Government Stopping Tobacco Sales!

[hookah_lvr]

This is going to be HUGE for us who buy hooka tobacco!  All the online shops are affected by this.  Read more here ( [url="http://roguepundit.typepad.com/roguepundit/2005/03/a_change_to_int.html"] [url="http://roguepundit.typepad.com/roguepundit/2005/03/a_change_"]http://roguepundit.typepad.com/roguepundit...05/03/a_change_[/url][/url] to_int.html ) or read below: 
Major credit card companies will no longer handle Internet sales of cigarettes under a nationwide agreement announced Thursday.
The move is aimed at illegal dealers that are trying to avoid sales taxes or sell to underage customers.
The thriving trade of Internet tobacco undercuts local businesses that sell cigarettes and often avoids sales tax for states and cities, allowing smokers to buy cigarettes considerably cheaper online.
The agreement among virtually all credit card companies, state officials from around the country, and the Bureau of Alcohol, Tobacco, Firearms and Explosives is effective immediately.
It's not difficult to charge something on a credit card in a way that doesn't disclose what was bought.  How long will it take internet cigarette retailers to avoid this limitation?
The ATF press release notes the following:
Virtually all sales of cigarettes over the Internet are illegal because the sellers are violating one or more state and federal laws, including: (1) state age verification laws; (2) the federal Jenkins Act (which requires that such sales be reported to state authorities); (3) state laws prohibiting or regulating the direct shipment of cigarettes to consumers; (4) state and federal tax laws; (5) federal mail and wire fraud statutes; and (6) the federal RICO law. Many of the sales made by foreign websites also violate federal smuggling, cigarette labeling, money laundering and contraband product laws.
The largest internet cigarette retailers are located in other countries (like Switzerland, Russia, and Korea) where cigarettes are cheaper.  Their ownerships are sometimes hidden behind front corporations in nations with little law enforcement (example here).  Back to the original article. 
"The way the system works now, tobacco can get into the hands of minors," said Bob Cooper, spokesman for the Idaho attorney general's office. "And these sales are depriving the states of revenue."
Smokers would still be able to buy cigarettes over the Internet, but they would not be allowed to use their credit cards, including Visa, MasterCard, American Express and Discover. Instead, they would have to use checks, money orders or some other payment system that would probably hold up delivery.
The long-unchecked practice of buying cigarettes and chewing tobacco over the Internet across state lines is illegal in New York and many other states, but enforcement has been difficult.
Such purchasing over the internet is also illegal in Oregon.
Research shows that only 2-3 percent of children buy cigarettes on-line.  In other words, most internet cigarette sales are to adults.  And when children are using credit cards to buy cigarettes, whose fault is that?  Besides parental supervision issues and retailers who will sell to anybody with money, there are also the institutions that make it really easy for too many people to get credit cards.  
Also from the ATF press release:
All credit card companies have long-standing policies that prohibit the use of their credit card for illegal transactions. During the meeting held today, the state and federal authorities outlined the many laws that are being violated, and the companies agreed to take a variety of steps to ensure that their services are not used to facilitate these illegal transactions.
Among the many actions some of the credit card companies have adopted to stop illegal online sales are: (1) adopting policies to prohibit the use of credit cards for the illegal sale of cigarettes over the Internet; and (2) agreeing to investigate and take action with respect to any Internet sellers identified by law enforcement as using their credit cards for illegal online cigarette sales.
Makes you wonder (but only a little bit) why credit card companies weren't doing these things already.  Again, back to the original article.
The ATF estimated that millions of dollars from illegal cigarette sales are diverted each year to terrorists and criminal organizations. And states lose more than $1 billion a year in tax revenue from Internet tobacco sales, said Sheree Mixell, ATF spokeswoman.
One thing we know from considerable experience is that the higher that sin taxes are, the more people will work to avoid them, whatever the age.  Oregon's cigarette tax at $1.18 per pack is tenth highest in the nation (the average is $0.84 per pack).  In other words, this type of tax avoidance is not going to go away. 

