Internet Crime

August 21, 2005 10:34 AM

Oregon man gets jailtime for website. There's a lot you can do on the internet, but "cheating" the state out of tax revenue is a crime. "Washington County Circuit Judge Michael McElligott found Eric Ivan Guthrie not guilty of racketeering and computer crime for selling cigarettes through the now-defunct Inexpensivesmokes.com Web site. However, McElligott found Guthrie guilty of doing business as a cigarette distributor without a license, two counts of unlawful distribution of cigarettes for not affixing the packs with Oregon revenue stamps and five counts of failing to comply with tobacco sale requirements for not verifying that buyers were at least 18 years old. Oregon Department of Revenue has the names and sales receipts for 7,500 people who bought cigarettes online without paying the state tax of $1.18 a pack. A small percentage have been sent bills, and officials are determining how many others will be asked to pay the state". This seems wrong.
posted by Mack Twain (37 comments total)

Well I'm sure they'll recoup all their legal fees through the collection of that $1.18 tax from a handful of people. So this whole legal adventure will certainly pay for itself!
posted by wakko at 10:37 AM on August 21, 2005

Am I missing something? He used his web site instead of the phone or a storefront to take orders. Why should that make him exempt from state laws?
posted by selfmedicating at 10:39 AM on August 21, 2005

If you read the article to the end, you'll see that he was sentenced to jail time not for the tobacco-related crimes, but for being a felon in possession of a handgun. The cigarette business only got him probation.
posted by Mitrovarr at 10:42 AM on August 21, 2005

This seems wrong.

Why?
Do you have a problem with the idea of taxes itself?
If no, don't you think that people evading taxes are criminals (who are ultimately cheating you and me) and should be punished?

So this whole legal adventure will certainly pay for itself!

I think that's beside the point. Prosecuting criminals is usually not done to "pay for itself". In this case, it seems that there might be a deterrent effect, which btw in the long run might actually prevent more tax evasion using the same scheme.
posted by sour cream at 10:45 AM on August 21, 2005

This post seems wrong.
posted by fixedgear at 10:46 AM on August 21, 2005

Your first sentence is kind of silly. He didn't get jailtime for anything related to the Web. The jail sentence came from an illegal handgun charge found during a search of his home. He got 18 months probation on the other charges, but the racketeering (which seemed like a bit of a stretch) and, er, "computer crime" charges didn't stick. I'm not sure what exactly you're objecting to here, Mack.
posted by mediareport at 10:47 AM on August 21, 2005

This seems wrong.

And the awards for getting as close as possible to ending a post without editorializing while still editorializing, and for least amount of editorializing while still editorializing go to Mack Twain!
posted by odinsdream at 10:49 AM on August 21, 2005

I didn't RTFA, but I think that anyone who sells cigarettes to minors should at least lose the ability to sell cigarettes.

Of course, I am overwhelmed by the sense of self-rightousness that comes with having quit.

At the very least, the guy should pay taxes like everyone else.
posted by SteveTheRed at 10:50 AM on August 21, 2005

Send him to the chair!
posted by VulcanMike at 10:54 AM on August 21, 2005

This seems right.
posted by HuronBob at 11:00 AM on August 21, 2005

This seems the worst of NewsFilter.
posted by mischief at 11:01 AM on August 21, 2005

How long before I have to pay state/county/city sales tax on things I buy/sell on ebay?
posted by Balisong at 11:07 AM on August 21, 2005

In related news, if you live in Utah and bought cigarettes online, the Utah State Tax Commission will find you.
posted by mr_crash_davis at 11:07 AM on August 21, 2005

You mean that you guys don't?
posted by dabitch at 11:09 AM on August 21, 2005

What seems wrong is that you didn't bother to read your article before you posted it.
posted by klangklangston at 11:10 AM on August 21, 2005

In a way he did get jail time for the web site; if he had not sold cigarettes online his home would not have been searched and the gun wouldn't have been found and he would not have received jail time for the gun.

So the submitter is right.
posted by punishinglemur at 11:31 AM on August 21, 2005

...I am overwhelmed by the sense of self-rightousness that comes with having quit...

I want some of that. I'll give you these cigarettes for it.
posted by 517 at 11:34 AM on August 21, 2005

In a way he did get jail time for the web site; if he had not sold cigarettes online his home would not have been searched and the gun wouldn't have been found and he would not have received jail time for the gun.

