4
| News |

Arizona One of Top States for Cigarette Smuggling, Report Says

^
Keep New Times Free
I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Phoenix and help keep the future of New Times free.

Arizona ranks second in the U.S. for highest levels of cigarette smuggling, with more than 50 percent of cigarettes coming from out of state, according to a study.

The report from the Tax Foundation and the Mackinac Center for Public Policy on black market cigarette sales estimates that more than 51 percent of cigarettes in Arizona were purchased elsewhere originally.

Arizona ranks behind New York, where the report says trafficked cigarettes account for nearly 57 percent of the total number. Rounding out the top five states are New Mexico, Washington, and Wisconsin, although New York and Arizona are the only states where smuggled cigarettes exceed 50 percent.

The report attributes the growing black market cigarette industry to differences in each state's cigarette taxes.

"Public policies often have unintended consequences that outweigh their benefits," the report says. "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."

Arizona's $2 cigarette tax is the highest in the Southwest, and the 12th-highest in the nation. Many cigarettes are smuggled in from Mexico or surrounding states where the tax is much cheaper than Arizona's. Other border states like California, New Mexico, and Texas fall in the top eight for black market cigarette sales.

Cigarette smuggling can take many different forms. It can range from buying a pack of cigarettes in one state and transferring it to another state, to trafficking from organized crime groups. Smuggling also includes "counterfeit state tax stamps, counterfeit versions of legitimate brands, hijacked trucks, or officials turning a blind eye," the report says.

Some states have taken an active response to cigarette trafficking, like banning common carrier delivery of cigarettes, increasing law enforcement on interstates, and cracking on down on tribal reservations that sell tax-free cigarettes.

Even though authorities are taking steps to reduce cigarette smuggling, the problem still persists. States with high cigarette taxes lost about $5 billion in revenue in 2010 because of cigarette smuggling, according to the U.S. Department of Justice's Bureau of Alcohol, Tobacco, Firearms, and Explosives.

Click here to see the full report.

Follow Valley Fever on Twitter at @ValleyFeverPHX.

Keep Phoenix New Times Free... Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Phoenix with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.

 

Join the New Times community and help support independent local journalism in Phoenix.

 

Join the New Times community and help support independent local journalism in Phoenix.