NYC Cigarette Tax - Sales Tax - eSmokes Settlement

[WaHiGuy]

New York-New York City

On 8/25/06 I recieved an official letter from the NYC Dept of Finance and signed by Carlton T. Butler, Asst. Commissioner, Office of Taxation requiring that I pay $1005 in taxes due on the internet purchase of cigarettes from eSmokes for the period of July 2002 through June 2003. Many people in the city of New York are receiving similar letters (see story: [url]www.nyc.gov/html/om/html/2006a/pr069-06.html[/url]) The letter informs me that the NYC Dept of Finance, through a settlement reached with eSmokes (a Virginia based business which is now defunct and out of business) had recieved my order history and contact information. The letter states that I purchased 67 cartons of cigarettes and that I was assessed a $1,005 back tax payment ($1.50 per pack) and that I am required to make payment in full within 30 days. My question is what are my rights? I know that I did purchase a number of cartons of cigarettes from this company; how many and what time frame I cannot confirm nor dispute. Here are my specific points: 1) What jurisdiction does NYC have on a Virginia based company's sales practices? If there was criminal activity on the part of the vendor that resulted in purchases being sent through the mail, would this not constitute a violation of the US Mail System and therefore be a matter for Federal jurisdiction? 2) What consumer privacy rights may have been violated as a result of this settlement that resulted in the release of my order history and contact information to the City of New York for tax assessment. 3) The settlement that was reached clearly benefitted the City of New York ($33 million estimated); what safeguards, mediators, courts were involed that were arbitrarily interested rather than personally vested? 4) I can not afford this expense. At the time I couln't afford the City's increasing taxes on cigarettes and believed the vendors' claims of tax-free cigarettes. The City fully admits that the company, eSmokes, "misrepresented itself" in this claim -- shouldn't the vendor be responsible for any revenue the City feels it is owed, rather than the consumers who believed the misrepresentation? 5) Finally, the letter is not addressed to me in my full, legal name; but rather a shortened nickname version of my first name. No official court papers or judicially signed documents have been received -- must I comply? Should I expect a court order to be forthcoming from the City and, if it too does not name me by my legal name; would this be an additional argurment for not responding? -- I know -- I'm "grasping at straws" legally.... I really need your help as I can not afford to pay this back tax (now 4 years old!) on my meager salary! Further, the letter warns that I may be assessed a penalty of up to $200 per carton if I do not make payment within 30 days. ($14,400 in total!) If I MUST pay to satisfy what has become mayor Bloomberg's personal agenda run rapmant; then may I pay a little along; something like $20 until paid off? Further, could I choose to send the payments to an entity other than NYC Dept of Finance who may actually see the money (i.e. the NYC School System, NYC Parks Department) rather than some "fat cat's" pockets? Sorry for the rant, but any constructive advice is most appreciated. And yes, I know I should stop smoking and I will, but because I have made the choice, not because of some beurocrat's attempt to bankrupt me.

[You Are Guilty]

Originally Posted by WaHiGuy

New York-New York City

On 8/25/06 I recieved an official letter from the NYC Dept of Finance and signed by Carlton T. Butler, Asst. Commissioner, Office of Taxation requiring that I pay $1005 in taxes due on the internet purchase of cigarettes from eSmokes for the period of July 2002 through June 2003. Many people in the city of New York are receiving similar letters (see story: [url]www.nyc.gov/html/om/html/2006a/pr069-06.html[/url]) The letter informs me that the NYC Dept of Finance, through a settlement reached with eSmokes (a Virginia based business which is now defunct and out of business) had recieved my order history and contact information. The letter states that I purchased 67 cartons of cigarettes and that I was assessed a $1,005 back tax payment ($1.50 per pack) and that I am required to make payment in full within 30 days. My question is what are my rights?

You have the right to pay or not to pay.

I know that I did purchase a number of cartons of cigarettes from this company; how many and what time frame I cannot confirm nor dispute. Here are my specific points: 1) What jurisdiction does NYC have on a Virginia based company's sales practices?

Quite a bit if their business was directed and/or transacted within the borders of NYS, which it appears it was.

