Net tax bill could make smokers pay

Declan McCullagh Former Senior Writer

Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.

See full bio

Declan McCullagh

Jan. 29, 2004 10:31 a.m. PT

Smokers may pay more to buy cigarettes online, if a bill approved by congressional committee voice vote on Wednesday becomes law. Overruling complaints from Native American tribes that have become online tobacco retailers, the House Judiciary committee voted to require Internet shippers to collect the taxes required by the destination state.

State governments in high-tax jurisdictions like New Jersey ($2.05 in taxes per pack) have long complained about tax revenue lost from cigarettes sold over the Internet from low-tax states like Kentucky ($0.03 in taxes per pack). Currently the federal Jenkins Act requires anyone who ships cigarettes nationally to file monthly reports with each state's tax collector, but compliance has been spotty.