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Alaska wants Net cigarette buyers to kick habit

Desiree DeNunzio Editor
Desiree DeNunzio is the gift guide editor for CNET's Commerce team. When she's not writing and editing, she's either hiking through the redwoods or curled up with a good book and a lazy dog.
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Desiree DeNunzio

Alaska residents who thought they were saving money by buying their cigarettes online were in for a shock this week.

The state sent out letters to more than 600 people who bought tax-free cigarettes over the Internet, telling them they're required to pay up or face penalties, according to the Anchorage Daily News.

"Under state law, the Alaska cigarette tax must be paid on all cigarettes brought or shipped into the state," the letter says. "This law applies to cigarettes purchased by mail order, phone order or over the Internet."

The purchases in question, which occurred between 2001 and 2004, cost the state $420,000 in taxes, the Anchorage Daily News said. The state tax at the time was set at $1 per pack of cigarettes. Alaska now levies a tax of $1.60 a pack.

Other states, including Michigan, California, Washington and Wisconsin, have made similar efforts to crack down on smokers who turn to the Web for tax-free packs. A 1949 federal law called the Jenkins Act requires out-of-state cigarette sellers to report the sale to the buyer's home state, so that state officials can collect.