STATE OUTSMARTS ITSELF ON
CIGARETTE TAX I recently voted in support of a
bill to curb the sales of cigarettes through the internet.
During his budget address on February 24, 2004, Governor
McGreevey proposed
another new tax – a higher cigarette tax. New Jersey
currently has the highest cigarette tax in the nation. Some
experts attribute higher cigarette taxes to the decrease in
the number of smokers. We want to encourage citizens not to
start smoking, and smokers to stop. The Governor wants to
increase that existing tax by an additional $0.45. I feel
that the State has outsmarted itself. By increasing the
price twice, we are creating a situation that promotes
smokers or bootleggers, to go to Pennsylvania or Delaware to
purchase less expensive cigarettes. Thus we may see very
little of the estimated $135 million that this tax is
supposed to bring in. On May 24, 2004 the General Assembly
voted on bill A-1838. Briefly, this bill facilitates the
collection of taxes on retail sales of cigarettes shipped
from outside this State. It requires that all cigarettes be
purchases be made “face to face” unless the seller has
complied with the Jenkins Act. The federal Jenkins Act
required that anyone selling cigarettes to a buyer in
another state report the sale to the state tobacco tax
administrator for the buyer’s state. The Division of
Taxation, in the Department of Treasury in this State, then
has the information to collect cigarette or sales use taxes.
It is estimated that by the year 2005 states will lose $1.4
billion in revenue if this act is not enforced. In
addition to the revenue that will be lost by the State of
New Jersey, due to the non-compliance with the Jenkins Act,
I have heard from many of the stores in my district
concerning the revenue that they are losing through the
purchasing of cigarette and tobacco products over the
internet. As a result of this information provided to me,
I voted in favor of A-1838. For more information regarding
the state budget, please contact my office at
www.asmcorodemus@njleg.org.
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