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Internet and Mail-Order Cigar Sales Banned in Maryland

May 16, 2011 | By Gregory Mottola
Internet and Mail-Order Cigar Sales Banned in Maryland

Buying cigars over the Internet or by mail order is now against the law in Maryland. State lawmakers prohibited that form of sale for all tobacco products in a move intended to more effectively collect tobacco taxes in the state.

The law, called HB 88, went into effect on May 1. It was passed by the State House and Senate last year before being signed off by Governor Martin O'Malley. A bulletin from the Maryland comptroller's office summarized the law, defining premium cigars as part of the larger "OTP" category (Other Tobacco Products), clearly stating: "The purchase and sale of OTP by mail or over the Internet is prohibited."

The move has been controversial, and subsequent public outcry prompted Field Enforcement Division Director Jeffrey A. Kelly to release a statement on May 11 in its defense. "The intent of HB 88 was to strengthen Maryland's ability to identify and prevent widespread occurrences of tax avoidance and smuggling of other tobacco products (OTP), which include cigars, little cigars, pipe tobacco, chewing tobacco and moist snuff. For years, contraband OTP-on which the tobacco tax has not been paid but is due-entered Maryland in a variety of manners, virtually unrestricted and unregulated."

Kelly's open letter also dispels any "erroneous" notions that the new law was instated to protect Maryland's retail cigar stores.

"One reason this bill was needed is because certain retailers have purchased and sold contraband OTP illegally and the prosecution of these retailers under previous law was difficult at best."

Kelly acknowledged the "unanticipated consequences" of the law, and its affect on Internet consumers, noting the state's growing number of cigar-smokers and verbalizing the intention to keep their business within Maryland.

Cigar Aficionado tried on multiple occasions to contact some of Maryland's more prominent tobacconists, but none offered comment. However, Holt's Cigar Co., a large online and catalog business based out of Pennsylvania, did issue a very strongly worded mass email to all its customers:

"As a Maryland resident, you should be outraged," the email says, calling the law unconstitutional, anti-freedom, anti-choice and wholly un-American. "If you live in a rural area without a cigar store within reasonable traveling distance, you are basically denied access to cigars, period."

In a recent development, Delegate Michael Smigiel (R) told the Baltimore Sun (which has dubbed this new law "cigar gate") that he will use the rare fall General Assembly meeting to introduce legislation ending the state's new ban on premium cigar shipments.

The state seems to be receptive. Christine Feldmann, the Comptroller's Deputy Director, Office of Communications told Cigar Aficionado that the Comptroller's Office intends to work with the Maryland General Assembly on a legislative remedy for this issue "that would address the need for tax fairness while allowing consumers more choice. This issue is surely not over," she said.

