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Black Market Cigarette Sale Targeted

A bill to crack down on Internet and mail-order cigarette retailers that skirt tax laws has passed the Senate with no debate.

The bill aims to make it more difficult for smokers to dodge state taxes, allowing the state to tap into the estimated $54 million in lost tobacco tax revenues every year. Under federal law, out-of-state tobacco sellers aren´t required to collect sales taxes. But they´re supposed to report the sale, allowing the California Board of Equalization to collect the tax– about nine dollars per carton– from the buyer.

If the measure is successful, state officials could ban companies from selling cigarettes to California smokers if they continuously skirt state and federal tax laws. The bill passed the Senate today with a vote of 24-13. It now goes to the governor, who hasn´t yet taken a position on it.