[hookah_lvr]

Also you can learn more here: [url="http://www.consumeraffairs.com/news04/2005/tobacco_ags.html"]http://www.consumeraffairs.com/news04/2005...obacco_ags.html[/url] 
March 17, 2005 State and federal law enforcement officials have reached agreement with credit card companies to prevent the illegal sale of cigarettes and other tobacco products over the Internet. The illegal sales have drained state and federal tax revenues and made cigarettes freely available to minors.
Earlier this week, MasterCard warned its member banks that they cannot accept charges for illegal tobacco sales, which would include most sales over the Internet in the United States.
Participants in the initiative announced today include state attorneys general from across the country, the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and credit card companies.
"Cigarette sales over the Internet ... are not only illegal; they are also a direct threat to public health, because they increase smoking rates, which leads to increases in lung cancer and other smoking-related illnesses," said New York Attorney General Eliot Spitzer. "By working with all the major card companies, we will severely restrict the ability of the Internet retailers to make these illegal sales."

[Highpockets]

Sounds like this is aimed at cigarettes. It seems likely that hookah
products will go unaffected. As it stands now I'm pretty sure that the
massel we buy is not taxed, at least not like cigarettes, since it is
so much cheaper relatively. Legislators simply haven't caught onto this
phenomenon yet. I'd imagine we're safe.

[hookah_lvr]

I've already heard of hookah shops that have had problems with their merchant accounts being pulled!  Cant remmember who, I was at a party, but this was recently, like less than 2 weeks. 
You can't really tell cigarette and cigar companies, "Sorry you can't sell cigarettes or cigars anymore!  If only you added some flavoring and molasses we could help you out."

[Highpockets]

Well its loose tobacco, and as a legal matter I think its distinct, or
else massel prices would be much higher, as they are abroad. If they
are distinct for taxation they should be distinct for enforcement.
Especially if the statute singles out cigarettes, it seems clear that
massel is not covered.

[Mathazar]

I like to buy my cigars online,  I wonder when all this will go into effect,  god this sucks!!! 

[Jeff_T]

I heard from a Smiley at Smiley's hookah lounge yesterday about this. I believe the online sites that sell ma'assel and take credit cards, e.g. hookah-shisha.com, etc. are going to start accepting money orders. THis will allow them to still sell the tobacco online with out the taxes associated with tobacco sales in the U.S.

[mushrat]

I'd say pay-pal will also flourish under these conditions...yea Ebay.
 

[Mathazar]

I've been trying to access Hookah-Hookah's tobacco page since last
night and I keep coming-up with a blank page.  They're either
updating their site with the new flavors, or they've shut-down due to
this new online tobacco law.  That would royally suck if
Hookah-Hookah was forced to stop selling online.  I don't think
they're company is successful enough to survive on money orders alone
right now,  since all of their business comes from credit card
holders.  Well,  if I gotta use money orders,  then
that's what I'll use.  But it's a MAJOR bummer,  since I
always like to place an order the night before and then have it
delivered Overnight Delivery the next day.

MAJOR BUMMER!!! 

[NERV]

i didnt read all of the article, now IF this were to affect massel,
would the effect be no more sold, or would it be a higher price?

either way if it does apply to massel this is terrible news

[wyteboy]

math let us know but I am sure it was just being updated...i doubt it would have THAT an immediate affect! keep us posted!

[Mathazar]

Yeah,  I'll do that

[To100YearsToL8]

Mark my words... this won't hold up for long.

[cypress]

There is always loop holes around any system. Some how we will figure it out and still be able to get the goods. 

[Mathazar]

Well,  all I know is that ever since this law went into
effect,  Hookah-Hookah & SaharaSmoke have shutdown their
tobacco operations.  And that really BLOWS,  since I was
going to place an order this week.......dammit 

I hope Hookah-Shisha hasn't suspended operations of their online ordering,  also

[cypress]

I dont understand what is going on with HH. I can get all the way to
the check out with no problems. I just tried it this morning. Maybe try
calling or you may have a setting issue with your browser?

[Mathazar]

It could be my browser,  I'm using a recently updated version of
Mozilla Firefox.  I'll probably just have to use IE from now on
when placing orders. 

Thanks for pointing that out to me,  cypress