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Internet Cigarettes

By: Associated Press
By: Associated Press

As cigarette taxes continue to rise, there's word states are losing millions in tax revenue as more people buy smokes online.

A federal law requires Internet cigarette sellers to provide state officials with names and addresses of their customers. States can then pursue the buyers to make sure they pay local sales taxes.

But a new report by the General Accounting Office said most Internet cigarette vendors are ignoring the law. The report said none of the 147 U.S. Web sites that sell cigarettes has posted information saying they comply with the law. Almost 80 percent admit they don't comply.

The trend could undercut efforts by states to raise revenue by hiking cigarette taxes. New York and New Jersey both have a $1.50 a pack tax -- the nation's highest.

Massachusetts' lawmakers recently approved a hike -- hoping to bring in an extra $190 million a year.


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