New York State - AG files lawsuits against web site operators illegally selling cigarettes..

February 4, 2011 - The state Attorney General’s Office has filed lawsuits (in the state Supreme Court in Manhattan) against six web site operators which the state says illegally sold cigarettes to New York State residents, part of a disturbing trend that provides teens easy access to tobacco, and encourages a loss of hundreds of millions of dollars in state revenues.

According to the Attorney General’s complaints, the named internet vendors accepted orders from New York State consumers and delivered the cigarettes to New York State addresses.

The six vendors are:
–Totally Tickled Limited, Inc. for discountcigarettesdomestic.com, Kentucky Smokes, and David White;
–Anton Limited for INeedSmoke.com, and Kyle Williams;
–Cigarettes-online.biz and John Sparkle;
–Best Products Solution Limited for http://cigoutlet.net/;
–Best Products Solution Limited for Smokin4free.com; and
–Best Products Solution Limited for cigoutlet.biz.

New York State Public Health Law Section § 1399-ll prohibits the shipment of cigarettes to any person in the state unless that person is licensed as a cigarette tax agent or wholesale dealer. Four of the complaints further charge that the internet vendors violated Executive Law section 63(12) by repeating these illegal sales on more than one occasion. The state is seeking fines of up to $5,000 for each violation and injunction against future sales.

How are tobacco products being delivered?? The main goal for passage of the PACT Act: to Protect Our Children - Make it illegal to use the U.S. Postal Service to deliver any form of tobacco product.. FedEx, UPS and DSL — have bowed to state pressure and have refused to ship tobacco products. (U.S. PACT Law takes effect June 29, 2010..)

The Centers for Disease Control and Prevention report that 24,100 children under the age of 18 become new daily (EACH DAY) smokers each year. An estimated 389,000 kids now under the age of 18 in New York will die prematurely from smoking.

In addition to the health effects, the fiscal impact of low-cost cigarettes is staggering, according to the AG’s office. The New York State Department of Health reported that in 2004, the state lost between $436 million and $576 million from the sale of low price, mainly untaxed cigarettes. Of that loss, between $106 million and $122 million derived from online tobacco sales. Aside from the lost revenue, avoiding the cigarette tax helps smokers avoid quitting: if all smokers paid the average retail price for cigarettes, there would be between 51,026 and 76,539 fewer adult smokers in New York.

Internet tobacco prices are much lower than those in regular brick-and-mortar retail outlets because they almost never include the taxes charged by retail stores. The low-cost cigarettes make internet tobacco products attractive to both adult and underage smokers, and help boost overall smoking levels. There is little to prevent underage online purchases as youth smokers can simply provide false identification to avoid their “age verification” procedures – which is not possible in face-to-face purchases.

Big Tobacco benefits the most from online cigarette sales because they can sell their high-demand, high-priced premium brands cheaply, as these sales are made tax-free. In fact, many sites advertise that they do not report their sales to any government entity. This practice is entirely illegal since federal law requires that internet vendors report all sales to the tax departments of the states into which they are selling. 2-3-11

The New York State Attorney General’s Office has long been active in trying to stop the sales of cigarettes over the internet. In 2005, it entered into agreements with the major credit card companies in which they agreed not to permit their credit cards to be used for the sale of tobacco products over the internet. In addition, the Office entered into agreements with three of the largest shippers to stop the delivery of cigarettes to individual consumers anywhere in the country. In recognition of these and other efforts, the Office’s Tobacco Compliance Bureau was given the “Champions of 2010″ award by Reality Check, a statewide youth program whose goal is to educate teens about the manipulative marketing practices used by the tobacco industry to get teens to smoke.

These cases are being handled by Assistant Attorney General Marc Konowitz under the supervision of Tobacco Compliance Bureau Chief Dana Biberman.

References: AG Sues Web Sites Selling Cigarettes, North County Gazette, 2/3/2011; Schneiderman Sues Tobacco Retailers For Illegally Selling Cigarettes Online Amid Teen Smoking Epidemic, NewsLI.com, 2/3/2011.

A few related news briefs:
Australia - govt health minister to introduce bill to prevent tobacco Internet sales..;
Israel - Health Ministry to target web smoking ads..;
Internet, Flavors everywhere - snuff being marketed to kids as hip, cool and healthy..;
Social networking sites marketing tobacco products to youngsters..;
Internet - kids being exposed to messages on tobacco use..;
Collect Tax on Phone and Online Tobacco Sales, More Money for State Health Care Programs...