By Mark Scott
Buffalo, NY – Tobacco retailers in New York who sell cigarettes over the Internet will no longer be able to get product from Philip Morris, the nation's largest tobacco company.
Attorney General Eliot Spitzer has long claimed all of the state's Internet tobacco operations are illegal. Smokers who buy cigarettes online often avoid substantial state sales taxes.
Thursday, Spitzer and his counterparts in 32 other states announced an agreement with Philip Morris to stop supplying product to those Internet tobacco retailers the states deem illegal. Spitzer spokesman Mark Violette says that would include Seneca Nation of Indians retailers who sell cigarettes online.
"We'll never be able to say with any degree of certainty that we have absolutely put these illegal entities out of business," Violette said. "But we can say we have taken decisive steps to make life very difficult for them."
Among those other steps, major credit card companies no longer process payments. And DHL and UPS have agreed to stop shipping packages of tobacco products.
"If they do want to remain in business, they will have to take extraordinary steps to find ways of accepting payments from customers. They're going to have to find new ways of getting the tobacco products to their customers," Violette said. "Now, with this landmark agreement with Philip Morris, they're going to have to find new tobacco products."
Seneca retailers say the previous steps by the state have hurt their business. They argue that a violation of their sovereignty.
Still, a New York Health Department study in November found that more than a third of New York smokers regularly avoid the state's high cigarette taxes by buying from Indian reservations, the Internet or duty-free shops.