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"Pennsylvania put a line item on the state income tax forms to report and pay state sales tax items purchased outside of PA. I wonder if the honor system will work. This is a tax collection problem, so the State of Maryland opens the flood gates to put out a camp fire. I have seen a number of Internet dealers that collect tax for other states. Computers are powerful enough to set up a system to collect sales tax. Banning products that we want to buy is not the answer. The state of Maryland is setting up the opportunity for another black market business." —June 8, 2012 22:29 PM
"The last time something like this happened we threw the tea in the water and grabbed our muskets. Hmmmm..." —June 4, 2012 09:45 AM
"I received the same letter last week Mary, for Cartons i bought 2 YRS AGO when internet sales were not illegal. When they passed the law making it illegal, they shut the website down i bought the smokes from. So i thought, no harm, no foul, right? WRONG!!! Now they are charging me $400 for the 17 cartons i bought from the website, and want it paid in 20 days! I'm making a call to the Comptroller tomorrow about this BS, and they'd better let me do it in installments! absolute CRAP!" —November 15, 2011 03:09 AM
"Hi - just rec'd a letter from the Maryland Comptroller that thru a search done by the ATF it has been identified that I bought cigarettes over the internet. Yes - I did - two cartons a year and a half ago - big deal! Now they want $47.00 in taxes - WTF! I have flown all over the world and have been allowed to carry two cartons into Germany, Australia, etc... I am a 58 yr. old woman - not a drug, gun or cigarette smuggler. I have 2 college degrees and worked hard all my life with no criminal record. AM I going to be but on American's Most Wanted if I don't send them their money. " —September 9, 2011 14:41 PM
"Is there an update to this since the last post? I will be relocating to the PAX area and want to know if I will be able to get cigars via mail." —August 24, 2011 14:10 PM
"Update: After having been told by numerous friends that they received cigars through the mail in the last few weeks, I did some sleuthing. It turns out that as of June 23, the mail order ban on cigars will not be enforced until general assembly meets up in the fall. The law was not intended to prevent premium cigar smokers from enjoying their smokes, but to keep "minors and bootleggers" from tax-free bulk purchases. So, once again our lawmakers made an over-reaching new law instead of simply enforcing the old laws forbidding bootlegging and sales to minors. Who knows how long this "will not enforce" will stay in effect, but I'm stocking up!" —August 2, 2011 17:40 PM
"This has recently happened to a friend. He purchased cigs in NC, and a few weeks later got a tax bill from MD. What is frightening is, he made the purchase out of state, yet had to pay MD taxes on it. NC got the taxes, and then so did MD? Is that even legal?" —July 28, 2011 18:39 PM
"To those who don't know, the states have passed a law to get credit card companies to cooperate with illegal purchase information. I live in Maryland and my wife purchased internet cigarettes which, unknown to us at the time, were not taxed. Our credit card company gave that info to the state. $2 per pack plus %6 sales tax was owed on 48 cartons of cigarettes. " —July 27, 2011 14:23 PM
"Always remember who is taking our freedom: the Liberal Democrats. If we continue to vote for them, we will continue to lose our freedom. " —June 4, 2011 11:00 AM
"So much for freedom of choice..! Land of the free, unless it's in a politicians personal interest to change it. " —June 3, 2011 15:56 PM
"This is outrageous, and I have contacted my state representatives and the Comptroller's office, as well as a columnist for the Baltimore Sunpapers. I am also disappointed by the retailers in this state. I receive e-mail blasts whenever there is pending legislation that raises tobacco taxes or restricts where we can smoke, but I'll be darned if I didn't fail to receive even one single e-mail from the retailers about this ban. Guess they just threw there customers under the bus on this one. While the Comptroller's office has indicated that they will work with the legislators to address this "unintended consequence', the fact remains that they will only agree to lift this ban affecting consumers IF the out-of-state retailer agrees to collect all of the necessary Maryland taxes. Well, that sucks !!! Does Maryland require that Amazon collect taxes on sales to MD residents ?? What about Omaha Steaks ?? So why are they treating cigars any differently ?? Bunch of bastards. I don't give a crap if my legistators are running against Mickey Mouse in the next election - I'll be voting for the Mouse !" —May 25, 2011 10:20 AM
"I live in Maryland and smoke good cigars everyday. Can't get them at the shops anymore, because MD's tobacco taxes don't just reach into your pocket, they rape you. What a crock of s---! I will be tracking how those I've voted for in the past vote on this issue. Not only will I not vote for them, I'll help to campaign against the. I've written my rep and the comptroller already to let them know this too. Trust me, I and my fellow cigar lovers will figure out a way around this government cluster f---. We'll get our cigars and MD be damned. When I retire, I will find another place to live. Hopefully, there will still be some truly "Free" states left to choose from. MD, the "Free" state. Hah! My a--!" —May 23, 2011 13:52 PM
"Who is John Galt?" —May 23, 2011 09:43 AM
"What happens whem someone else from another state buys cigars and ships it to Baltimore??" —May 22, 2011 06:04 AM
"Vincent & Tampa Cigar Company is still shipping to Maryland." —May 21, 2011 18:31 PM
"How will cigar shops get their inventory? Do they have to start rolling their own cigars?" —May 20, 2011 23:15 PM
"Tax avoidance, smuggling, contraband? I don't see the State of Maryland forbidding the purchase of designer hand bags, shoes, clothes, or golf clubs onlne or via mail order. For MANY years these items have been available on-line, on the street,and via flea markets. No taxes collected here from the flow of "unresticted or unregulated". Many of these items are fake (contraband). What a shame...another lost liberty!!! Feel sorry for those who can not get to a tobacco shop. I hope Maryland retailers DO NOT raise prices now that they have a captive market. Watch out Ebay...garage bake sales!" —May 20, 2011 16:22 PM
