SALEM – Thousands of Oregon smokers who’ve turned to the Internet in search of cheaper – and tax-free – cigarettes are about to get burned.

The tax bills are in the mail.

Until now, the state has asked online buyers to voluntarily pay their taxes, and officials concede that effort has been a spectacular failure.

Yet the state didn’t have many other options. Officials didn’t know who was buying cigarettes from outlets with names like CheapCigsUSA.com and avoiding Oregon’s tax of $1.18 per pack, so the only option was to nicely ask buyers to self-report and pay up on their own.

Those days are ending.

Thanks to mounting legal pressure on national and international Internet tobacco dealers, shippers and even credit card companies, the state is starting to receive customer data from a handful of the largest Internet sellers – and more companies could follow suit.

”There is no such thing as a tax-free cigarette,” said Donna Maddux, an Oregon assistant attorney general who has helped lead efforts nationally to force shippers to follow state and federal laws requiring the disclosure of tobacco-buyer names.

”The landscape is different now,” she said. ”A year ago, the sites were thumbing their nose at us. That’s changing.”

With customer information in hand, Oregon tax collectors started mailing letters in October to the buyers listed in the first batch of 25,000 invoices the state received from out-of-state sellers.

The average purchase in each of those invoices is six to eight cartons – which translates into taxes due of between $68 and $100 per invoice. Even assuming the lower figure, the first batch of 25,000 invoices translates to $1.7 million.

The largest single sale in the first batch of invoices was for 68 cartons – which means the buyer will owe $782 in taxes.

If the purchasers don’t pay up, they could face penalties and interest.

Not all of the known cigarette buyers have been contacted yet, and copies of thousands of additional invoices are arriving weekly, said Rosemary Hardin, spokeswoman at the state Department of Revenue.

The alert letters – and taxes due – are coming as a shock to people who thought they were buying anonymously and believed they didn’t need to pay the Oregon tax, she said.

”If something sounds too good to be true, it probably is,” Hardin said. ”Some people were clearly avoiding taxes, but a good portion of people legitimately believed they didn’t have to pay – and they were victimized.”

Mark Nowlin said he’s one of them.

”I thought it was legal when I was doing it, or else how could they sell them?” said Nowlin, a two-pack-a-day smoker from Redmond.

He stopped buying online after he heard the state would be coming after smokers for delinquent taxes.

”If you can’t get them cheaper, what’s the point?” he said.

He has not received any notice yet, but said he bought about 30 cartons and expects to get the bad news in the mailbox any day.

With taxes at $11.80 a carton, that means he’ll need to come up with roughly $350 – just as holiday shopping season gears up and home-heating bills are on the rise.

His name was on a list of Bend-area online customers obtained by The Bulletin through a public records request to the state Department of Revenue.

Customers will first receive a notification letter that tells them of their obligation to pay. If they don’t, the state will launch collection efforts and assess interest and penalties, said Don Jones, the director of the agency’s Tobacco Compliance Unit.

Because the letters are just now being sent, nobody knows yet how many people have responded or how much money is being sent, Jones said.

Cigarette taxes in Oregon add up to about $235 million a year, with about half of the dollars helping pay for subsidized health care.

The money also goes to smoking cessation efforts, cities and counties and to the state general fund, Hardin said.

The state estimates that 500,000 Oregonians are smokers, and that 3 percent of them are buying their cigarettes over the Internet, she said.

Buying cigarettes online is legal in Oregon, but it is illegal to possess untaxed cigarettes. Under state law, the consumer is responsible for paying the tax.

If state taxes have been paid, packs of cigarettes are marked with a wax stamp.

All states face tax evasion problem

Evasion of taxes on tobacco and even alcohol products, known as excise taxes, is a problem facing all states.

The U.S. General Accountability Office said in 2002 that it located 147 online cigarette vendors in the United States that weren’t assessing state taxes on their customers. The number of Internet sellers has grown substantially since, state officials say.

Oregon is one of the more aggressive states when it comes to targeting online dealers. Michigan is also targeting buyers for unpaid taxes.

Oregon Attorney General Hardy Myers in January sued one of the world’s largest dealers, a Belize company operating in Switzerland, and it has since shut down, Maddux said. A year ago, the state closed a company in Aloha, near Beaverton.

Authorities in Oregon and New York also helped convince credit card companies this year to stop processing online cigarette sales, she said.

Leverage against the companies comes thanks to a half-century-old federal law known as the Jenkins Act, which prohibits retailers from delivering tobacco products across state lines without reporting their sales, she said.

The extra scrutiny for cigarette deliveries is warranted in order to prevent minors from buying through mail-order, and to ensure taxes are getting paid, she said.

Yet while the state is gaining the grudging cooperation of a handful of Internet tobacco dealers, that still represents a minority of them, she said.

For instance, the Web site for discount-cigarettes-store.com says the company does ”not report any information about our consumers to any authorities. You can feel 100% safe ordering from our store!”

And at Cigoutlet.net, the home page proudly boasts: ”All 50 States – YES! Purchase reporting – NO!”

Richard Bird, a pack-a-day smoker in Bend, received a notice last month that he is being taxed for his online purchases back to the start of the year.

He thought he was saving about $10 a carton by buying on the Internet and not paying the taxes. Now, it will end up being more expensive because of the shipping costs.

”What do you do?” he said. ”It’s one of those deals where you don’t need to be getting in trouble with the government.”

Cheap cigarettes, he said, may be a thing of the past.

”It might be a good time to quit smoking.”