paying Taxes
Governor Jim Doyle today directed Secretary of Revenue Michael Morgan to suspend the Department’s action against individuals who have purchased tobacco online, unless there is evidence that the purchasers are buying large amounts of tobacco intended for distribution.
Instead, Governor Doyle is directing the Department to identify other means to properly regulate online tobacco sellers to ensure that they 1) prohibit sales to minors; and 2) comply with Wisconsin tax law.
“My preference would be to outlaw the sale of cigarettes on the Internet so they would be unavailable to minors,” Governor Doyle said. “We should go after people who sell cigarettes to kids.”
A proposal in the budget would have required all online tobacco sellers to obtain a permit from the Department of Revenue. Sellers would have to certify that they have a system in place to collect taxes and ensure age verification to avoid sales to minors. The Legislature significantly weakened that proposal by requiring that only cigarette sellers, not sellers of other tobacco products, register with the Department their name, address, and website. The proposal also does not give the Department the ability to enforce the collection of taxes by sellers.
“I hope that the Legislature will revisit their shortsighted decision so that the state can at least regulate the sale of cigarette to minors, or – better yet – ban Internet tobacco sales altogether.”
?
http://www.wispolitics.com/index.iml?Article=41167
?
Agency told to stop seeking back taxes on online cigarette sales
Jul. 21, 2005
RYAN J. FOLEY
Associated Press
MADISON, Wis. – Gov. Jim Doyle ordered the state Department of Revenue late Thursday to suspend an effort to collect back taxes and penalties from thousands of Wisconsin residents who bought cigarettes over the Internet.
Doyle’s action came hours after he said he was troubled by the plan, which started last month when 500 taxpayers received letters asking them to compute and pay their delinquent taxes for online cigarette purchases from September 1999 to the present.
“I’m troubled when the burden of this comes down on the backs of some individual person some place,” the governor told reporters. “I don’t think we should be doing this on the backs of older people.”
Doyle directed the department to stop sending the letters and try to step up regulation of Internet cigarette sales by other means. The department estimates the state lost more than $4 million due to unregulated Internet sales of cigarettes in 2004.
Meredith Helgerson, spokeswoman for the Department of Revenue, said state tax collectors recently obtained lists of customers from five separate online cigarette companies with the help of the federal government. In all, the lists contain 6,000 names of Wisconsin customers, she said, declining to name the vendors.
The department had planned to contact all the taxpayers by fall as part of the effort, which could net the state more than $3 million in unpaid taxes and penalties, Helgerson said. So far, the department sent two batches of 500 letters each, one in June and one in July.
It was not immediately clear what would happen to taxpayers who have already paid back taxes in response to the mailings or whether the effort could be continued in the future.
A federal law makes it illegal for people to transport cigarette products across state lines unless they are licensed dealers, but online cigarette companies had allowed customers to flout that law. The companies refused to pay taxes or provide tax collectors with their lists of customers until recently.
Buying smokes online allows customers to avoid the state’s cigarette tax, which is 77 cents per pack, in addition to local sales taxes ranging from 5 percent to 5.6 percent.
The Revenue Department asked customers to voluntarily report their purchases and was giving them worksheets to figure out their outstanding tax burden. For a smoker who bought one $15 carton online per month for three years, the outstanding taxes and penalties would amount to $420.
That includes the taxes and the 18 percent interest for every year they did not pay and a $20 late filing fee for each year the purchases were not reported.
The agency had said that those who did not respond to the letters would get a bill for the taxes owed, and customers who still refused to pay or report their purchases accurately would face a penalty of $25 per carton.
Helgerson said allowing people to self-report their purchases was a better approach than other states that are immediately sending taxpayers a bill. She acknowledged that many “curious, concerned, confused” taxpayers were inundating the department with inquiries after being asked to pay the back tax.
Even as the governor raised questions about the collection effort, Doyle said he believes Internet sales of cigarettes should be made illegal everywhere in the United States.
“I do not want to see the Internet become the backdoor means for people to escape the basic state laws on the purchase of tobacco products,” he said.
The Legislature included in its budget a plan to require online cigarette sellers to register with the Department of Revenue in an effort to crack down on the sales.
Doyle’s office has said he will sign the budget into law Monday after vetoing parts of it.
Brandon Scholz, president of the Wisconsin Grocers Association, said it is only fair that customers who order their cigarettes online pay the same taxes as those who buy tobacco in grocery stores.
