Federal "Contraband Cigarette Trafficking Act - USCode : Title 18, sec. 2341-2342

• Section 2341 defines the term contraband cigarettes means :
  

  a quantity in excess of 60,000 cigarettes, which bears no evidence of the payment of applicable State cigarette taxes in the State where such cigarettes are found, if such State requires a stamp, impression, or other indication to be placed on packages or other container

• Section 2342(a) says:
  

  It shall be unlawful for any person knowingly to ship, transport, receive, possess, sell, distribute, or purchase contraband cigarettes.

• Section 2342(b) says:
  

  It shall be unlawful for any person knowingly to make any false statement or representation with respect to the information required by this chapter to be kept in the records of any person who ships, sells, or distributes any quantity of cigarettes in excess of 60,000 in a single transaction.

• Summary: As long as we limit the sale of cigarettes to be shipped to States which requires tax stamps or other markers to less than 60,000 cigarettes (300 cartons), we can keep from violating the federal Contraband Cigarette Traficking Act .

Various State Taxation Laws

Cigarette tax laws vary from state to state. This is a significant fact with our business. This fact allows us to operate in North Carolina, paying the relatively small North Carolina taxes, and ship them to other states.

States also allow different amounts of untaxed cigarettes to be possessed by individuals without being in violation of that state's laws. These laws put the responsibility of paying these taxes on the consumer. However, it is the responsible thing to limit the number of cigarette cartons to a reasonable level.

In Connecticut, for example, the state limits an individual to possess no more than 20,000 (100 cartons) untaxed cigarettes.

To see specific state laws, go to Prairienet.org .

In order to keep JBC Smoke Shop from violating federal and state laws, we will be implementing the following procedures:

1. We will limit the sale of cigarettes to 50 cartons to any individual, unless they are being sold to residents of North Carolina where we will put no limit on the number sold.
2. We will put into place at least two "internet acceptable" procedures and protocols to prevent the sale of cigarettes and other tobacco products to those under the age of 18 years of age.
3. We will advise our customers, with a flyer inside the package as well as a bulletin posted on the web site prior to closing the sale, of the legal requirements and issues pertaining to purchasing cigarettes from outside North Carolina. This flyer and bulletin will look much like the found on the page that this link leads to: Legal Notice

Prepared By:	Matt Scofield
	September 2000