April 2008
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WHAT DO I NEED TO KNOW ABOUT ORDERING TOBACCO PRODUCTS, SUCH AS CIGARETTES, THROUGH THE INTERNET? CAN I RECEIVE THESE PRODUCTS "TAX FREE" OR "DUTY FREE"?
There is currently no Federal law that prohibits Internet tobacco product sales. However, there is also no exemption from Federal laws for tobacco products ordered over the Internet. Therefore, consumers who order tobacco products to be shipped to them from outside the United States are not exempt from payment of Federal excise tax and customs duties due on these products when imported.
In addition, consumers who use the Internet to buy cigarettes from vendors outside their State may be liable for their State’s cigarette excise and/or sales taxes, and a State may have prohibitions or restrictions on Internet or mail-order purchases of tobacco products, or may have special requirements for such purchases. For information about State requirements, contact the agency in your State with authority for tax administration. Under Federal law, cigarette vendors who sell and ship cigarettes into another State to anyone other than a licensed distributor must report to the State (1) the name and address of the person(s) to whom cigarettes shipments were made, (2) the brands of cigarettes shipped, and (3) the quantities of cigarettes shipped. (Jenkins Act 15 U.S.C. 375 – 378).
Consumers should also be aware that cigarettes manufactured in the U.S. and labeled and shipped for export cannot be brought back into the U.S. except by the original manufacturer or by an export warehouse proprietor authorized by the original manufacturer. No quantity of cigarettes originally manufactured in the U.S. for export may be brought back into the U.S. by you as a consumer, except for the limited quantity that you are allowed to bring back into the country as a returning traveler. (A returning traveler may bring back no more than two cartons which must be carried on the traveler's person.) This prohibition applies to even small Internet purchases that you make for your own personal use. Cigarettes manufactured in the U.S. for export are required to have a notice on the package. In general, this notice is: “U.S. Tax-exempt. For use outside the U.S.” Packages bearing the export mark may not be sold or held for sale for domestic consumption in the U.S. and are subject to seizure by U.S. officials.
WHAT FEDERAL LAWS DOES TTB ENFORCE CONCERNING TOBACCO PRODUCTS?
In general, TTB enforces Chapter 52 of the Internal Revenue Code (Title 26 of the United States Code). Chapter 52 of the Internal Revenue Code deals mainly with the Federal excise taxes on tobacco products and cigarette papers and tubes and other requirements, such as permits required for engaging in business related to the manufacture, importation, and other operations involving such products.
REGISTER NOW TO ATTEND TTB EXPO 2008
TTB Expo 2008 will target alcohol, tobacco, firearms and ammunition industry members as well as relevant trade associations, consultants, lawyers, and State government officials on June 17 - 18, 2008, in Covington, Kentucky. Click here for more information.