The PACT Act Impact on SSO

 

As you may already know…On March 31, 2010 the president of the United States signed a bill into law banning the shipment & delivery through the US Mail for all cigarettes, roll your own tobacco, smokeless tobacco & snuff, etc. to all US consumers. This new law, known as the 2009 PACT Act, went into effect on June 30, 2010. 

Until June 30, 2010 delivery of tobacco products by the US Postal Service was legal and the most cost effective method of shipment; so SSO continued to use it. After June 30, 2010 other shipment delivery systems will be utilized; which means shipping fees that are included in the price of our products may increase. 

Temporary Restraining Order Granted!

Several companies in the online tobacco product sales industry (including SSO) jointly filed several legal injunctions challenging the PACT Act. In a federal court hearing a temporary restraining order was sought & granted by the court; which in effect delayed the enactment or enforcement of the PACT Act for those involved in that particular action.

The July 2, 2010 Federal Court ordered Restraining Order granted SSO the legal right to resume shipment of cigarettes & tobacco products to our Members through the US Postal Service on July 7, 2010!

In order to save money it may be wise to stock up on tobacco products prior to June 30, 2010; which is the US Postal Service cutoff date. Any purchase submitted for delivery after June 30, 2010 may include higher shipping fees. 

Online tobacco sales industry’s status as a result of the PACT Act

Some tobacco internet sales outlets completely shut down and removed their sites. Several others, including some on the reservations in NY, have posted dates to shut down completely; while others are not informing their customers of anything and will just go away when they can no longer ship through the USPS. Most we’ve been in contact with admit that the combination of the new “sales reporting” & Federal enforcement policies combined with the loss of the US Postal Service tobacco product delivery issue is just too overwhelming to endure. 

SSO’s status as a result of the PACT Act

SSO is not at risk and the USA Government cannot force this company to report anything; because the entire SSO operation is legally established outside of the United States. That is why this company was originally established this way and/or why SSO has policies in place that may seem nontraditional” or “too complex” or not the way “others online” do business.

Tobacco sales; especially with regard to enforcement of laws governing State Cigarette/Tobacco taxation issues, has always been based on “Legal Point Of Sale” location. Legal Point Of Sale is defined as the location where money for the purchase exchanges hands. Over the past 12 years, several Indian vendors got by with selling consumers un-State Taxed tobacco products by mail, phone and internet because even though they were physically located in the USA jurisdictional territory, their legal “point of sale” was on sovereign Native American soil (on a reservation) and therefore exempt from the laws of taxation and/or reporting of sales to any government for the purpose of “after sale” taxation. 

As time went on all tribes involved in any form of direct sales of tobacco to consumers located in States outside the State where the tribe was located had their sovereignty judged and tested many times. Unfortunately many of the tribes sadly discovered that they were not really sovereign at all and therefore legally under the jurisdiction of the State where they were located. Other online-mail order cigarette/tobacco vendors on reservations and off also received harsh reality checks; which caused the available sources for consumers to purchase State tax exempt tobacco products to dwindle even more. Worse yet a few, including one major vendor whose business is on the Seneca reservation in Western New York, continued to serve customers after 2007 under various web names and masked the fact that he was reporting all sales from all sites to government officials for “after sales” taxation of all purchasers. As buyers of his products got taxed by their home State, consumers naturally came to blame & not trust the entire industry. 

Knowing these facts over four years ago and also having the foresight to realize that greedy State governments would continue in their effort to either shut down a successful industry or pressure the Federal Government to intercede to tighten regulations at a federal level to destroy this industry was the catalyst for which SSO was structured. Again, this is why SSO has never accepted product orders by mail or phone… (SSO is not physically located in the USA and if we were to establish a USA phone or mail order system the all important “point of sale” would be in USA jurisdiction). This company has never accepted any traditional or USA-based form of payment for any product purchase…(The SSO Private Payment Account system is not only completely private; it is also in place to guarantee that each SSO Member’s product purchase is made (point of sale) outside of all USA Federal jurisdiction.

The only issue contained in the USA PACT Act of 2009; which went into full effect on July 1, 2010, that SSO had to deal with was the issue of the USA Federal ban on tobacco products being shipped to non-licensed entities (consumers) through the U.S. Postal Service. 

Past attempts to pass legislation (since 2003) against the U.S. Postal Service delivery of cigarettes & tobacco products to USA consumers have always failed or been blocked or been “overturned” because of “massive estimated loss of revenue” to the Postal Service. The financial status of the US Postal system is in worse shape today then ever before; yet the current U.S. president opted to ignore that fact and sign the PACT Act into law anyway. The estimated “minimum” loss of revenue because of the president’s actions is over $100,000.00 (One Hundred Thousand US Dollars) per shipping day! 

There was a combined industry effort, that includes SSO, to negotiate with other common package delivery companies whose current service territory includes the USA. Based on current USA Federal law, including the PACT Act, it is NOT illegal for these companies to deliver packages containing cigarette/tobacco products to USA consumers. One important point here though is that all major package delivery companies such as UPS, Fed-Ex, etc. do currently have internal polices in place against delivering any tobacco product to an unlicensed consumer.

Current SSO Shipping Status as of November 20, 2010

The only remaining package delivery option available to SSO was to utilize the services of one of the nationwide “Private Courier” services available. SSO is now delivering in 48 States to all zip codes! At this time SSO is the ONLY online cigarette vendor able to deliver to 48 States – all zip codes – 100% privately with zero risk to our Members of tax reporting!

We cannot deliver cigarettes to any Member in the State of Alaska or Hawaii at this time – BUT WE CAN NOW DELIVER filter tipped cigars, regular cigars, RYO tobacco, chewing tobacco & snuff, and loose pipe tobacco to all 50 States including Alaska and Hawaii!