By Alex Davidson
U.S. Rep. Anthony Weiner (D-Kew Gardens) introduced federal legislation that would require businesses selling cigarettes online to send the checks to the city representing taxes added on to the retail price or face legal challenges. According to Weiner, who put forth the legislation last week, the city loses out of an estimated $50 million yearly – money which could help stem multibillion-dollar budget gaps.
“Letting online cigarettes retailers evade the sales tax puts brick and mortar sellers at a competitive disadvantage and is unfair to consumers who lack internet access,” Weiner said. “The city should be able to go after these online scofflaws.”
Howard Beach and Ozone Park, represented by City Councilman Joe Addabbo (D-Howard Beach), who voted against Republican Mayor Michael Bloomberg's smoking ban, are two communities with large smoking populations that lose out on tax dollars when online retailers do not fork over sales tax revenues to city officials.
Weiner, who represents the communities of Forest Hills, Fresh Meadows, Richmond Hill, Ozone Park, Howard Beach, and the western portion of the Rockaway peninsula, cited a study by the U.S. General Accounting Office that showed Queens and New York are denied millions of dollars in sales tax revenues because online retailers are withholding the funds.
The legislation Weiner introduced, called the Local Government Internet Tobacco Sales Enforcement Act, would give New York City a cause of action to pursue civil penalties against online retailers that fail to pay. Under provisions in the bill, retailers would be subject to up to a $5,000 fine for their first failure to pay on an individual transaction and then up to a $10,000 fine for every transaction thereafter on which they fail to pass on the sales tax revenues.
Bloomberg has proposed a $45.7 billion budget that will require city and borough residents to continue doing more with less following several years of multi-billion dollar budget deficits.
The city currently has a $1.4 billion surplus in its coffers but is facing a $2 billion gap for the 2005 fiscal year and a $3.2 billion gap for fiscal year 2006.
Weiner, who has been toying with the idea of challenging Bloomberg in 2005 in the race for mayor, said the $50 million could be used to help the city during this financially strapped period.
Reach reporter Alex Davidson by e-mail at email@example.com or by calling 718-229-0300, Ext. 156.