The law requires that vendors who ship cigarettes into another state release information about the purchases to state taxing authorities...

May 9, 2007 — Sixty-nine York County residents who thought they were getting a deal are learning that the tax man is always watching.

The Pennsylvania Department of Revenue sent letters to more than 4,300 people in Pennsylvania - including the 69 York County residents - who ordered cigarettes over the Internet since January 2005 informing the shoppers that they owe taxes.

The first batch of letters went out last month to people who are believed to have purchased at least 100 cartons and collectively owe $10.4 million in taxes.

At least 13 other states, including New Jersey, Ohio and New York, have been using information generated by the Jenkins Act to collect cigarette taxes. The law requires that vendors who ship cigarettes into another state release information about the purchases to state taxing authorities.

"Some Web sites falsely advertise that cigarettes are tax-free, and that's simply not true, and unfortunate," Department of Revenue spokeswoman Stephanie Weyant said.

Some cigarette-selling Web sites say they do not report to government agencies any information about sales, but Weyant said if that is the case, the sellers are violating federal law.

In Pennsylvania, cigarettes are taxed at a rate of $1.35 per pack of 20 cigarettes. Buyers must also pay 6 percent sales tax. Because of online purchases, the commonwealth is owed about $9.3 million in cigarette taxes and another $1.1 million in sales and use taxes, Weyant said.

She said the Department of Revenue was given information on more than 20,000 people who had ordered cigarettes online.

"Someone purchased 974 cartons," she said. "Some of them may have been for personal use, but some of those could have been purchased from the Internet and resold in the commonwealth."

She said selling cigarettes that aren't taxed increases competition for the commonwealth's 21,000 licensed cigarette retailers.

In Pennsylvania, it is legal to possess one carton of out-of-state cigarettes. But, Weyant said, the person who possesses those cigarettes is still responsible for paying state taxes.

"It doesn't matter if they buy them online or if they go to Delaware," she said. "They still need to pay taxes."

But they don't have to pay it all back immediately.

Weyant said more than 700 of the people who were sent letters in April have already enrolled in a payment plan.

"We want to make it known that that is an option," she said. "This gives us a way of trying to recover some of the taxes that we've lost."