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TOBACCO BUSINESS INTERNATIONAL
MAY/JUNE 2015
E
very day, hundreds, if not
thousands,
of
commuters
emerging from the dark and
gritty New York City subway are
confronted with the reality of illegal
cigarette sales. “Marlboros, Marlboros,
Marlboros…get your Marlboros here,”
murmur the seedy-looking sellers of
black market cigarettes who lurk in train
stations, subway stops and other places
where commuters are likely to pass by.
What’s more, those individual
sellers are just the tip of the proverbial
iceberg—organized criminals have taken
cigarette trafficking a lot further, opening
small corner shops to use as fronts for
the sale of large quantities of contraband
cigarettes. In fact, experts report that
more than 60 percent of cigarettes in
New York state are illegal. In some cases,
the contraband cigarettes were stolen
from wholesalers or retailers, but most
cases involved cigarettes purchased in a
lower tax state and brought to New York,
where New York State’s $4.35 per-pack
excise tax plus the city’s $1.60 per-pack
levy creates a lucrative environment for
illegal activity.
“Penalties for trafficking in cigarettes
are weak while the incentive to smuggle
is strong,” notes New Tobacco Road, a
website dedicated to chronicling black
The Dark Side of Tax Hikes
By Jennifer Gelfand
Smuggling,
theft and thriving
illicit trade
are the side
effects of state
tax hikes.