Report: 57% of Cigarettes Sold in New York Are Smuggled

[The Straight Story]

Report details the lucrative criminal enterprise of buying cigarettes in low tax states to sell on the black market where taxes are higher

A majority of the cigarettes for sale in New York are illegally smuggled into the state, according to a report out Wednesday from the conservative research group the Tax Foundation.

According to the report, 56.9% of the cigarettes sold in New York—the highest importer of smuggled cigarettes—originated from out of state. Since 2006, cigarette smuggling in the state has risen sharply, by 59%, in tandem with a massive hike in cigarette taxes of 190%. New York state now has the highest cigarette taxes in the country, at $4.35 a pack. Residents of NYC must also pay an extra $1.50 per pack.

Cigarette taxes rose in 30 states and the District of Columbia between 2006 and 2012. Hiking tobacco taxes has been shown to make a dent in smoking rates—in particular among younger smokers—but also creates sometimes sharp state-to-state price differentials that incentivize illegal smuggling.

http://time.com/30786/57-of-cigarettes-sold-in-new-york-are-smuggled/

[NaturalHigh]

1. No surprise there.

Aren't a lot of Canadian cigarettes smuggled in, too?

[Spider Jerusalem]

2. "Report from...conservative Tax Foundation"

taking this with a grain of salt; what's this estimate based on, exactly? Seizures of untaxed cigarettes? Random sampling of cigarettes for sale in various locations? I'd need to see some solid basis for this figure before accepting it, especially considering the bias and obvious agenda of the source.

[pipoman]

3. Prohibition through taxation is as dangerous

As prohibition by statute...

[TheKentuckian]

4. Some folks aren't going to be happy until the black market thrives and gangs have something to kill

over.

[meow2u3]

8. You nailed it

Some of those overzealous nicotine prohibitionists want to use the same tactic to tax e-cigs out of existence--and vaping carries only 1% of the risk of smoking.

[newthinking]

10. Cigarrettes are often used for money laundering. Tobacco companies actually have made contracts with

the mafia. At least in the past. Now much of the mafia have a foot in the corporate world, but I would not be surprised if they are still using cigarettes to move money around.

[Historic NY]

11. That is why NY is agressive on un-taxed smokes....

most are coming in from Virginia, Georgia, Louisiana, Alabama, Mississippi, and Tennessee. They have gone after every scheme from the Indian reservations using out of state straw purchase and deliveries, buyers clubs, to FED EX and others picking up and delivering untaxed cigarettes.

[raccoon]

5. I would have expected most of those smuggled cigarettes came from SC.

I thought SC had about the lowest tax on cigarettes, but I just did some googling, and found out SC doesn't.

SC is #42 (from highest to lowest).

Source: http://www.taxadmin.org/fta/rate/cigarette.pdf

[jmowreader]

12. I think I know exactly where they're from

Almost all the cheap cigarettes in NYC come from one of two stores: D&R Tobacco in Kenly, NC, and JR Cigars in Selma, NC. They're a one-day drive from NYC and they give discounts for bulk buys. Plus their parking lots are always full of out-of-state plates. This is a popular stop for tourists, because it's in the "halfway between NYC and Orlando" zone, but very few tourists buy 500 cartons at a time.

If the feds want to cut down this traffick, they need only follow bulk buys out of these stores.

[Prophet 451]

6. Doesn't surprise me

I'd imagine the rates are similar here (UK). Where taxes are high, a certain percentage will always seek to evade those taxes (no, I'm not arguing for getting rid of the taxes). What I do wonder is how many people are AWARE they're smoking smuggled cigs? I wouldn't be at all surprised if a store owner brought smuggled smokes, sold them at full price and pocketed the difference.

[linuxman]

7. No shit, huh?

I figured it would be higher than that.

[Mariana]

9. I'm surprised anyone even buys ready-made cigarettes.

Most of my friends who smoke make their own with pipe tobacco, which is very inexpensive.

Some of them have switched to vaping.