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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

February 16, 2007 at 9:42 AM

State’s selective taxation

What’s more harsh than the stench of old cigarettes on someone’s breath?

The state of Washington’s vindictive attack on smokers who buy their tobacco online. It was the subject of an A1 story in our paper today.

I don’t smoke and I think smoking is a bad thing. But the story left me fuming about the state’s arbitrary taxation.

Why does the state go all Jack Bauer on a guy who buys cigarettes online to avoid the state’s punitive taxes, while ignoring the thousands of people who avoid state taxes every day by shopping online for computers, TVs, music, clothes and who knows what else?

If the state wants to make tobacco illegal, give it a shot. At least that would be straightforward. Instead, the state is trying to change people’s lifestyles by selectively taxing their online purchases.

Who decides which habits are good or bad and which should be taxed?

It’s funny that a state that’s home to some of the leading online retail businesses would be so inconsistent in its approach.

There’s talk off and on about Washington and other states broadly taxing online retail sales, but the e-commerce industry has a lot of sway. If you shop around, you can still buy most anything you want online without paying tax.

Today’s story is interesting because it describes one way the state tries to collect taxes from out-of-state online retailers. It requests customer lists from tobacco retailers, then sends customers collection letters.

That’s a terrible system. It’s intrusive and only a few retailers are complying. It’s random and it encourages customers to shop from retailers that ignore state regulators.

It’s hard to be too sympathetic for Scott Adams, the smoker profiled in the story. He was one of the few who was caught by the state, ignored the tax bills he was sent and kept buying his weeds online.

But he’s got a point about the state unfairly targeting smokers. They don’t have lobbyists in Olympia and D.C. who can get the tax collectors to look the other way.

Comments | More in | Topics: E-commerce

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