The state of New York now has something else to brag about: the state has the highest percentage of cigarettes smuggled in illegally in the country, according to a study from the Tax Foundation. The foundation surmises that the reason for the huge flow of the illegal cigarettes is the increased excise taxes that encourage the black market trafficking. The 56.9% of illegal cigarettes are not only the highest percentage in the country, but the state also has the highest cigarette taxes in the country -$4.35 per pack. It’s even worse in New York City, where an additional $1.50 per pack is added to the price. Cigarettes in New York City can coast from $12 to $15 per pack.
The Tax Foundation defined smuggling as using counterfeit state tax stamps, stealing trucks for delivery, counterfeit versions of legitimate brands and state officials ignoring the problem.
Ranked second to New York is Arizona, with 51.5 percent of its cigarettes being smuggled in; New Mexico at 48.1 percent, Washington at 48 percent and Wisconsin at 34.6 percent follow. Cigarette taxes are growing; 30 states and the District of Columbia saw their cigarette taxes increase between 2006 and 2012.
Joseph Henchman, one of the Tax Foundation study’s authors, commented, “Public policies often have unintended consequences that outweigh their benefits. One consequence of high state cigarette tax rates has been increased smuggling as criminals procure discounted packs from low-tax states to sell in high-tax states.” One peer-reviewed study, called “Tobacco Control,” reported that 58.7% of cigarettes discovered in litter in five northeast cities were not stamped properly from the states in which they were found.
Outbound smuggling rates were highest in New Hampshire at 24%, followed by Wyoming, 22.3%; Idaho, 21.3%, Virginia, 21.2%, and Delaware, 20.9. The U.S. Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives admitted that roughly $5 billion in revenue in 2010 was lost due to the illegally smuggled cigarettes.