Texas Comptroller of Public Accounts

Texas Comptroller of Public Accounts, Glenn Hegar

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For Immediate Release
January 5, 2010

Online tobacco sales need tighter controls

By Susan Combs
Texas Comptroller of Public Accounts

It’s time to overhaul outdated laws that allow cigarettes and other tobacco products to be sold online without verifying whether the purchaser is underage. A federal bill with wide bipartisan support called the Prevent All Cigarette Trafficking (PACT) Act will help this happen.

Internet and other remote sales of cigarettes and smokeless tobacco are rampant, largely because of the antiquated federal statutes that govern this kind of transaction. Remote tobacco vendors can sell to teenagers (or even younger children) as online ordering and home delivery enable kids of any age to buy the tobacco products they can’t get from local retailers.

Convenience stores and other conventional tobacco retailers enforce tight restrictions on sales to minors and ID verification. They do it right, but online retailers face no restrictions. To protect our children from the health risks of tobacco use, we must demand the same restrictions placed on brick-and-mortar establishments be followed by online retailers.

Right now, remote tobacco sales are governed by the Jenkins Act, a 60-year old federal law that is ill-equipped to deal with modern online commerce. To bring federal statutes up to date, Congress is considering the PACT Act.

S.1147, the PACT Act, would give federal law enforcement officials the tools and authority they need to regulate remote delivery of tobacco products and close the loophole kids are using to get the cigarettes and smokeless tobacco they can’t get in stores. It would subject offenders to felony charges.

The PACT Act would also force remote sellers to comply with the same cigarette and tobacco tax laws that other vendors follow. Because they don’t have to comply with the state’s cigarette tax laws, the remote tobacco sellers offer discounted prices, making it hard for traditional cigarette vendors in Texas – both mom-and-pop convenience stores and big stores alike – to compete. This, in addition to the effects of a recession, can have a negative impact on those businesses and the jobs they provide.

Internet sales have become an integral part of our economy. Online commerce allows businesses to expand their customer bases, create jobs and boost the economy. But Internet sellers must play by the same rules as Main Street businesses. The PACT Act will help enforce laws designed to keep tobacco products out of the hands of our children and help ensure that all businesses pay their fair share of taxes.



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