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ALEXANDRIA, Va. - The National Association of Convenience Stores (NACS) lauded the House Judiciary Subcommittee on Courts, the Internet, and Intellectual Property for passing the Internet Tobacco Sales Enforcement Act (H.R. 2824). The bill passed unanimously by a voice vote this morning. NACS said that the Act, if passed into law, would level the playing field with respect to cigarette sales between remote sellers and traditional retailers. The bill will now be sent to the full House Judiciary Committee for consideration.
This legislation, introduced by Representatives Mark Green (R-Wis.) and Marty Meehan (D-Mass.), would give states the authority necessary to enforce the Jenkins Act, a law passed in 1949 that requires cigarette vendors to report the interstate sales of cigarettes. The law is currently ignored by virtually all Internet and mail-order retailers, and a loophole keeps states attorneys general at bay when it comes to prosecuting offenders. Specifically, the bill would require all Internet sellers, including Indian tribes, to comply with the Jenkins Act, and holds these sellers directly liable to states for any infraction.
Following the Subcommittee's passage of the bill, both Reps. Green and Meehan thanked the many groups, including NACS, that worked together in bipartisan fashion to produce a bill that would help keep cheap cigarettes out of the hands of minors.
"This legislation would be a major step forward for the over 132,000 convenience stores operating in the United States," said Allison Shulman, NACS' director of government affairs. "This would level the playing field and ensure that remote merchants will no longer have a tax advantage over traditional retailers."
Last month, with the future of convenience stores' cigarette business very much at stake, NACS, the Society of Independent Gasoline Marketers of America (SIGMA) and the Petroleum Marketers Association of America (PMAA) organized a "Tobacco Lobby Day" to give retailers the opportunity to meet face-to-face with their elected leaders and express their support for remote sales legislation.
According to economist Patrick Fleenor, chief economist with Fiscal Economics, Inc., states are expected to lose nearly $500 million in taxes in fiscal year 2003 as a result of Internet sales of cigarettes. Lost state revenues could skyrocket to nearly $4 billion in fiscal year 2004, according to Fleenor's testimony before the Subcommittee on May 1, 2003.