Lighting Up

Copyright 2004, Traffic World, Inc.

There''s not much debate anymore about the dramatic impact of cigarette smoking on health. But the news at this end is the ill effect of cigarette tax policy on the cargo delivery business.

There are moves at the national and state levels to pull together the country''s fractured approach to cigarette taxes with a more unified approach. The idea is to help states such as Massachusetts collect excise taxes they impose on cigarettes but which consumers avoid by buying the smokes in states that have low or no taxes and then transport them home.

The problem has grown as excise taxes on cigarettes have grown and smokers have gone to Internet operators such as cheap-cigarettes.com for the goods. As one Internet come-on puts it: "Tired of constantly rising and irritating cigarette prices? Wouldn''t you rather have them delivered charge-free, tax-free and hassle-free right to your door?"

Trouble is, they''re not tax-free and legislation in Congress would make the companies that deliver the goods responsible for collecting the excise taxes that the states impose on cigarettes.

For any company that delivers goods to consumers, the prospect of collecting taxes at the door poses ominous questions. More significantly, it''s part of a larger emerging question over what responsibility delivery companies carry with the goods inside their boxes.

For instance, the Supreme Court is considering Internet sales of wine shipments. Is a delivery driver the legal equivalent of a bartender who must check the identification of customers? Does a delivery driver carrying a drug shipment from Canada - certainly a growing field - to a home in Minneapolis check to see if the recipient has a prescription?

And now, are delivery drivers among those who would be held responsible for state excise taxes under versions of enforcement bills in the House and Senate? Those bills say anyone involved in the distribution of the goods could be responsible.

Express companies are horrified at the prospect, and just about anyone in transportation also should object since the question goes to the heart of the fundamental role of the cargo delivery company in business transactions.

"We are transportation companies," says FedEx spokeswoman Kristin Krause. "We''ll work with regulatory agencies and law enforcement agencies for the best solution. But we can''t do their job."

There''s no doubt there are serious problems with law enforcement and tax collections here. It''s a problem with even deeper consequences. Terrorists may have illicitly trafficked in cigarettes but delivery companies are not the solution.

Unlike convenience stores that sell cigarettes over the counter, delivery companies are not parties to the underlying transactions that trigger taxes. They carry and deliver goods and those services are, in fact, taxed.

If Internet retailers are using the ubiquity of technology and express delivery to flout the law, then the Commonwealth of Virginia should work with other states to ensure that the vibrant and mutually beneficial world of interstate commerce is also legal commerce.

That does not mean that delivery companies shouldn''t carry some responsibility for the goods that they carry. Express companies have worked with law enforcement agencies in investigating narcotics shipments and one operator even blew the whistle on an illicit cash payment to a prospective college athlete a few years ago.

With deliveries such as wine or guns, companies can insist that an adult only can sign for the goods. With deliveries of pharmaceuticals, they can provide the paper trail for investigators to pursue.

But relying on cargo companies as tax collectors takes the last mile of delivery a step too far.





For the full story: Log In, Register for Free or Subscribe