House Panel Approves ‘Net Tobacco Bill

Native Americans are gearing up to oppose legislation that gives states the authority to enforce federal laws
against Internet tobacco retailers. The bill gives states the authority to
enforce the Jenkins Act, which requires cigarette vendors to report interstate

The Internet Tobacco Sales Enforcement Act (H.R. 2824), approved on a voice
vote Wednesday by the House Judiciary Committee, requires Web cigarette vendors, including Indian tribes, to report sales
to state tobacco tax authorities each month. Under the bill, state attorneys
general will be able to sue tobacco vendors for civil and criminal penalties
in federal court for failing to comply with the law.

The Jenkins Act already requires that companies shipping cigarettes to
out-of-state customers report those sales to the respective states. The
sellers are not required to collect the taxes but report the individuals who
are buying the cigarettes. States then collect the taxes from the individuals.
Refusal to provide a report constitutes a misdemeanor punishable by up to one
year in prison and a $1000 fine.

The law, however, has been widely ignored by Internet and other remote sellers
of tobacco products. At a May subcommittee hearing on the bill, the General
Accounting Office testified that none of the Internet sites selling cigarettes
were filing the required reports, and 78 percent openly stated that they did
not comply or said they were not subject to the Jenkins Act.

“Kids are getting their hands on cheap cigarettes and states are being denied
revenues,” bill sponsor Mark Green (R-WI) said.

The bill is strongly supported by the National Association of Convenience
Stores and the Campaign for Tobacco-Free Kids. Native American groups,
however, think the bill infringes on the constitutional sovereignty of Indian
lands and is more about revenue collection than children’s health.

“We are not opposing enforcement of the Jenkins Act,” John Dossett, general
counsel for the National Congress of American Indians (NCAI), told “What’s unusual about this bill is giving states the
authority to enforce federal laws. This is a very tough issue for us. Very few
Indian tribes are involved in this [online cigarette sales]. It is mostly
individuals living on tribal grounds.”

Dossett said his group supports a Senate version of the bill that beefs up
penalties for violations of the Jenkins Act but keeps enforcement in federal

“Indian reservations are a federal enclave. We understand our obligations
under interstate sales laws, and we’ve fully supported federal enforcement in
Indian country,” Dossett said. “This bill would do away with tribal immunity
from state laws.”

Dossett also dismissed claims that the bill is intended to keep cigarettes out
of the hands of children.

“You’ll notice there is no provision in the bill for age verification,” he
said. “Revenue collection is driving this. It’s about convenience stores
losing revenue to Internet sales.”

The NCAI hopes to keep the bill from coming to a floor vote by pressuring the
House leadership to defer the legislation to the House Resources Committee.

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