So the submitter is right.

In a way, he did get jail time for being born, after all, had he not been born....
posted by odinsdream at 11:37 AM on August 21, 2005

Mack Twain: You've have some interesting posts in the past, so I don't mean to discourage you from posting... but with all due respect, could you please RTFA before putting it in an inflammatory FPP? This is at least the second time you've done it.
posted by VulcanMike at 11:42 AM on August 21, 2005

Posting a snarky comment about the FPP: Arguably lame.

Posting a snarky comment about the FPP with a ridiculous grammatical error in the first sentence: Priceless.
posted by VulcanMike at 11:43 AM on August 21, 2005

Watch this set a precedent for sales tax on internet sales.
posted by 517 at 11:50 AM on August 21, 2005

What I thought was wrong was that this guy just had a website that hooked buyers up with sellers in Europe. It's not like he had a warehouse full of smokes and was selling them over the net or in person. I don't see how he was a "distributer", but maybe I'm wrong.
posted by Mack Twain at 11:55 AM on August 21, 2005

Don't do the crime if you can't do the time.
posted by caddis at 11:59 AM on August 21, 2005

Do you see, Mack, how your post misrepresented the article? Don't we at least deserve a "I'll be more careful in the future" from you?
posted by mediareport at 12:02 PM on August 21, 2005

Sorry friends, I see I really screwed this up! While I believe the jailtime is a result of the tax investigation, I realize that's just my opinion.
I'll be more careful in the future.
posted by Mack Twain at 1:12 PM on August 21, 2005

Prosecuting criminals is usually not done to "pay for itself".

If enforcing a law doesn't create benefits greater than the cost of enforcement, a hard look should be taken at whether we actually need the law. The classic example being Prohibition.

I'm not saying that's the case here, just pointing out that yes, prosecuting criminals is done to pay for itself. The bulk of the benefits are almost never direct or monetary, but they are there and do (assuming good laws) pay for themselves.
posted by ulami at 2:27 PM on August 21, 2005

Taxes are charged to those who buy things on e-Bay.
Sellers whose buyers are from the same state must pay
sales tax. I think this applies only to those sellers with
business licenses such as e-Bay Store owners.
posted by bat at 2:32 PM on August 21, 2005

I cannot see the fairness in internet sales evading taxes. Why should not the sale include the tax of the state and city to which the product is shipped? And let the seller be responsible for submitting said tax to the proper state. Brick and mortar stores collect tax, mail order companies collect tax. Why should one class of vendors be exempt?

Of course, those of us in Oregon do not have one of those regressive sales taxes.
posted by Cranberry at 2:41 PM on August 21, 2005

On the other hand, there's little outrage over lost sales tax from selling anything other than cigarettes on the internets. Just sayin'
posted by Rothko at 3:15 PM on August 21, 2005

This is not about the sales tax, a minor pox. No, this is about the cigarette tax which is really stupendous in most states. Everyone avoids the sales tax and states look the other way, kind of. However, if you are importing cigarettes into a state without paying the tax, UH OH. Since this is mostly a mob activity do not be surprised to find yourself in the pokey.
posted by caddis at 4:01 PM on August 21, 2005

The irony: he'll be traded amongst the other inmates. For cigarettes. Terrible fate being the butt of a cruel joke.
posted by hal9k at 4:30 PM on August 21, 2005

i don't personally buy anything over the internet. it seems to me, from what i read, you can buy lots of stuff over the internet without paying taxes. when it's cigarettes everyone has a cat. can't you buy wine/alcohol over the internet to avoid taxes? i can drive to a bordering state and buy cigs and booze with much lower taxes. any difference? of course, gas tax is another story.
posted by brandz at 4:51 PM on August 21, 2005

"Terrible fate being the butt of a cruel joke."

What a drag that you would post such a pun to the 'filter. You ought to be tarred and feathered.
posted by mr_crash_davis at 5:28 PM on August 21, 2005

This seems wrong.

No, it doesn't.
posted by Doohickie at 7:53 PM on August 21, 2005

Isn't it funny how anyone who's using a computer is automatically the good guy?
posted by obvious at 7:28 AM on August 22, 2005

Not here, they aren't.
posted by grouse at 9:18 AM on August 22, 2005

Illinois is also seeking back taxes from people who bought cigarettes on the Internet.
posted by SisterHavana at 9:47 AM on August 22, 2005