Company to Bring ‘Duty Free’ to Cyberspace, an online version of the stores seen in most international airports, is offering cigarettes, popular gift items and other hard-to-get products in their “Duty Free Shop.” In the meantime, international trade groups continue to debate e-commerce taxation rules.

“Operating in strict accordance with international customs laws and duty free allowances,” the Web site offers 20 to 40 percent discounts on international brands such as Givenchy watches, Cartier cigarettes and Hennessy cognac. The site also has a special form for United Nations personnel, diplomats and employees of embassies and consulates. says it has made arrangements with international companies and shipper DHL to send goods from overseas to U.S. addresses in accordance with U.S. Customs rules. Under U.S. Customs law, says, articles imported on one day by one person by mail or courier with an aggregate fair retail value of $200 (US$) or less are entitled to duty-free and tax-free entry.

“The purpose of this exemption is to minimize expense and inconvenience to the government disproportionate to the revenue that is collected. This translates into savings for consumers,” the company says.

Luxury Shop Online hopes to capitalize on the chic image of airport duty free shops by locking up exclusive Internet retailing contracts with many of its suppliers. Based on recent research showing that income levels of online shoppers are nearly 30 percent higher than households without Internet access, the company is focusing on luxury items such as leather goods, designer apparel, champagne, liquors, tobacco products, jewelry and perfume.

Unlike airport duty free shops — whose patrons carry the goods on planes — has to ship its goods. However, shipment is free within the United States. If the goods are in stock, the company promises shipping within seven days of purchase. Shoppers will be notified via e-mail of the shipment method, time of departure and expected date of delivery.

Related Tax News

Next week, several commerce groups hope to move closer to uniform taxation rules in the United States and abroad. In New York, the Advisory Commission on Electronic Commerce meets Sept. 14 and 15 to hear arguments for and against taxing Internet sales in the United States. While the commission plans to briefly discuss international tax issues as well, they are leaving the heavy lifting in that area to two other groups.

On Sept. 13th, a group of U.S. and international companies called the Global Business Dialogue on Electronic Commerce meets in Paris to draft a proposal on the issue. The next day in Geneva, the World Intellectual Property Organization’s International Conference on Electronic Commerce and Intellectual Property will add taxation to its agenda of general e-commerce topics.

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