Stamping Out Unstamped Cigarette Supplies

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Stamping Out Unstamped Cigarette Supplies

BUFFALO, N.Y. -- New York state is taking action to lessen the supply of unstamped cigarettes sold over the Internet or via the mail, reported Buffalo, N.Y.’s Business First .

Attorney General Eliot Spitzer said that Harold Levinson Associates has agreed to stop supplying unstamped cigarettes to companies that illegally resell them over the Internet or by mail order, according to the report.

HLA, located in Farmingdale outside New York City, is one of the state's largest cigarette tax stamping agents. According to the state, HLA sells more than 80 million packs of unstamped cigarettes per year.

Spitzer's office called the settlement the first of its kind. It was also hailed by the New York Association of Convenience Stores, reported Business First .

"State and local governments lose hundreds of millions of dollars each year in tax revenues. Brick-and-mortar retailers lose an enormous volume of legitimate trade," James Calvin, president of the trade group, said in the report.

Tax stamping agents are licensed by and purchase tax stamps from the state, the AG's office explained. Tobacco manufacturers sell their cigarettes to the licensed stamping agents, which place tax stamps on the packages and then resell them to licensed cigarette wholesalers and retailers, reported Business First .

Though certain entities -- such as the federal government, the United Nations and Indian tribes -- are permitted to purchase unstamped cigarettes for their own use, they must provide stamping agents with tax-exempt certification. Officials stated huge quantities of unstamped cigarettes have been purchased from licensed tax stamping agents, and then illegally sold those cigarettes over the Internet to purchasers who should have been charged taxes, according to the report.

There are about 100 licensed cigarette stamping agents in the state of New York, of which about 20 sell unstamped cigarettes, reported Business First .