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Pa. Moves To Collect Cigarette Taxes
by Chloe Albanesius
On the heels of a similar plan from New York City, officials in Pennsylvania announced Tuesday that residents who purchased cigarettes online from two specific vendors would receive bills from the state's Revenue Department for unpaid taxes.
"Many Web sites falsely advertise that cigarettes can be purchased tax-free," Secretary of Revenue Gregory Fajt said in a statement. Most states, however, require consumers in their states to pay taxes to their home states for goods purchased out of state, including over the Internet.
The U.S. attorney's office recently provided 46 states with lists of people who had avoided paying taxes for cigarettes bought from cigoutlet.com and affordablecigs.com. Pennsylvania authorities received a list of 63 individuals who collectively owe the state $26,810 in back taxes.
"The Internet is a great resource, but some individuals use it to avoid paying Pennsylvania taxes," a practice that puts state retailers at a competitive disadvantage, Fajt said.
In other news, advocates of the Streamlined Sales Tax Project (SSTP) got a boost this week when Wisconsin's governor pushed for adoption of the plan in his fiscal 2006 budget plan.
Gov. Jim Doyle, who drew fire several weeks ago after announcing the state would not comply with a congressional order to stop collecting taxes on Internet access by 2006, championed the benefits of SSTP, which would allow states to tax cross-border online sales.
Standardizing items subject to taxation would cost about $3.1 million in fiscal 2006, according to the budget, but voluntary compliance could increase general tax revenues by $15.1 million from fiscal 2005 to fiscal 2006, the Democratic governor said. If Congress acts on SSTP, a prospect that appears unlikely at this point, Doyle projects "significant increases in states' sales tax revenue." Should that occur, he called for dedicating the extra funds to general school aid.
Doyle's budget also would allow the Revenue Department to post online the names and addresses of any taxpayers who have owed more than $25,000 for more than 90 days. The listings also would include the types and amounts of taxes owed.
A University of Tennessee professor, meanwhile, last week published a report analyzing the revenue implications of adopting SSTP in that state. Gov. Phil Bredesen said in a statement that the study "appears to underscore my concerns about the possible adverse impact these changes could have on some local governments." The Democratic governor has asked Revenue Commissioner Loren Chumley to review the report.
Maryland Announces Plan To Link Systems
As states and localities continue to grapple with making their communications systems work together, Maryland Gov. Bob Ehrlich on Monday unveiled a six-year project intended to overhaul emergency communications statewide.
Up to $30 million would be used to complete the project's first phase, which would produce a unified, multi-bandwidth, wireless network for voice communications in public safety. The plan aims to improve communication between police and emergency personnel. The second phase would focus on mobile data capacity and security.
"This is a practical, cost-effective proposal that builds on existing systems," Ehrlich, a Republican, said in a statement.
State and local agencies are expected to include funds for the upgrades in upcoming budgets. Ehrlich's fiscal 2006 budget calls for $11 million for such interoperability projects, and he also anticipates using some federal security grants for the initiative.
"By working together, counties, municipalities and state agencies [are] ensured greater public safety at minimal additional cost," he said.
The plan was conceived by a group of 20 state, county and local agencies. The group also pushed for a statewide, high-capacity wireless and fiber infrastructure, increased access to field data by "first responders" to emergencies, and complete planning for a voice and data system using the 700-megahertz band of spectrum.
In other news, Florida officials last week conducted the state's third annual "tabletop" security exercise. Agency heads and law enforcement officers joined forces to respond to a mock terrorist attack in multiple locations, coupled with a cold weather event. "Lessons learned during the 2004 hurricane season strengthened our ability to prepare for and respond to potential acts of terrorism," Republican Gov. Jeb Bush said in his e-newsletter.
Vermont Set To Join Web-Based Drug System
Vermont likely will become the latest member of the multi-state I-Save Rx program after the legislature last week approved a bill calling on Vermont's governor to join the prescription-drug program started by Illinois Gov. Rod Blagojevich.
Vermont would be the first state to receive legislative and gubernatorial support for the program, which lets participants import cheaper drugs from Canada and other countries. Though states like Kansas and Wisconsin have joined I-Save Rx, they did not receive legislative support for the effort. Lawmakers in California approved importation measures last year, but Gov. Arnold Schwarzenegger vetoed the legislation.
Vermont Gov. Jim Douglas said at a press conference that "barring any unforeseen changes," he expects to sign the bill, S. 49. He expressed disappointment, however, over the defeat of several amendments that would have encouraged "other opportunities for Vermonters to receive low-cost prescription drugs from sources here in the United States."
Importation is a "workable, short-term solution," the Republican governor said. "But for the thousands more Vermonters expecting a significant reduction in their prescription-drug and healthcare costs, [it] will never be the solution they, or my administration, are looking for. The truth is: real reform must be enacted at both the state and federal levels, and we need more substance and less symbolism."
Vermont last year sued the Food and Drug Administration after the federal agency refused to grant the state permission to test an importation program.
In other news, Connecticut Attorney General Richard Blumenthal unveiled a prescription-drug Web site that allows residents to compare prices of commonly used medicines at drugstores statewide. Blumenthal said in a statement that the effort is "an unmistakable message to pharmacies: We will monitor prices and promote competition, a potent antidote for overcharges."
Meanwhile, Rhode Island Secretary of State Matt Brown unveiled an online application that allows residents starting Monday to receive prescriptions from CanaRX. The state recently started a program that will let Canadian pharmacies register with the state if they want to sell products to Rhode Island residents.
Light Touch Urged For Power-Line Broadband
Regulators should take a light-handed approach to regulating high-speed Internet access over power lines, according to a report from the National Association of Regulatory Utility Commissioners (NARUC).
State commissioners should learn more about broadband over power lines (BPL) first, the report suggests. "Policymakers will want to monitor BPL to see whether and how it actually delivers on its many promises."
If regulation is necessary, however, North Dakota Commissioner Tony Clark said NARUC's task force "believes that it will be primarily up to the individual states to tailor appropriate roadmaps and responses ... since BPL is an integrated component of the electric grid."
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