SalemNews.com, Salem, MA

Local News

March 1, 2014

Panel: Mass. should get tougher on illegal tobacco

BOSTON — Massachusetts stands to lose up to $300 million in annual tax revenue from black market tobacco and should increase fines and penalties to discourage the illegal smuggling of cigarettes into the state, according to a report released yesterday.

The nine-member Illegal Tobacco Commission, formed by the Legislature last year, also said in its final report that the state should create a multi-agency task force to attack the problem.

Lawmakers raised the excise tax on cigarettes to $3.51 per pack last year, among the highest in the nation, further encouraging the illegal tobacco trade, officials said.

“The difference between Massachusetts tax rates and other states’ tax rates provides an economic opportunity to avoid Massachusetts taxes by smuggling,” the commission stated in its report.

New Hampshire, by contrast, has a cigarette excise tax of $1.78 per pack.

Acknowledging that it was difficult to pinpoint the exact cost to the state of illegal tobacco, the commission pegged the annual revenue loss at $62 million to $246 million in excise taxes, and an additional loss of $12 million to $49 million in sales taxes.

Cigarette taxes can be avoided in a number of ways, the report said, including through individual bootlegging, domestic or international smuggling, and counterfeiting.

Massachusetts law makes it illegal to transport or sell packs of cigarettes without a state stamp. One recent survey in Boston found about 20 percent of discarded cigarette packs didn’t have the stamp.

“What we learned from the testimony is that smuggling is big business, much of it fueled by organized crime and that no one agency or entity can combat tobacco smuggling on its own,” said Amy Pitter, the state’s revenue commissioner.

The report calls on the Legislature to increase the criminal and civil punishments for illegal tobacco activities, though it does not specifically say what the new fines or penalties should be.

Text Only | Photo Reprints
Local News

AP Video
Ariz. Inmate Dies 2 Hours After Execution Began Crash Kills Teen Pilot Seeking World Record LeBron James Sends Apology Treat to Neighbors Raw: Funeral for Man Who Died in NYPD Custody Migrants Back in Honduras After US Deports Israeli American Reservist Torn Over Return Raw: ISS Cargo Ship Launches in Kazakhstan Six Indicted in StubHub Hacking Scheme Former NTSB Official: FAA Ban 'prudent' EPA Gets Hip With Kardashian Tweet Bodies of MH17 Victims Arrive in the Netherlands Biden Decries Voting Restrictions in NAACP Talk Broncos Owner Steps Down Due to Alzheimer's US, UN Push Shuttle Diplomacy in Mideast Trump: DC Hotel Will Be Among World's Best Plane Crashes in Taiwan, Dozens Feared Dead Republicans Hold a Hearing on IRS Lost Emails Raw: Mourners Gather As MH17 Bodies Transported Robot Parking Valet Creates Stress-free Travel Raw: Fight Breaks Out in Ukraine Parliament
Comments Tracker