NACS and convenience retailers are enjoying a huge win today, thanks to enactment of the Prevent All Cigarette Trafficking Act (PACT Act), which addresses the long-standing convenience store industry concern of tax evasion via remote sellers of tobacco products.
Today’s White House signing by President Barack Obama caps a 10-plus year effort by retailers to close loopholes that placed significant competitive disadvantages on brick-and-mortar retailers.
“We applaud Congress and the president for standing up for American taxpayers and small businesses and look forward to working with the administration to implement the provisions of this new law,” said NACS Senior Vice President of Government Relations Lyle Beckwith.
“The PACT Act will help combat illegal, online cigarette sales that have siphoned hundreds of millions of dollars in tax revenues away from state governments and undermined state laws that prevent America’s youth from gaining access to tobacco products,” added Beckwith. “This law is much more than a win for law-abiding retailers, but for law enforcement, state tax advocates and the American public.”
Effective 90 days after the president’s signature, the PACT Act: strengthens the Jenkins Act by making it a federal offense for any seller making a tobacco sale via telephone, the mail or the Internet to fail to comply with all state tax laws; state attorneys general can now seek injunctive relief and civil penalties against out-of-state sellers who distribute product to end users in their states; Internet and other remote sellers must now verify the purchaser’s age and identity through easily accessible databases and the person accepting delivery must verify their age; cigarettes and smokeless tobacco products are no longer eligible for shipment via the United States Postal Service (USPS).
Effective immediately, the Bureau of Alcohol, Tobacco, Firearms and Explosives has the authority to inspect distributors of cigarettes and levy a penalty against those who refuse inspection