Virginia's low cigarette tax entices smugglers

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by Arrianee LeBeau, 13News Now

WVEC.com

Posted on May 12, 2014 at 10:40 PM

Updated Thursday, May 29 at 2:52 PM

NORFOLK -- Cigarette smuggling has become big business in Virginia and now law enforcement agencies across the state and country are joining forces to crack down on the crime.

Agent Kyle Blanks with the Virginia Department of Alcoholic Beverage Control said cigarette smuggling has become more profitable than cocaine, heroin, marijuana and guns.

"Tobacco is more profitable and so they are shifting over to tobacco products," said Blanks.

Virginia has one of the lowest cigarette taxes and Blanks said people are buying cartons in Virginia and then selling them illegally in other states.

In Virginia, state tax is 30 cents per pack.  In New York, state tax is $5.85. So a pack of premium cigarettes in Virginia costs $5.55 and the same pack in New York City costs $14.

"A person would come down from New York or New Jersey or points North and sell it for double the money and it would still be at a lower price than what the states would charge them," said Blanks.

One way people are getting loads of cigarettes from Virginia to other states is through "smurfing" -- when people go from store to store buying the maximum amount of cartons -- usually five -- until they have a vehicle packed full of cigarettes.

The Bureau of Alcohol, Tobacco, Firearms and Explosives estimates that a car can carry ten cases of cigarettes with an estimated value $34,000 and a van can carry 50 cases worth about $170,000.

Even though smuggling cigarettes is as profitable as drugs like cocaine and heroin, offenders face less jail time if caught.   Legal Analyst Kevin Duffan said a Class 1 misdemeanor is usually the punishment if caught with less than 500 cartons.

"Really, what you are looking at is a maximum of 12 months in jail and a $2,500 fine. Perhaps it doesn't have that deterring effect you'd expect it to on a crime being committed," said Duffan.

Agent Blanks said the punishment isn't harsh enough and most criminals end up smuggling cigarettes over and over again.

Blanks believes the government needs to get involved and increase the penalty associated with cigarette smuggling to stop the crime.
 

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