"Tax-free cigarettes" costly to states.

• Position: News Briefs - Brief Article

State attempts to compensate for declining revenues by hiking cigarette taxes are likely to be undermined by online vendors who flout a federal law that requires them to report such sales to state revenue officials, according to a new report by the U.S. General Accounting Office. Although the so-called Jenkins Act requires Internet cigarette vendors to provide states with the names and addresses of their customers, few of these merchants are complying with the law. The GAO identified 147 Web sites for U.S.-based Internet cigarette vendors. None of these Web sites included information to...