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Mich. Collects $5.9 Million from Internet Tobacco Buyers
March 1, 2006

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News Summary

A crackdown on Internet tobacco sales has yielded $5.9 million in tax collections for the Michigan treasury, the Detroit Free Press reported Feb. 28.

About 9,000 residents have been forced to pay the state's $2-per-pack tobacco tax on purchases they made online, with the average back-tax bill coming to around $650. And that's just the proceeds from targeting one of 13 Internet sellers; thousands more online buyers in the state could also face big tax bills.

"We're assessing information and determining whether there is more tax liability," said state Treasury Department spokesman Terry Stanton. "We reserve the right to take any action we need to get information."

Like a handful of other states, Michigan has taken online tobacco sellers to court to obtain their customer lists in a bid to collect unpaid taxes. Some states have targeted sellers rather than buyers, however. Many web-based tobacco sellers tell customers it is their own responsibility to pay state taxes on cigarettes.

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