Sale of Cigarette and other Tobacco Products Through Internet and its Taxation in the United States

Online sales of cigarettes are increasing at a rapid rate. Each packet of cigarettes, purchased through normative channels, carries a hefty tax load in the form of state sales and use tax, and excise tax. Online sellers do not collect state sales and excise taxes, and can therefore sell cigarettes at low prices. The problem of cigarette tax evasion has risen drastically due to the proliferation of Internet sales of cigarettes, which results in excessive loss of revenue, according to state authorities. This article explains the Jenkins Act requirements for online sales of cigarettes and informs on who are the enforcing authorities for these sales.

The following questions have been addressed in this article:

What are the vendor compliance requirements under the Jenkins Act?
How are the provisions of the Jenkins Act enforced?
What is the role played by ATF in the trading and taxation of cigarettes and other tobacco products?


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