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Spitzer: no smokes via UPS



There's no good reason why enterprises that carry parcels should feel legally obliged to check, opening the parcels if necessary, whether the sender and recipient have paid all the taxes due on their transaction. That's one reason why, if you order cigarettes by phone or online from an Indian tribal supplier, the U.S. Postal Service will be happy to deliver the cartons to your door. (Another reason: it remains a matter of legal dispute whether states can tax the tribes' sales in the first place.) Nonetheless, New York Attorney General Eliot Spitzer has just bullied UPS, the world's largest package carrier, into agreeing to cease the delivery of cigarettes to individuals nationwide. (N.B. -- not just in New York, but anywhere in the country -- including the 49 states whose citizens never got a chance to vote on Spitzer's elevation to his post). For now, at least, Spitzer can't reach the U.S. Postal Service itself with his legal threats, so that avenue of distribution remains open.

Nannyism is probably only a secondary motive for Spitzer in this case; he has long taken a forward role in enforcing the tobacco cartel, organized in 1998 with the assistance of state attorneys general, against attempts by independent makers and sellers of cigarettes to undercut the cartel and thus interfere with the states' lucrative flow of tax and settlement money. And it's hard to see why the principles at stake, once established, will not be carried further. For example, states would love to tax interstate sales of goods on eBay, many of which are shipped by UPS. What happens when a Spitzer successor demands that UPS cease to deliver shipments of goods bought on eBay unless the sender proffers evidence that sales tax has been paid? Will the delivery service fold up and go quietly then, too?

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.