Major credit card companies will refuse to participate in Internet sales of cigarettes nationwide under a new government agreement according to wire service reports.
The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the companies and state attorneys general agreed to work together to prevent the long unchecked use of credit cards to buy cigarettes over the Internet across state lines.
The agreement is effective immediately. The card companies, which include American Express, Visa, Discover, Diners Club and the Internet financial transaction service PayPal, also agreed to take action against Internet sellers that authorities identify as violating state and federal laws regulating cigarette sales.
States lose more than $1 billion a year in tax revenue from Internet tobacco sales, said Sheree Mixell, ATF spokeswoman.
The effort is important because enforcement has been difficult, even though in many states, including New York, the Internet sale of tobacco products is illegal. The trade undercuts traditional business operators, often avoids sales tax for states and localities, and can be a way for underage consumers to buy cigarettes and chewing tobacco before they turn 18.
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