February 28, 2007
The Chicago Tribune Jon Yates What’s Your Problem? Column: Smoker Fumes Over State Tax Refund Delay
By Jon Yates, Chicago Tribune
Feb. 28--At her local gas station, a carton of Misty Ultra Light Menthols costs Marna Elias $32.
At esmokes.com, it was a tad cheaper: $18.
So when a friend told Elias about the online cigarette store five years ago, she logged on and smoked up.
All seemed fine until June 27, 2005, when a bill for $1,030.78 arrived from the Illinois Department of Revenue. Under an initiative designed to recoup cigarette taxes lost through Internet sales and encourage Illinois smokers to shop for their cigarettes at local stores, the state sent out similar bills to thousands of smokers like Elias.
And it wasn't just the taxes they were paying.
About a fifth of Elias' bill--$199.73--was for penalties and interest.
A note on the bottom of her letter said if she didn't pay within 30 days, the fees and interest would increase.
Elias sent in her check immediately.
Friends later told her she wasn't required to pay the penalties and interest if she paid the taxes on time.
Upset, Elias wrote the Department of Revenue to ask for her $199.73 back. Several years later, she still hasn't gotten the state to cough up the money--so she contacted What's Your Problem?
"They're not being honest," said Elias, 62, who even wrote the state's inspector general but received a standard "we're-looking-into-it" reply.
"What a joke!" Elias said. "Must be a form letter they send to everyone who files a complaint."
The Problem Solver called the state Department of Revenue, which pulled Elias' files. On Monday, spokesman Mike Klemens said Elias should, in fact, qualify for a refund.
At the time Elias paid, Klemens said, she was required to pay all of her interest and penalties. Shortly after she paid, he said, the state modified the program as an incentive for more Internet cigarette shoppers to pay up.
Under the new program, instituted in late 2005, the buyers would have their interest and penalties waived if they paid within 30 days.
Klemens said Elias should not be penalized for paying on time before the new rules went into effect. On Monday, he sent her an application to appeal the $199.73 with the department's board of appeals.
Once the board receives her application, Elias said, she should get her refund within weeks. Elias, who smokes about a pack a day, was elated. She plans to fill out the application and return it immediately.
Others in her situation can find the application by logging on at www.revenue.state.il.us.
Once on the site, click on the "Questions" link on the main page. When the link comes up, type in "Board of Appeals" in the search area. Click the first link that comes up, titled "What is the Board of Appeals," then click "Form BOA-1, Board of Appeals Petition," to access the appeal form.
Smokers who buy cigarettes over the Internet can avoid getting requests for back taxes altogether by filling out forms on the department's Web site to pay the taxes immediately after purchasing their smokes, Klemens said.
Over the last four years, his department has collected more than $4 million from Illinois smokers who bought their cigarettes over the Internet, he said.
"Our belief is that once someone gets a bill like this, they'll start going down to their local store and buying their cigarettes," Klemens said. "That's the intent of the program, to protect the tax base and protect Illinois retailers."
It certainly worked on Elias. She paid her $1,030.78, and hopes to get nearly $200 in penalties and interest back. But she has given up buying cigarettes over the Internet.
Even if the cigarettes are cheaper at esmokes.com, she said, it's not worth it.
"The matter of the paperwork," Elias said. In the end, "it would end up costing the same as I would pay here."
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Marna Elias says the state hasn't refunded her almost $200 in penalties and interest after she paid a tax bill for cigarettes she bought over the Internet.
Like a puff of smoke, the problem soon should disappear.
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