Other News...
sponsored by Richardson Repair

House moves to stop black market sales of tobacco

Send a link to a friend

[September 11, 2008]  WASHINGTON (AP) -- The House on Wednesday moved to crack down on the contraband cigarette sales that drain federal, state and local treasuries of billions while providing a lucrative source of income for criminals.

InsuranceThe bill, passed 379-12, would impose shipping and record-keeping requirements on those selling cigarettes and smokeless tobacco over the phone or through the mail or Internet, and make failure to comply with state tax laws a felony. It is currently a misdemeanor.

It would also require Internet and other remote sellers to verify the age and identity of purchasers to cut down on sales to minors. Delivery of cigarettes and smokeless tobacco through the U.S. Postal Service would be ended.

"We can really make sure states get the revenues. We can make sure that the black market in tobacco is eliminated and frankly we can make sure that the ATF has the tools they need to crack down on this," said Rep. Anthony Weiner, D-N.Y., sponsor of the legislation.

Illegal trafficking is an outgrowth of the wide variance in state excise tax rates on cigarettes that encourages smuggling from states with low taxes to states with high taxes. As of the beginning of this year, tax rates ranged from seven cents a pack in South Carolina to $2.57 in New Jersey. Weiner said that in New York City, which has a city tax on top of the state tax, the average price per pack may be around $10.

Auto Parts

He also cited Government Accountability Office warnings that cigarette smuggling could become a source of revenue for terrorist groups.

"Illegal trafficking in cigarettes can generate enormous profits and is purportedly a multibillion dollar a year enterprise," the GAO said in a 2004 report. "Cigarette smuggling results in lost tax revenues, undermines government health policy objectives, can attract sophisticated and organized criminal groups, and could be a source of funding for terrorists."

[to top of second column]


Weiner's office pointed to a 2002 case where a federal jury in North Carolina found a man guilty of smuggling $7.9 million worth of cigarettes from North Carolina to Michigan. The man and his brother were accused of steering profits from their operation to Hezbollah.

The legislation also requires cigarette sellers to keep their records for four years. The Justice Department is authorized to compile a list of delivery sellers who fail to comply with these requirements or state tax laws. The Bureau of Alcohol, Tobacco, Firearms and Explosives is given new authority to inspect the records and inventories of cigarette shippers.

Sen. Herbert Kohl, D-Wis., has introduced a similar bill in the Senate.


The bill is H.R. 4081.


On the Net:

Congressional bill text: http://thomas.loc.gov/

[Associated Press; By JIM ABRAMS]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


< Top Stories index

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor