Despite Law, Cigarettes Sold Cheap and Tax-Free Online

Many tobacco control efforts focus on raising prices and taxes as a way to discourage smoking for public health benefits. But previous research has shown that these efforts can be undermined by online tobacco vendors, who often advertise selling cigarettes “tax-free” and at prices lower than can be found in brick-and-mortar retail outlets.

In this study, researchers documented the prices and claims advertised by the 200 most popular Internet-based cigarette vendors to identify key trends. Websites were analyzed in 2009, 2010 and 2011 to track changes over time and assess implications for public health and tobacco control.

The price of a single carton of Marlboro cigarettes was used as the benchmark for price differences among retailers.

Key Findings

The average price of one carton of Marlboro cigarettes in 2011 was $35.27 online, compared to $52.73 in U.S. grocery stores, suggesting that buying cigarettes online can offer substantial cost savings for consumers. Based on these findings, a pack-a-day smoker living in an area with high cigarette prices could save up to $1508 per year buying cigarettes online.
Online vendors based internationally were six times as likely to claim tax-free status as vendors based in the United States. Vendors based in multiple countries were nearly five times as likely to promote tax-free sales as vendors based only in the United States.
Overall, more vendors claimed tax-free status in 2011 than in 2009, suggesting a trend toward greater emphasis on tax-free sales among online retailers.

The Prevent All Cigarette Trafficking Act of 2009 (the PACT Act) is intended to ensure the collection of appropriate excise taxes for tobacco and requires that all cigarettes shipped to the United States be subject to state and local excise taxes for the U.S. address to which they are delivered. This study demonstrates that better enforcement is needed to address tax-free cigarette sales among online cigarette vendors, especially those based abroad.

Citation: Hall MG, Williams RS, Gammon DG, Ribisl KM. Internet cigarette vendors make tax-free claims and sell cigarettes cheaper than retail outlets. Tob. Control. 2015 Oct 21 [Epub ahead of print] doi: 10.1136/tobaccocontrol-2015-052359.