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President Signs PACT Act to Stem Illegal Tobacco Sales Over Internet

WASHINGTON, D.C.. – President Barack Obama yesterday signed the Prevent All Cigarette Trafficking (PACT Act), which addresses the long-standing convenience store industry concern about tax evasion by remote sellers of tobacco products.

The signing caps a 10-plus year effort by retailers to close loopholes that placed brick-and-mortar retailers at a competitive disadvantage to Internet sellers of tobacco, according to NACS, which proclaimed the signing a big win for the industry.

"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."
The Act, which takes effect 90 days after the president's signature, will:

• Strengthen 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.
• Require Internet and other remote sellers to verify the purchaser's age and identity through easily accessible databases and the person accepting delivery must verify their age.
• Prohibit cigarettes and smokeless tobacco products from being 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.
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