3OYS: Man owes $4000 in taxes for cigarettes purchased years ago


by LiAna Gonzales


Posted on February 20, 2014 at 11:05 PM

Updated Thursday, Feb 20 at 11:35 PM

PHOENIX -- Michael Sadowski isn't exactly proud that he smokes, calling it an expensive and nasty habit.

"Both of my parents were smokers and, back then, everybody was," he said.

After several failed attempts to quit, Sadowski started looking for a less expensive way to smoke. He found he could buy cigarettes cheaper online than in stores.

"I did that back in 2007, 2008 and then, in 2009, they started the PACT Act, which made it illegal to sell cigarettes across state lines," he explained.

So Sadowski returned to purchasing cigarettes in stores and didn't think more about it until a couple weeks ago, when he got a package from the Arizona Department of Revenue.

"I was sick to my stomach; highly stressed," he recalled. "They said I owed $4,417 in back taxes, and that includes penalties and interest."

The cigarettes Sadowski purhcased online more than five years ago apparently never included taxes.

"Most notices of assessment or tax due from the department generally catch people by surprise," said Sean Laux, of the Arizona Department of Revenue.

Laux said just because consumers buy products online, that doesn't mean they can skip out on the taxes owed to the state

"For these individuals who are making purchases over the Internet, the law required you to fill out a form to report those so that the luxury tax was paid," he explained.

The Arizona Department of Revenue was able to obtain records from online tobacco retailers.

"Obviously, in this case, it does catch up with people," Laux said. "It's based on information that we receive and that we find, and then we try to collect the tax that's due."

Sadowski said he wasn't trying to cheat the system. He just thought he was getting a smoking deal.

"There's thousands of people just around the Phoenix area who buy stuff online every day, and I feel ... every person who bought anything online is in jeopardy if they did not pay state sales tax," he said.