H.R. 4081 would prevent tobacco smuggling, to ensure the collection of all tobacco taxes.
Detailed Summary
Prevent All Cigarette Trafficking Act of 2008 or the PACT Act - Amends the Jenkins Act to revise provisions governing the collection of taxes on, and trafficking in, cigarettes and smokeless tobacco.
(Sec. 2) Revises the definition of "cigarette" to include roll-your-own tobacco and to exclude cigars. Defines "delivery sale" to mean any sale of cigarettes or smokeless tobacco to a consumer ordered by telephone, the mails, or the Internet or other online service . Redefines "person" to include state, local, and Indian tribal governments. Redefines "use" to include the consumption, storage, handling, or disposal of smokeless tobacco, in addition to cigarettes.
Applies state tobacco tax reporting requirements to: (1) the sale or advertising for sale of smokeless tobacco products; (2) persons who ship or transfer cigarettes and smokeless tobacco products; and (3) the shipment of cigarettes or smokeless tobacco into a locality or Indian country that taxes the sale or use of such products. Requires sellers of tobacco products to file with the Attorney General reports filed with state tobacco tax administrators. Imposes additional information reporting requirements on such sellers, including disclosure of electronic mail addresses, website addresses, and authorized agents for service of process. Limits the use of information received from sellers of tobacco products solely for tax enforcement purposes.
Expands requirements for delivery sales by requiring each delivery seller, with respect to delivery sales into a specific state and place, to: (1) comply with specified shipping and record-keeping requirements, all state, local, tribal, and other laws generally applicable to sales of cigarettes or smokeless tobacco as if such delivery sales occurred entirely within the specific state and place (including laws imposing excise taxes and licensing and tax-stamping requirements), and specified tax collection requirements; (2) include on the bill of lading for the shipping package containing cigarettes or smokeless tobacco a clear and conspicuous statement that federal law requires the payment of all applicable excise and sales taxes and compliance with applicable licensing and tax-stamping obligations; (3) comply with specified weight and age verification requirements; and (4) keep records of all delivery sales, organized by state, for four years and make such records accessible to state, local, and Indian tribe tax authorities and the Attorney General.
Prohibits the delivery of cigarettes or smokeless tobacco unless the excise tax on such products has been paid and any required stamps or other indicia of payment are properly affixed to the products. Allows an exception for states that require delivery sellers to collect the tax from consumers and remit such tax to state or local tax authorities.
Requires the Attorney General to compile a list of noncompliant delivery sellers of cigarettes and smokeless tobacco and to distribute such list to state attorneys general and tax administrators and common carriers and other couriers, including the U.S. Postal Service. Prohibits the delivery of any package to, or on behalf of, a noncompliant delivery seller without determining that such package does not include cigarettes or smokeless tobacco.
Makes a violation of the Jenkins Act a felony (currently, a misdemeanor). Increases civil penalties for violations to the greater of $5,000 for a first violation or $10,000 for any other violation, or two percent of the gross sales of cigarettes or smokeless tobacco for the year before the violation.
Grants U.S. district courts jurisdiction to prevent and restrain violations of this Act and to provide injunctive or equitable relief, including money damages. Empowers the Attorney General to administer and enforce this Act. Authorizes a state attorney general, a local government, an Indian tribe that levies a tax subject to this Act, or a holder of a permit as a manufacturer or importer of tobacco products or as an export warehouse proprietor (permit holder) to bring an action in U.S. district court to prevent and restrain violations of this Act. Authorizes a state attorney general or such a local government or Indian tribe to provide to the Attorney General or a U.S. Attorney evidence of a violation of this Act by any person not subject to state, local, or tribal government enforcement actions for violations of this Act.
Establishes a PACT Anti-Trafficking Fund into which 50% of criminal and civil penalties collected in enforcing this Act shall be deposited and available to the Attorney General to enforce this Act and other laws relating to contraband tobacco products.
Requires the Attorney General to make information on enforcement actions publicly available (including on the Internet) and to report to Congress annually on such actions.
(Sec. 3) Amends the federal criminal code to treat cigarettes and smokeless tobacco as nonmailable matter and prohibit their deposit into the U.S. mails. Authorizes the U.S. Postal Service to refuse to accept nonmailable tobacco products and to issue cease and desist orders to anyone mailing such products. Imposes civil penalties for failure to comply with such orders. Exempts from such prohibition: (1) cigars; and (2) mailings within Alaska or Hawaii; or (3) mailings for business purposes between legally operating tobacco businesses, and by individuals for noncommercial, nonbusiness, and non-money making purposes.
Requires the seizure and forfeiture of any cigarettes or smokeless tobacco illegally deposited into the U.S. mails. Imposes a criminal penalty for intentionally placing nonmailable tobacco products in the U.S. mails.
Establishes in the Treasury the PACT Postal Service Fund to hold criminal and civil fines for mailing violations. Makes 50% of such fines available to the Postmaster General to enforce mailing restrictions on cigarettes and smokeless tobacco products.
Allows a state, local government, or Indian tribe to obtain appropriate injunctive or equitable relief for violations of such prohibition in a civil action in a U.S. district court.
(Sec. 4) Prohibits a tobacco product manufacturer or importer from selling in, delivering to, or placing for delivery sale in a state that is a party to the Master Settlement Agreement (executed November 23, 1998, by state attorneys general and certain tobacco manufacturers) any cigarette of such a manufacturer that is not in full compliance with the terms of the Model Statute or Qualifying Statute enacted by such state. Grants: (1) U.S. district courts jurisdiction to prevent and restrain prohibited sales; and (2) the Attorney General authority to administer and enforce compliance with restrictions on such sales.
