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Thursday, July 28, 2005 

Anger: Minnesota Tax Maddness

The State of Minnesota recently had to shut down most state services due to an inability of the Governor and the State Legislators to agree on a budget. They used State Employees and the citizens that rely on the services provided by the state as pawns in some stupid political agenda. One result is that the excise tax on a pack of cigarettes jumped 75 cents (from $0.48 to $1.23), I guess they think that they can tax the State into prosperity, which is like trying to lift a bucket you are standing in by yourself. It took them a month, but it seems someone has figured out that people will go to great lengths to avoid paying taxes, go figure.

The GAO report predicted that by 2005, Internet cigarettes sales would climb to $5 billion nationally and that states would be losing about $1.4 billion in revenue.

Once they figured out this simple fact, they decided to try and recapture that lost revenue.
In the past few months, the state sent letters to 1,100 buyers of Internet cigarettes, having obtained the names from the sellers or other sources. So far the state has collected about $46,000 in back taxes, Hoyum said. Moreover, the department intends to work with the U.S. Postal Service and commercial transportation companies to monitor cigarette deliveries to residential addresses.
I wonder how much collection that $46,000 cost the State?

Of course, the “evil internet” is to blame.
The law has been widely ignored by Internet sellers and seldom enforced by state or national governments over the past few decades, a 2002 report by the General Accounting Office (GAO) report found. Most cigarette websites don't even hint that state taxes must be paid.

You might think that there was no tax avoidance, porn or crime of any sort until the internet age. I guess it isn't possible that people will drive 30 minutes to Wisconsin to stock up on smokes. Nah, must be an internet thing.

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