As if last week's update on the scheme to build an elaborate network to record and tax consumer purchases made online wasn't enough, some tax-hungry bureaucrats are already chasing down and subpoenaing records about cigarette consumers who shop online. And it appears at least one delivery company is turning over that consumer information to the tax hawks despite pledging not to.

At issue are excise taxes imposed on cigarettes by the state of Massachusetts. A few years ago, Massachusetts raised the excise tax on a pack of cigarettes from 76 cents to $1.51. Add in sales taxes and the price hike to cover the settlements in the tobacco lawsuits of the 90s, and R.J. Reynolds figures the average smoker buying cigarettes in Mass. is paying $666 a year to the state coffers. So it's no wonder a number of smokers have been looking to buy their cigarettes elsewhere.

And it is unfortunately not much of a surprise that the Massachusetts Department of Revenue has been stalking these bargain-hunters. Like the "use tax" imposed by many states on its residents who dare buy anything from another state or country, the Massachusetts code requires that anyone buying cigarettes without a Massachusetts excise tax stamp to file forms declaring those purchases (in this case quarterly) and send in a check for the amount 'owed.' And the state legislature has passed a law directing the Revenue Department to pursue vigorously the dangerous smoking scofflaws.

To that end, the Department has been sending out invoices to cigarette consumers demanding payment of taxes, interest, and penalties; and threatening more fines -- and even imprisonment -- if they don't pay up fast.

What is particularly vexing to privacy-minded consumers is that they don't know where the information about their shopping habits is coming from. The state won't say. Cigarette vendors such as DirtCheapCigs.com say it's not them. And United Parcel Service, UPS, had said in August that "We are not a tax collector. We are a delivery service provider." But now UPS is waffling. And DirtCheapCigs.com has discovered UPS spreadsheets in the course of legal actions concerning taxes in two other states.

Consumers deserve to know who is turning over their data to government agencies. If UPS is turning over such info despite telling their customers otherwise, that is poor privacy policy performance. Customers and businesses who use UPS should be able to look at this kind of info and judge whether or not UPS is conforming to their stated privacy policies. And citizens have a right to know what kind of consumer data their governments are seizing.

Legislators and bureaucrats trampling consumer privacy in the quest for more money and power are certainly Privacy Villains. And so are those businesses who aren't being straight with consumers about their role in handing over sensitive information.

government surveillance

medical privacy

financial privacy

online privacy

News | Press Releases | Online Privacy Tools | Privacy Principles | Experts | Links
About NCC | About Consumer Alert | Contact Us | NCC Privacy Home