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Dan
Dan, Retired JD
Category: Legal
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Experience:  Retired attorney, general practice, with an additional background in financial planning,
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Is it illegal to purchase cigarettes online if I live in the

Resolved Question:

Is it illegal to purchase cigarettes online if I live in the state of Iowa?
Submitted: 8 years ago.
Category: Legal
Expert:  Dan replied 8 years ago.
Mail Carrier:

The issue has to do with the extreme amount of sales/excise taxes on cigarettes. When purchased online, you are typically avoiding paying those taxes because the seller hasn't filed and paid the taxes to the state. You can tell whether this is going to be an issue by whether there are valid tax stamps on the cigarette packages.

Iowa Cigarette Tax
Description: The tax is imposed on the sale of cigarettes and must be paid by the person making the first sale in Iowa. A stamp affixed to each cigarette package is proof that tax was paid.
Tax Rate: $1.36 per package of 20; $1.70 per package of 25

If someone buys their cigarettes from a source that hasn't paid their excise tax, then as the buyer you become liable for those excise taxes, and if you don't pay them within the required time frame (that could be quarterly or annual returns), you add on interest and penalties. The states are aggressive in tracking down who has made purchases of cigarettes that do not meet the excise tax law because the amount of tax revenue lost is huge, and they can make a dramatic impact all at once by catching the person. For instance, a 2 pack a day habit is 720 packs, at $1.36 excise tax each, or close to $1000 a year in excise taxes due.


I hope this has been helpful. Let me know if you have any followup questions. If none, please remember to click on the ACCEPT link so that I may receive credit for working on this topic with you. (I'd greatly appreciate it!)


Thank you,

Dan

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The information provided is general in nature only and shall not be construed as legal advice or to create an attorney-client relationship. You should always consult with a lawyer in your state.

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