"I can't believe the crap American Federal and State government is doing in the states. I'm an American living in Japan. They have real crazy laws here. There are very few places that sell cigars here, but the ones that do are regulated by the gov't. Yes you can get Cubans here, but the gov't sets the price on each stick! It doesn't matter where you buy it, it's the same price everywhere in the country. The problem is that all the prices are fixed at 3-4 times higher than the normal price. I get around this by buying online from other countries. Then the Japanese gov't charges me a tax, about $1.75 per stick. That's way better than 4 times the sell price. I mean $24 for a Rocky Patel? Come on. I thought it would be better when I move back to the U.S., but maybe not!" —May 20, 2011 00:46 AM
"Alan the democrats are the problem.....big gov" —May 19, 2011 23:17 PM
"Once again, you are going to be forced to do something illegal today, which was ok yesterday. Drop dead lawmakers. Baltimore Maryland has a nice city stricken with drugs, gangs, and violence at an alarming rate, and they want to police you buying a cigar on the internet. They should have sand bags and fox holes on the streets and they are worried about protecting you from a cigar. All of you Maryland law makers are a failure at life and especially your job. Get a new job and get a life. Now I'm going to go order a cigar on the internet. thanks for nothing. " —May 19, 2011 22:54 PM
"Canada has specific laws very similar to this regarding tobacco and alcohol; no inter provincial shipments, been around for a long time. Mind you no one enforces it other than Revenue Canada after the fact by punishing the retailer; 'real' law enforcement have better things to do. Also, this enactment does not apply to aboriginal reservations since they are sovereign and can ship to whomever they please tax free. " —May 18, 2011 20:09 PM
"If one could bring the Founding Fathers of this Country back to life in the present day, they would be so ashamed of what this country has become. This is but one injustice borne of government reaching into the pockets of every American to feed the gloated monster it has become. Wake up people, going to the polls doesnt work, but just breeds a new corrupt office seeker to take the old ones place. If I have to become a law breaker to enjoy one of lifes simple pleasures, then so be it." —May 18, 2011 14:47 PM
"damn" —May 18, 2011 12:49 PM
"Sad news indeed. MD cigarshops will be hurt too. This means effectively banning cigars. Nothing else. What happened to capitalism and free trade? Why, instead of creating good online stores and compete, they chose the easy and dirty way. Bob dont you think if you shop online you need to get the cigars shipped to you? Unless if you mean buying online from Md shops that will never be able to supply the variety of cigars that we enjoy today. I tought such laws come out in 3rd world countries." —May 18, 2011 05:58 AM
"They do it in phases and steps but lets face it Maryland tax is 15% of wholesale, does that mean the retailers there can no longer ship to neighboring customers in NY Mwhere taxes are 75% tax? With the millions generated from the SCHIP feredal tax alone provided the funds were properly invested into eduction, no problem gladly pay, but none of the moneies raised are managed efficiently...and thats the BIG problem, goverment is a giant octupus thats out of control and needs to be fed and fed, IT SUCKS!" —May 17, 2011 15:23 PM
"Of course its not about protecting local tobacconists! When was the goverment even in the business is protecting the local tobacco sellers who many call "Merchants of Death" Really some cigars are exspenive, here in GA the local tax was just increased for all new shipments for tobacco products to my local tobacconist and he raised the price by a dollar! Thats alot considering the Schip and Sales Tax. I wont be susprised When even your discount Churchhill Reject becomes ten dollars a stick. They can fight it and may win this battle in the fall but really lets face it, the wild west of internet sales that are tax free is reaching its end. Even if the fair tax was used, it would have to tax internet sales as well. " —May 17, 2011 11:29 AM
"First Cuba now Maryland...The communist are still around!!" —May 16, 2011 23:24 PM
"This has to be not only an outrageous law but one that I would question "How will you enforce it?" Are you going to put Troopers at every UPS depot, Post office, Fed Ex depot, etc., to inspect every package that comes into Maryland? Or spot check at border place like I-81 South? This is a rediculous, realistically unenforceable law. Unlike those who say they will not buy cigars from MD retailers, I love on the Mason-Dixon line between PA and MD. My favorite place is in Cumberland, MD and I'm not going to stop getting cigars from him "just because he's a MD retailer." " —May 16, 2011 21:03 PM
"Fight them. Don't take it. Don't give up. PETER V. R. FRANCHOT, Comptroller (Democrat) Goldstein Treasury Building 80 Calvert St., Annapolis, MD 21404 - 0466 (410) 260-7801; fax: (410) 974-3808 " —May 16, 2011 20:30 PM
"I like your thinking Bob. I havent read HB88 but I understood it to outlaw the purchase and sale. Hope i'm wrong" —May 16, 2011 18:41 PM
"HB 88 made it illegal to **ship** cigars to Maryland. HB 88 **did not** make it illegal for a Maryland resident to buy cigars online" —May 16, 2011 18:31 PM
"HB 88 " —May 16, 2011 18:30 PM
"I just bought a bundle of Casa Blanca Half Jeroboams back in April--my local tobacconists don't carry them. I had no idea they would be my last until at least fall. I'll have to make the 10 I have last." —May 16, 2011 17:51 PM
"This is outrageous! Politicians and local retailers run-a-muck. The local retailers can enjoy their elimination of competition, but just wait until big brother starts flexing it's muscleon them. Can't wait until the monster you enabled decides to close one of your shops for their own reasons? Once we turn a def ear to restrictions of liberties with only our own interests in mind, we can only wait for more's not a matter of if, but when. The issue is enforcement of taxation, not shutting down the options. This is absolutely deplorable...on the part of both the government and the retailers. Brothers of the leaf, eh? I think not. I travel to MD frequently and I promise that I will not buy a cigar at a shop for any reason. I will, however, gladly smoke one of my on-line purchased stoges in protest. wake up MD cigar retailers. We know the politicians only have their self interests in mind...way to join the club. " —May 16, 2011 17:03 PM

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