Az man gets $4,427 cigarette tax bill for online purchases – cbs 5 – kpho
PHOENIX (CBS 5)
If you' ve ever bought cheap cigarettes online, or from an out of state vendor, you probably thought you were getting a smoking deal.
As of Aug. 2, 2012, it is illegal to order or buy cigarettes online, over the phone or by mail.
But, if you made your purchase before that and still haven' t gotten a tax bill, that doesn' t mean you' re off the hook with the Arizona Department of Revenue, because there' s no statute of limitations for collecting on use and luxury taxes that haven' t been filed.
“Many Arizonans fell prey to promises by online tobacco companies that they could purchase cigarettes “tax free,” said Sean Laux, spokesman for the Department of Revenue. “However, contrary to popular belief, online purchases are not now, nor ever have been, ' tax free.' ”
Many of those smokers are getting a reality check, in the mail.
George Elliott, of Camp Verde, is one of at least 1,350 Arizonans who' ve been told it' s time to pay up for untaxed cigarettes.
“It wasn' t a way to get out of paying the taxes,” Elliott said about why he and his wife bought cigarettes online. “It was just, Hey this is cheaper. Must be fine. It' s online. Nobody said you can' t do it.' All of a sudden it' s, Oh no, you' re a bad boy now.' “
The Department of Revenue began sending out bills in January 2013, for $6.6 million in unpaid use and luxury taxes on cigarettes.
Taxes are based on purchase transactions, provided by online or out of state vendors.
“Fairness requires all taxpayers to be treated consistently,” Laux said. “Taxpayers who purchased tobacco products in stores over the past eight years paid applicable Transaction Privilege Tax and excise taxes at the time of purchase, and taxpayers who purchased tobacco products online should be required to do the same.”
In Elliott' s case, the Department of Revenue said he owes $4,427.18 including unpaid taxes, interest and a penalty charge.
“I had no idea this was coming,” he said. “It' s like getting hit in the head with a bat. Thank God, we just have enough in there to take care of the problem so we don' t have all this headache that could follow.”
Elliott said he' s going to pay the bill and then look into whether he really owes the state that much money.
The Department of Revenue can waive the penalty charge, if a bill is paid within 15 days.
But, per state law, taxpayers are stuck with the interest.
Laux said if someone can' t pay a bill in full, payment plans are available.
If you get a tax bill that you don' t agree with, you have 45 days to file a protest.
Copyright 2015 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.
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