(Sec. 5) Authorizes any officer of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to inspect the premises and records of sellers of cigarettes or smokeless tobacco. Imposes a civil penalty for noncompliance with an ATF inspection or a court order to compel such inspection.
(Sec. 6) Declares that nothing in this Act shall be construed to affect, amend, or modify specified agreements or limitations relating to the collection of taxes on, and related matters regarding, cigarettes or smokeless tobacco sold in Indian country or to inhibit the coordination of law enforcement by states or other jurisdictions, including Indian tribes, with respect to interstate sales or seizures of tobacco products.
(Sec. 7) Expresses the sense of Congress that unique harms are associated with online cigarette sales and that this Act is not intended to create a precedent regarding the collection of other state sales or use taxes by out-of-state entities that do not have a physical presence within the taxing state.
(Sec. 8) Makes provisions of this Act effective 90 days after enactment of this Act, except for provisions relating to ATF authority, which are effective immediately.
(Sec. 9) Provides that the invalidation of any provision of this Act or its application will not affect other provisions of this Act, or its application to any other person or circumstance.
Status of the Legislation
Latest Major Action: 10/2/2008: Read twice. Placed on Senate Legislative Calendar under General Orders. Calendar No. 1115.
Points in Favor
(Log in to edit the wiki and be the first to show why the bill should pass!)
Points Against
(Log in to edit the wiki and be the first to show why the bill should not pass!)
Visitor Comments
Deborah Simpkins
September 8, 2008, 2:41pm (report abuse)This bill according to Congressman King's office stated that this bill will stop the export of ciggarttes to terriorist. Does it really? Or does it stop the American public from getting a better deal on a product that has seen enough taxes, and hurts the Native Americans from producing revenue for their own people! I say no or ammend the bill to only tax sales for out of country sells.
CONCERNED
September 11, 2008, 10:44am (report abuse)This bill is outright discrimination targeted against Native Americans! Do these people that are for this bill even realize how many people will lose their jobs/only way to make income. How much better off will NY State be when 1,000's of unemployed Natives, as well as non natives rush to file for welfare in order to provide for their families. Why don't you just LEAVE US NATIVE AMERICANS ALONE and RESPECT OUR SOVEREIGNTY! Not only that, but I thought America was the land of the FREE.. FREE from being dictated to where we can buy products from. One other thing, most of the Tobacco businesses this bill is targeting DO pay their Federal Income Taxes.. LEAVE US ALONE!
Roger
September 12, 2008, 11:22am (report abuse)This bill is a bunch of crap to discriminate against native americans by a jealous new york state pushing the feds. People buy tax free cuz the taxes are too damn high on EVERYTHING already... free commerce is supposed to be americas backbone.... BS
Louis
September 14, 2008, 8:04pm (report abuse)Plus there are certain kinds of tobacco you just can't buy in the U.S., like Swedish snus (the Camel and American versions are NOT the same product) and English nasal snuff.
anders
September 21, 2008, 11:03am (report abuse)There are so many articles published on smokeless tobacco products that contain very misleading information for consumers. Many articles claim that smokeless tobacco in particular Swedish snus are less harmful than cigarette. There are no clear evideces that snus/smokeless tobacco can cause cancer. Now it is up to consumer to choose whether the will quit totally tobacco products or keep enjoying nicotine consuming smokeless tobacco snus. Find more about at
http://www.swedsnus.com
Disgusted
September 23, 2008, 3:24pm (report abuse)As a Native American I strongly oppose this bill. Huge companies get tax breaks - on land and on setting up businesses in economically disadvantaged communities. This bill if passed will put thousands of people out of work - not only the smokeshops, but office supply companies, etc. In addition, why are Natives being characterized as Terrorists? What about the thousands of "Americans" who send money back to their homelands who may support terrorism? How dare you who invaded our lands call us terrorists. If you pass this bill you are only reinforcing the stereotype of white supremacy.
More Federal BS
November 21, 2008, 8:33pm (report abuse)As a Swedish snus user, I'm very concerned about this bill. I've heard that USPS and major package carriers will not be able to ship tobacco. With no tobacco shops nearby that sell my snus, what am I to do? Am I supposed to return to Big Tobacco's cigarettes, lining the pockets of both the corrupt Washington theives, and the corrupt Big Tobacco CEOs? If this bill becomes law and ends my snus shipments as I fear, I will do my best to JOIN the illegal tobacco trade before I pay these theives. This bill is not about terrorists or health, this bill is about cronyism and corruption, and further erodes personal freedom.
"Land of the Free," where have you gone? Deliver me from the "Land of Socialism and Fascism!"
What you can do
January 6, 2009, 9:57am (report abuse)I urge you all to contact your United States Representatives and tell them to vote no on HR 4081. A list of US Representatives can be found by going to http://www.house.gov/house/MemStateSearch.shtml and clicking on your state. Also call or email your US Senators and tell them to vote no on S. 1027. The list of Senators can be found at http://www.senate.gov/general/contact_information/senators_cfm.cfm Tell them we need meaningful legislation that actually does something about terrorism. The PACT Act does not fight terrorism. This Act will also take non-hazardous goods and make them nonmailable. This will mean a loss of millions of dollars of business for the U.S Postal Service. It will also means losses in business for other carriers meaning less work for employees and less taxes being paid to the government. Also how much would this Act cost to enforce? Isn't there a better way to spend our tax dollars?
Please get involved and help defeat this Act.