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Smokers billed for tax they skipped
State: Fees must be paid on cigarettes bought elsewhere
Saturday,  June 7, 2008 3:14 AM
THE COLUMBUS DISPATCH
If you see smoke coming from Marjorie Kochalko, it might not be from the 83-year-old's cigarette.

The Hebron woman is doing a slow burn over a $300 bill she received from the state. It was for uncollected cigarette taxes on 24 cartons of cigarettes she purchased from out of state.

She is one of 5,469 Ohioans who received bills from the state Department of Taxation last month totaling $2.15 million in uncollected cigarette taxes. In Franklin County, 399 people were billed $143,613 on 11,489 cartons of cigarettes.

"I made a phone call. Then I would give them my credit-card number to charge it to and that would be it," Kochalko explained of her purchase from a company in New York.

The Taxation Department requested the names of Ohioans who purchased cigarettes from five vendors between July 2007 and March.

That's not fair to smokers and business owners who follow the rules and pay taxes on their cigarettes, said John Kohlstrand, a Taxation Department spokesman.

"For them, it is unfortunate to be undercut by people who are selling this product without paying the tax," Kohlstrand said.

Cigarette prices in Columbus range from about $4.50 to $5 a pack.

The current cigarette tax is $1.25 a pack or $12.50 a carton. In addition, there is a 5.5 percent state sales tax, plus county and transit-authority sales taxes ranging from 0.5 percent to 2.25 percent, depending on the location.

The state included a form with the cigarette-tax bill that individuals can use to figure out the sales tax they also owe for their purchases. They have been encouraged to pay it.

Most bills sent by the state were for less than $600, though one person received a bill for about $2,700.

So far, the state has received about $800,000 from those billed. Those who don't pay might be referred to the Ohio attorney general's office. The goal is to collect the money, an office spokeswoman said, but those who don't pay would face penalties that could include property liens.

The state does not rule out the possibility that some of the cigarettes purchased were resold. "But I think, by and large, we are talking about cartons that were purchased for individual use," Kohlstrand said.

Kochalko, who has smoked since she was 21, bought the cigarettes through the mail "because they are a heck of a lot cheaper." She said she didn't know she was obligated to pay the taxes.

"I know I'm pretty gullible. I just did not understand this," she said.

She said she intends to pay the bill.

"I am afraid not to pay for fear they are going to come and get me," Kochalko said. She said the Taxation Department said she could make monthly $100 payments instead of paying the lump sum.

Kochalko said she has learned a lesson -- sort of.

"I think I will start going to Kentucky, pay cash and smuggle them back," she said. "I know I'm cheatin' the state, but they are on this smoking bit pretty hard."

tdoulin@dispatch.com

 



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