Tuesday, July 7, 2015

Modern Day Smuggling is Taking Over the New York State Cigarette Industry

Imagine that high tax rates equal high rates of smuggling.

Jonathan Nelson informs:
New York’s cigarette taxes are the highest in the nation, at $4.35 per pack. Some New Yorkers naturally will seek to avoid cigarette excise taxes, which raise the average price of a pack of cigarettes from about $8.50 to $12.85, even at the cost of breaking the law. People are tempted to buy cigarettes in a low-tax state such as North Carolina and sell them in New York.
The black market created by cigarette taxes is very real. A report from Scott Drenkard of the Tax Foundation found a positive relationship between cigarette smuggling into a state and the state’s cigarette excise tax rate. High tax rates produce an incentive for smugglers to purchase cigarettes in a low-tax state, and then sell them for a profit in a high-tax state.
New York State has the highest smuggling rate (58 percent of all consumption is smuggled) in the country. It should not be a surprise that over half of the cigarettes consumed in New York are smuggled from outside the state when its cigarette tax is over $1 per pack higher than neighboring states. The cigarette tax in New York may lower consumption, but it encourages smuggling.


  1. In New York you pay the ciggie tax or die.

  2. In New York you pay the ciggies tax or a cop sits on your neck and kills you