Several major credit card companies, attorneys general from across the country and the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives are teaming up to curb online cigarette sales.
The majority of online tobacco retailers are violating at least one state or federal law, according to the groups. Online tobacco retailers often ignore state age verification laws and laws prohibiting direct shipment of cigarettes to consumers. And they often fail to pay state or federal taxes and violate the federal Jenkins Act, which requires that cigarette sales that cross state lines—including online sales—be reported to the buyer’s home state.
Also, cigarette sales made by foreign companies over the Internet often violate federal smuggling, cigarette labeling, money laundering and contraband product laws.
In the past week, regulatory groups have enlisted the help of credit card companies to enforce these long-neglected laws.
According to an ATF statement released Thursday, all credit card companies have policies in place that prohibit using their cards for illegal transactions.
In teaming up with the credit card companies, ATF and the National Association of Attorneys General are hoping to adopt policies to prohibit the use of credit cards for online cigarette sales and take action against retailers that accept them.
“We are taking a multifaceted, multijurisdictional approach to halting illegal Internet cigarette sales,” NAAG President and Vermont Attorney General William Sorrell said in a statement. “We believe this is the most effective and efficient strategy to enforce state and federal laws regulating online sales.”
Other opponents of online cigarette sales expressed similar concerns with Internet sales.
Jeff Lenard, a spokesperson for the National Association of Convenience Stores, said online cigarette sales “may actually encourage smoking [because] you take away the convenience store, where there is face-to-face ID check. I think that anyone who thinks that kids can’t order cigarettes over the Internet is deluding themselves.”
Several online tobacco retailers could not be reached for comment.
Some states, like New York, Ohio and Pennsylvania, are taking a different approach by retroactively collecting back taxes from people who have purchased cigarettes online without paying state taxes.
Some officials are also concerned with public health risks associated with cheaper online tobacco sales. “It is well established that lower cigarette prices lead to increased smoking rates, which in turn lead to more smoking-related illnesses and deaths,” according to an ATF statement.
Some supporters of the joint effort also fear that online tobacco sales might support terrorism. “ATF investigations show that millions of dollars each year in illegal sales of cigarettes are diverted to fund terrorists and criminal organizations,” said Michael Bouchard, ATF assistant director for field operations.
Norman Kjono, a board member of Forces International, a non-profit smokers’ rights group, said further enforcement of existing laws will increase illegal cigarette sales and related terrorist activity. He also disagrees with taxes that specifically target smokers.
“Creating an economic incentive for smuggling operations is a predictable outcome of further increasing discriminatory cigarette taxes,” Kjono wrote in an e-mail.
Kjono, who comes from a military family, added, “I do not appreciate the fact that my son, his cousin and their comrades in arms could become targets for terrorist bullets, as a consequence of [legislators’] apparent need to ‘target’ smokers.”
Get The Chronicle straight to your inbox
Signup for our weekly newsletter. Cancel at any time.