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The Limits of Passing Higher Taxes

This story make me laugh.

27 News has found despite a state law requiring internet cigarette retailers and other direct marketers of cigarettes to register with the state and agree to collect state taxes, not one business has done so since the law’s inception in 2005.

“We have no submissions,” wrote Department of Revenue Deputy Tax Division Administrator Lili Best Crane, in response to a request from 27 News for information on the permits required to directly market cigarettes in Wisconsin.

Wisconsin’s cigarette tax is slated to increase by $1 to $1.77 per pack. Trade group representatives for merchants selling cigarettes at retail outlets have predicted the increase would motivate some purchasers to defect to the internet in an attempt to avoid paying sales tax.

Yeah.  I’m sure that the online cigarette reseller based in Bermuda with its servers in the U.K. are real worried about the Wisconsin state government Despite the Wisconsin Department of Revenue’s delusions of omnipotence, its reach does have limits. 

This is also rather comical:

In 2005, Governor Doyle ordered then-Revenue Secretary Michael Morgan to discontinue the collection of taxes owed on past online, cigarette purchases, after media reports revealed purchasers being required to pay included senior citizens on fixed incomes. “What we really want to get done is have the people who are selling those cigarettes pay the tax,” Doyle told the Milwaukee Journal Sentinel at the time.

In 2004, Department of Revenue Auditor Christopher Roy projected sales tax collections as a result of requiring direct cigarette marketers to obtain permits and submit taxes on their sales would total $1.1 million by 2007.

Revenue Department spokesperson Meredith Helgerson has not responded to a request for comment from 27 News on the failure of any business to submit required information or tax amounts from direct cigarette sales to the state.

Helgerson said $571,000 in back taxes collected by Revenue officials since 2005 included amounts from online cigarette purchasers. The collections occurred despite Doyle’s 2005 directive to cease the collections of back taxes from the purchasers of cigarettes online.

So… Doyle’s Department if Revenue is ignoring him.  Nice to see that he has his administration under control. 

Also, isn’t it nice to know that the revenue projections for the collection of sales tax for online cigarette sales are waaaaaay off, yet those same projections were used in the current budget?  Golly, could there be a budget shortfall in the future?  And just how much are we spending in enforcement for this tax?

Posted by Owen at 2106 hrs
Politics + Politics - Wisconsin

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