Smugglers Crossing State Lines To Avoid Sales Taxes Cost States Billions

BALTIMORE (WJZ)– Alcohol and tobacco taxes make millions for Maryland and the State wants to keep it that way.

The comptrollers office rolled out tens of thousands of dollars worth of goods confiscated from smugglers attempting to avoid sales tax Thursday and Maryland is one of the states that’s toughest on these crimes.

The person who bought a pack of cigarettes in Virginia paid a sales tax of 30 cents.

The cigarette tax in Maryland is $2 a pack.

Multiply that difference by hundreds of cartons translating to tens of thousands of dollars for smugglers bringing them across state lines.

“Drive to Virginia, we watch them load up their vehicle with the cigarettes, it’s usually an unassuming vehicle. A minivan with seats removed. Put 30 or 40 cases into it and we follow them into Maryland,” said field enforcement director Jeff Kelley.

The ATF patrols the Maryland-Virginia border, a known smuggling ground for black market cigarettes where value increases the farther north they travel to high tax states such as Maryland, New Jersey and New York.

“Many of these areas we see a bunch of boxes, cigarette boxes stacked up are all from one case. there might be 30, 40, 50 cases of cigarettes representing tens of thousands of dollars in tax loss,” Kelley said.

Maryland Comptroller Peter Franchot calls it the tip of the iceberg.

“Criminal penalties are not as great as they should be and so folks that engage in heroin trafficking and other lucrative criminal activity see this as something that is if anything, more lucrative and a lot fewer penalties if the get caught,” Franchot said.

“It’s off of everybody’s radar screen and at the end of the day if your neighbor asks why you got arrested, you say i just brought a few cigarettes into the State and it doesn’t sound so bad. There’s not the stigma attached to it,” Kelley said.

Between 103,000 packs of smokes and 250 gallons of booze, the state retail value of confiscated items last year is nearly three-quarters of a million dollars.

The U.S. Justice Department has estimated states lose $5 billion a year in cigarette smuggling.

Once the case against a smuggler is over, the comptrollers office auctions or destroys the items confiscated.

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