“From the state’s economic perspective, it’s better for the state that they are collecting the tax on this product,” he said. “If there’s a tax we have to collect it.”
http://www.duluthsuperior.com/
Governor Doyle Reacts to Online Cigarette Tax
Doyle Reacts
Jul 21, 2005
NBC15
Governor Doyle is not happy with the idea of taxing people who bought cigarettes online.
On Wednesday, we told you about an effort to charge Wisconsin consumers back taxes for online cigarette purchases. Doyle wants to know why the Department of Revenue is sending letters to thousands of people asking them to pay state sales tax and penalties. He says the vendors selling the cigarettes ought to be paying that tax.
The governor says he plans to speak with the revenue Secretary about the collection efforts.
End of direct quote.? It’s worth noting that the primary website in question, esmokes.com, is either bankrupt or soon will be. Doyle may change his mind when he learns of this.?
July 22 – Cracking down on granny – Wisconsin is tracking down criminals. It’s sending tax bills to Internet cigarette buyers, complete with penalties, and threats. Mary Barsch, a smoker sure to die prematurely sometime beyond her present age of 77, says she lives on Social Security and can’t afford the unexpected bill.
“I can’t pay it,” Mary gasps (smokers always gasp of course), “I can’t afford to pay it, and I did not think I was cheating anyone. . . What is wrong with going on the Internet? I wasn’t getting them for that much cheaper. . . I told my husband – I said, ‘They’d have to handcuff me and take me to jail.’ “
Residents are responsible for paying the use tax on almost all products purchased from other states, says Wisconsin Department of Revenue spokeswoman Meredith Helgerson, while reassuring us that the department is being fair as always: it has no intention of widening its enforcement efforts to collect money from people who buy books, CDs, clothes or other items from online businesses. Only smokers will be forced to comply with this obscure law. Only those filthy smokers on their way to Hell.
A couple of Republican state representatives feel a twinge of compassion for Hell-bent smokers. Scott Jensen says, “I think there’s something to be said for giving people notice before prosecuting. We are on shaky grounds in punishing people who are unaware of their obligations.” David Ward comments, “I don’t really appreciate the heavy-handedness of the enforcement.”
Meredith Helgerson and lots of others appreciate it though. Brandon Scholz, president of the Wisconsin Grocers’ Association that wants filthy smokers to pay grotesque local prices, says the tax department is more than fair, adding, “If somebody bought something online and they knew they weren’t paying the excise tax, they were doing it at their own risk.”
Sure, what if she knew or what if she didn’t, why not handcuff old Mary Barsch and drag her off to the hoosegow, or at least torment her into her grave? The old girl’s overdue for her trip to Hell anyway. Stinking smoker. It’s about time we taught smoking bastards that everyone else may be exempt from taxes, with a wink and a nod published in the paper, but not them. Not those poor and ever-poorer bastards. It’s only fair after all. It’s only right.
Date: Wed, 29 Jun 2005 23:36:26 -0000
From: A Newsletter Reader
Subject: State excise tax update
Either through direct subpoena or indirectly through Michigan’s
efforts, the Wisconsin Dept. of Revenue has the names and order
history of anyone in the state who purchased cigarettes from
Esmokes.com or Dirtcheapcig.com.? According to an article in a
Detroit paper, a third Internet company has begun turning over
names.? Another 10 failed to respond to Michigan’s subpoena, so
Michigan subpoenaed shipping records from UPS pertaining to those 10
companies.
If you received the notification letter from the state DOR, and you
don’t believe they have a detailed history of your orders, you only
have to call the department and they will be happy to send you a copy
by mail, fax, or email.? It makes one wonder why they didn’t just
send out bills as Michigan did.
Also unlike Michigan, Wisconsin is charging interest of back taxes
owed at 18% per year.? If you purchased cigarettes from an online
vendor in 2002, for example, you are expected to pay the excise tax
($7.70 per carton) plus 54 percent interest, sales tax (5%), County
Use Tax (where applicable), Baseball Stadium Use Tax (where
applicable), Football Stadium Tax (where applicable), and interest on
all of the above sales and use taxes at 18% per year.? Finally,
there’s an additional $20 late filing fee for each year you didn’t
pay those taxes.?
It’s called piling on. Loan-shark type credit card companies have
nothing on our Dept. of Revenue.
(c) Copyright 2005 The Smoker’s Club, Inc. Please repost with link back to this original article.
