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Press Release
May 31, 2006

Agency Nets Thousands of Dollars on Internet Cigarette Purchases

Oklahomans should be aware—purchasing cigarettes online comes with a price, and it’s not necessarily cheaper than buying from retailers or smoke-shops.

The Oklahoma Tax Commission has noticed a trend among Oklahoma smokers, one that is replicated in states across the nation. Smokers are turning to the internet to buy their cigarettes and tobacco products—sometimes in response to lower prices, but usually to avoid paying taxes on the products.

“We want Oklahomans to be aware that purchasing cigarettes online and not paying the taxes on them is illegal,” said Paula Ross, Oklahoma Tax Commission spokesperson. “We’ve already collected thousands of tax dollars from Oklahomans purchasing cigarettes online. However we wanted to remind everyone who has made a purchase, or is considering purchasing online, that taxes are due on these cigarette and tobacco products.”

According to Oklahoma law individuals cannot buy or possess untaxed cigarettes in quantities of more than 40 cigarettes, the equivalent of two packs. A person purchasing more than 40 untaxed cigarettes should actually have a cigarette license, buy tax stamps, and file monthly tax reports. The reality though is that many taxpayers who purchase cigarettes online are not doing this.

“In the past, we have sent taxpayer’s letters informing them of the taxes they owe due to purchasing without paying taxes,” said Ross. “This is something that we are seeing many states doing.”

In case you’re wondering how the Tax Commission knows if you’re ordering cigarettes online, the Federal Jenkins Act requires anyone who sells untaxed cigarettes into any state, to report those sales to each state monthly. As sellers report the information to the Tax Commission, the agency in turn notifies taxpayers of any taxes that are due on the cigarette sales.

“We want to continue to get the word out to taxpayers that although they may think they are getting a better deal on cigarettes by purchasing online, they cannot avoid the taxes due,” Ross stated.

To date more than 1,800 assessment letters have been sent out to taxpayers, for a total of $287,830.55 due in taxes, penalty and interest. At this time $168,671.95 has been remitted back to the Tax Commission.

Information and reporting forms can be found on the agency website at www.tax.ok.gov.



Copyright © 2006, Oklahoma Tax Commission
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Last Modified 5/31/2006


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