South Carolina a magnet for cigarette black market 3/23/2009 11:45 PM Staff reports South Carolina's low cigarette tax makes it a magnet for black market runners.
Since 1977, the state's tax has stayed at 7 cents per pack. That's 10 cents less than the next lowest state (Missouri) and $2.68 per pack less than the state with the highest tax (New York). Considering that the average tax nationwide is $1.21, buying cigarettes in South Carolina and trucking them to another state can be very lucrative.
There are two ways smugglers operate, said Earl Woodham, spokesman for the federal Bureau of Alcohol, Tobacco and Firearms office in North and South Carolina.
Smugglers buy lots of cigarettes at discount stores, usually in North or South Carolina which do not place stamps on packs making them untraceable. They take the cigarettes to places like New York City where smokers not only pay $2.75 per pack in taxes, but an additional $1.50 in taxes from the city for a total of $4.25 per pack. And that doesn't include the federal taxes and the cost of the cigarettes.
The other way smugglers operate is to steal trailer loads of cigarettes and take them to higher taxing states, he said. There are estimates that smugglers can make a $1 million from a tractor trailer load of stolen cigarettes.
Woodham said the smuggling problems won't change even if South Carolina adds a proposed 50 cent per pack tax. The difference is still so great that the state would need to raise it to $4 per pack to stop the black market trade to New York.
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Posted by: Mr. Tobacco Plant On: Tuesday, March 24, 2009 10:38 AM
Comment Title: The Price You pay!!!
Maybe it's not black market of cigarettes, the states have put such a ridiculous tax on cigarettes you almost have to work the system the way it is mapped out. All these states with high cigarette taxes (Washington & New York) don't even use any of the cigarette taxes on what the funds are promised for in the first place. That is including the MSA tax that the politicians use for any use necessary. Healthcare, i thought that was supposed to be paid by the MSA state-by-state. Now we have a $6.20 a carton raise on the federal tax, starting april 1st and guess what? It's for healthcare! Just Like Obama said "your check is in the mail on April 1st" But where is the money coming from mr politicians because you just ruined your biggest money maker by increasing the federal tax. Thank You South Carolina for being such an honest state, the state cigarette tax should never exceed the federal tax anyway. We have states like New Yor and Washington State to thank for the Federal Tax Hike.
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