If there was criminal activity on the part of the vendor that resulted in purchases being sent through the mail, would this not constitute a violation of the US Mail System and therefore be a matter for Federal jurisdiction?

Not even remotely.

2) What consumer privacy rights may have been violated as a result of this settlement that resulted in the release of my order history and contact information to the City of New York for tax assessment.

Absolutely none. (You don't have any "consumer privacy rights")

3) The settlement that was reached clearly benefitted the City of New York ($33 million estimated); what safeguards, mediators, courts were involed that were arbitrarily interested rather than personally vested?

Huh?

4) I can not afford this expense. At the time I couln't afford the City's increasing taxes on cigarettes and believed the vendors' claims of tax-free cigarettes. The City fully admits that the company, eSmokes, "misrepresented itself" in this claim -- shouldn't the vendor be responsible for any revenue the City feels it is owed, rather than the consumers who believed the misrepresentation?

Nope, that's not how it works. "Ignorance of the law..." and all.

5) Finally, the letter is not addressed to me in my full, legal name; but rather a shortened nickname version of my first name. No official court papers or judicially signed documents have been received -- must I comply?

"Must"? No, you still have free will. Of course, you have been made aware of the penalties if you choose not to do so.

Should I expect a court order to be forthcoming from the City

C'mon, what do you think, they'll just forget about it?

and, if it too does not name me by my legal name; would this be an additional argurment for not responding?

Sure it's an argument -- quite possibly the worst one I've ever heard of with exactly 0% chance of success, but it is, technically, an "agrument".

-- I know -- I'm "grasping at straws" legally....

Yot got that right.

I really need your help as I can not afford to pay this back tax (now 4 years old!) on my meager salary!

Perhaps that should have been a consideration when you deliberately elected to purchase cigarettes without paying tax on them? It's a bit late now to complain about it.

Further, the letter warns that I may be assessed a penalty of up to $200 per carton if I do not make payment within 30 days. ($14,400 in total!)

Bingo.

If I MUST pay to satisfy what has become mayor Bloomberg's personal agenda run rapmant;

Bloomberg's personal agenda? Actually, it's a law, and one that quite a few other cities have also enacted.

then may I pay a little along; something like $20 until paid off?

Possibly. You'd have to contact the DoF to discuss if they'd be willing to work out a payment plan. I suspect they would be, if the payments were high enough (i.e. they're not going to take $1/month for the next 1000 months).

Further, could I choose to send the payments to an entity other than NYC Dept of Finance who may actually see the money (i.e. the NYC School System, NYC Parks Department) rather than some "fat cat's" pockets?

The money goes straight to the City, no "fat cats" are getting paid with your outstanding tax money. But to answer your question, no, you don't get to choose where your taxes go.

Sorry for the rant, but any constructive advice is most appreciated.

OK, stop smoking and use the money you save to take a lesson or two in proper Engligh writing.

And yes, I know I should stop smoking and I will, but because I have made the choice, not because of some beurocrat's attempt to bankrupt me.

You have knowingly committed tax fraud - don't expect a lot of compassion.

[abezon]

Any state/city that has sales tax will also have a 'use' tax designed to collect the state/local sales tax on purchases that people make out of state & don't pay taxes on. Most states don't try to enforce the requirement that people figure out & pay their use tax [very difficult for the state to prove what you bought from an out of state merchant seller], but they certainly have the legal right to collect. The most common situation to which use tax applies is mail order goods by individuals.

The city will probably work out a payment plan with you, but it ain't gonna be no $20 a month. Try $200.

[anteater]

Two things tend to make it worthwhile for states/cities to go after the taxes on out-of-state mail order/internet purchases of cigarettes:

1) The tax rates are high enough on cigarettes to make it worth the effort.

2) States have the federal Jenkins Act to flash at the out of state sellers. The Jenkins Act requires that cigarette sellers who ship out-of-state file monthly reports on who purchased how much with the appropriate authority in each state to which sales were made.

Most internet cigarette sellers are clueless until the letters from various state tax authorities begin showing up, demanding that they hand over their purchase records.