2010-04-09 / Top Stories

Congressman Weiner Has Internet Cigarette Bill Signed

Outside the U.S. Post Office in Manhattan, Representative Anthony Weiner, Kevin O’Flaherty, the Northeastern regional director of the Campaign for Tobacco Free Kids and New York City Corporation Counsel Michael A. Cardozo discussed how the Prevent All Cigarette Trafficking Act (PACT Act), which President Obama signed into law last week, will reduce the number of underage smokers and bring the City upwards of $150 million in revenue. Weiner was the prime sponsor of the bill, which passed the House and Senate last month. Outside the U.S. Post Office in Manhattan, Representative Anthony Weiner, Kevin O’Flaherty, the Northeastern regional director of the Campaign for Tobacco Free Kids and New York City Corporation Counsel Michael A. Cardozo discussed how the Prevent All Cigarette Trafficking Act (PACT Act), which President Obama signed into law last week, will reduce the number of underage smokers and bring the City upwards of $150 million in revenue. Weiner was the prime sponsor of the bill, which passed the House and Senate last month. Outside the U.S. Post Office in Manhattan on Friday, following the signature by President Obama of a new law to crack down on tobacco smuggling and effectively shut down cigarettes via the Internet, Representative Anthony Weiner, New York City Corporation Counsel Michael A. Cardozo and Kevin O’Flaherty, the Northeastern regional director of the Campaign for Tobacco Free Kids, released data showing that New York City and State will reap a windfall in properly-paid tobacco taxes.

The Prevent All Cigarette Trafficking Act (PACT) of 2009, sponsored by Weiner, a member of the House Judiciary Committee, cleared the Senate and House last month.

The bill makes it a felony to sell tobacco in violation of any state tax law and effectively ends Internet tobacco smuggling by stopping shipments of cigarettes through the United States Postal Service. FedEx, UPS, and DHL have already agreed not to mail tobacco.

Weiner said, “This new law will give states and localities a major revenue boost by cracking down on the illegal sale of tobacco and close a major source of finances for international terrorists and criminals. Every day we delay is another day that New York loses significant amounts of tax revenue and kids have easy access to tobacco products sold over the Internet.”

Cardozo said, “Mayor Bloomberg extends enormous thanks to Representative Weiner for his efforts in getting this important piece of legislation through Congress. The bill, sponsored by Representative Weiner and signed by President Obama, will help solve two major problems – youth smoking and cigarette tax evasion – that the City has also fought against so strongly.”

“By closing this massive loophole, the PACT Act essentially shuts down Internet cigarette smuggling and ensures that New York State will see the millions it is due in tax revenue from Internet cigarette sales. Nearly a decade ago, I lead the fight to ban the sale of cigarettes online and by mail-order – the first of its kind in the nation – to ensure that our state gets all tax monies owed in full and on time. I applaud Congressman Weiner for leading the charge on this issue on the national level in order to protect both the fiscal health of New York State and the welfare of thousands of children,” said State Senator and Deputy Majority Leader Jeffrey D. Klein.

“This legislation is a milestone in the fight to keep kids from smoking. By requiring that cigarettes sold over the Internet include the appropriate federal, state and city taxes, the PACT Act will make sure that more adults will quit smoking and that fewer kids will start. We are grateful to Representative Weiner for his tireless work on this issue,” said Flaherty.

Estimates based on reporting from the New York State Department of Tax and Finance found that New York State loses up to $500 million from untaxed Internet tobacco sales and that New York City may lose as much as $150 million. According to a recent Government Office of Accountability (GAO) report, Hezbollah profited $1.5 million from the sale of illegal tobacco from 1996-2000.

The PACT Act Cracks Down on Illegal Tobacco Sales in the Following Ways:

1. Ends Internet Sales of Tobacco by Banning Mailing of Cigarettes: Makes cigarettes and smokeless tobacco products non-mailable matter through USPS, except in limited cases. While FedEx, UPS and DHL have agreed not to ship tobacco products, USPS has continued to deliver tobacco products bought over the Internet.

2. Strengthens the Jenkins Act: Increases existing penalties from a misdemeanor to a felony, making it a federal offense for any seller making a sale via telephone, the mail, or the Internet to fail to comply with all state tax laws.

The legislation also empowers each state to enforce the federal law against out-of-state sellers sending delivery sales into its state by giving state Attorneys General the authority to seek injunctive relief and civil penalties against violators.

3. Empowers Law Enforcement: Allows the Attorney General to compile a list of delivery sellers who fail to comply with the PACT Act or states’ tax laws.

4. Mandates Age Verification: Internet and other remote sellers will be required to verify the purchaser’s age and identity through easily accessible databases. It also requires the person accepting delivery to verify their age.

5. Grants ATF Inspection Authority: Gives the Bureau of Alcohol, Tobacco, Firearms and Explosives inspection authority, including on reservations, for distributors of cigarettes and creates a penalty for those who refuse inspection.

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