Problem/Objective: To assess New York State tobacco product retailers' knowledge of and attitudes towards the sale of untaxed and lower taxed cigarette sales by Internet, on Indian reservations, and in neighboring states.

Methods: A random cross-sectional telephone survey was administered to licensed cigarette retailers within New York State who originally participated in a retail advertising assessment study in 2004. These retailers (n=674) completed a phone survey (37% response rate) between September 2005 and January 2006 where they were asked about their attitudes and beliefs concerning low and untaxed cigarette sales from the Internet, on Indian Reservations, and in other states.

Results: The majority of surveyed retailers reported being aware of the availability of untaxed and lower taxed cigarettes by Internet (86%), on Indian reservations (91%), and in neighboring states (86%). Sixty-nine percent and 51% of retailers reported that their establishment loses revenue due to the sale of cigarettes over the internet and in other states, respectively. Likewise, 77% of retailers reported that their establishment loses cigarette sales to retailers on reservations, with the proportion of retailers with this belief being significantly higher among those within a ten mile radius of a reservation. In addition, a statistically significant proportion of retailers were found to be in favor of a statewide policy to collect taxes on cigarette sales through the internet (71%) and from non-Indian consumers on Indian reservations (83%).

Conclusions: Most cigarette retailers report that the availability of low and untaxed cigarettes is harming their business and support efforts to obtain these unpaid taxes.