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New York State Attorney General Andrew M. Cuomo Wednesday announced an agreement in which Creative Cash Flow Solutions, Inc. will stop providing electronic payment processing services to online tobacco retailers, which illegally sell cigarettes over the internet. When the unlawful nature of online tobacco sales was brought to their attention, Long Island-based CCFS immediately agreed to cease providing their services.


As a result of CCFS’s services, online tobacco retailers were able to process their illegal tobacco sales without credit cards. CCFS’s assistance allowed the retailers to receive customer check information via the internet, telephone, or facsimile to enable a sales transaction. An investigation by the Attorney General determined that CCFS serviced at least ten online tobacco retailers. Several were located in New York State, and two were among the ten largest online tobacco retailers used by consumers throughout the United States.


This agreement is the first of its kind in the country. It furthers the successful efforts of New York and the other states that are part of the tobacco Master Settlement Agreement, a public health agreement which, among other goals, aims to stop the flow of cheap cigarettes to young people. Through the states’ efforts, leading credit card companies have already agreed to cease allowing their cards to be used to facilitate these unlawful sales, and several major shippers have refused to deliver cigarettes purchased online. Cutting down on electronic funds transfers, such as those facilitated by CCFS, will make it more difficult for these retailers to continue selling.


Online tobacco retailers operate illegally in a number of ways, including failing to file required monthly sales reports with the tax administrator of the states into which they are shipping cigarettes; using interstate wire and mail systems to defraud state governments of excise tax revenues; and shipping over 10,000 cigarettes per month without any state tax excise stamp. These same practices also violate New York State tax laws, which prohibit attempts to “evade or defeat a tax,” and New York State public health laws, which prohibit direct shipment of cigarettes to individual consumers in New York State, as well as similar laws of the states into which they sell.


Bill would hike Indiana cigarettes by 44 cents per pack


Indiana’s cigarette tax would go up by 44 cents per pack and the revenue would be used to provide health care for more than 130,000 uninsured adults under a plan approved by lawmakers Sunday.


The House voted 70-29 and the Senate 37-13 for the bill, which next heads to Gov. Mitch Daniels for consideration. Daniels has pushed for the health plan and cigarette tax hike.


Under the bill, the state’s current cigarette tax of 55.5 cents would be raised to 99.5 cents per pack. Supporters said raising the tax by 44 cents would spur about 23,000 adults to quit smoking.


Sen. Patricia Miller, R-Indianapolis, said her father and brother both died of lung cancer from smoking. She urged smokers to quit.


“Please don’t pay the cigarette tax,” she said. “But more importantly Zyn pouches, please don’t pay the personal price of smoking cigarettes.”


Critics said the bill was taxing one group of people to pay for a health care plan that would benefit many across the state.


“A cigarette tax is a regressive tax on the working poor,” said Sen. Mike Delph, R-Carmel.


The cigarette tax increase would bring the state an extra $200 million a year—money that would help fund several health programs.


Most of the tax increase would be directed toward a plan to provide health care coverage for about 132,000 adults. The plan would be available to people without employer-provided health insurance and who earn less than double the federal poverty level. Beneficiaries would get free preventive care each year, as well as insurance coverage and personal health accounts used for doctor visits and prescriptions.


Cigarette tax money also would be spent on vaccinations for children and smoking prevention and cessation programs.


The proposal also includes other health care initiatives, including a program that would permit certain employers to participate in plans that allow employees to pay for health care using pre-tax money. The bill also expands eligibility for Medicaid for pregnant women and for the Children’s Health Insurance Program.


State health commissioner Judy Monroe said increasing the cigarette tax by 44 cents per pack would spur about 23,000 adults to quit smoking. She said the health care plan would reduce the number of people who wait too long to seek medical help because they do not have insurance.


“It will break down those barriers,” she said.