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FTA Tobacco Tax Conference

FTA Tobacco Tax Conference. Internet Enforcement Update September 2005. Oregon’s Internet Enforcement Tools. Statutes Delivery Sales Racketeering Resources DOR, DOJ, OSP personnel Plan. Internet Tobacco Retailer Attack Plan (ITRAP). Direct Attack

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FTA Tobacco Tax Conference

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  1. FTA Tobacco Tax Conference Internet Enforcement Update September 2005

  2. Oregon’s Internet Enforcement Tools • Statutes • Delivery Sales • Racketeering • Resources • DOR, DOJ, OSP personnel • Plan

  3. Internet Tobacco Retailer Attack Plan (ITRAP) • Direct Attack • Retailer identification, notice, buys • Indirect Attack • 3rd party facilitators

  4. ITRAP: Direct Attack • Identify internet tobacco retailers • Send letter re Delivery Sales laws • Follow-up letter plus contact • Undercover buys • Next steps

  5. ITRAP: Direct Attack Criminal Indictment brought: • Inexpensivesmokes.com • Otamedia S.A. Criminal Indictment drafted: • House of Oxford • Little Brown Smoke Shack Civil suit brought: • Kycigarettes.com

  6. ITRAP: Indirect Attack • Identify 3rd Party Facilitators • Advertisers • Credit Card companies • Pay Pal • Carriers • Web hosts/web-based services

  7. ITRAP: Indirect Attack • 1) Advertisers • Coupon inserts, Valpak, newspaper • Calls plus return receipt letters • 2) Credit Card companies • AG sign-on letter and meeting • Oregon-specific letter

  8. CREDIT CARD INTIATIVE The Perfect Storm • NY AG: 8/20/04 letters to CCCs • ATF: 12/7/04 letters to CCCs • NAAG: 1/7/05 letters to CCCs • Signed by 42 Attorneys General

  9. CREDIT CARD INTIATIVE • Letters stated virtually all online tobacco retailers operate illegally because: • No age verification • No Jenkins reporting • Violations of state laws prohibiting/regulating online tobacco sales • Violations of state tax laws

  10. CREDIT CARD INTIATIVE • Similar letters sent to carriers • Meeting in DC on March 17th • NAAG – over 10 states represented • ATF • Five credit card companies • Four carriers • Pay Pal

  11. CREDIT CARD INTIATIVE Credit card companies: • No illegal transactions • Internet tobacco sales presumed illegal • Due diligence Carriers: no definitive immediate action • DHL: entered into later agreement with NY Follow-up: NAAG continuing enforcement

  12. ITRAP: A New Paradigm Changes in last 12 months: • Number of internet tobacco retailers reduced • Retailers left standing: • More difficult to continue to sell • Some voluntary Jenkins compliance • OR DOR billing based on invoices • Currently 10K invoices

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