Monday, March 3, 2014

U S Laws and regulations About Tax-free Cigarettes

Though tax-free cigarettes are available, several laws govern their sales.


Cigarettes are taxed at the federal, state and local levels. These forms of taxation increase cigarette prices considerably, making tax-free cigarettes an attractive option. Consumers obtain tax-free cigarettes from a variety of sources, including online dealers, international companies and duty-free stores. While consumers seek a tax break on cigarettes, federal and state laws govern the cigarette trade and may prohibit tax-free purchases.


Duty-Free Allowances


Duty-free shops operate in airports and other borders between nations to provide tax-free goods to consumers. In 2010, the legal allowance for duty-free cigarettes was one carton per adult consumer. In general, duty-free purchases can be made only once every 30 days.


Mailing Cigarettes


Several online cigarette vendors sell tax-free cigarettes that are sent to consumers through the mail. While it is legal to purchase cigarettes through these companies, a 2009 law entitled the PACT Act, which regulates cigarette purchases, prohibits the mailing of cigarettes through the U.S. Postal Service system; Private mail distributors can maintain alternative regulations that allow cigarettes to be mailed to customers.


Reporting Purchases


Even cigarettes purchased at duty-free shops or through online cigarette vendors are subject to state taxes. Laws vary by state, but many states require consumers to report cigarette purchases on tax forms. The PACT Act requires every U.S. cigarette vendor to report all sales to state tax authorities. This provision ensures that consumers accurately report cigarette purchases, as the state can otherwise verify the information with vendors itself.









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