skip navigation

PUBLICATIONS

Register for Latest Research

Stay Informed
Register with NCJRS to receive NCJRS's biweekly e-newsletter JUSTINFO and additional periodic emails from NCJRS and the NCJRS federal sponsors that highlight the latest research published or sponsored by the Office of Justice Programs.

NCJRS Abstract

The document referenced below is part of the NCJRS Virtual Library collection. To conduct further searches of the collection, visit the Virtual Library. See the Obtain Documents page for direction on how to access resources online, via mail, through interlibrary loans, or in a local library.

 

NCJ Number: 44647 Add to Shopping cart Find in a Library
Title: CIGARETTE BOOTLEGGING - A STATE FEDERAL RESPONSIBILITY
Author(s): R J KLEINE; R J REEDER
Corporate Author: U.S. Advisory Cmssn on Intergovernmental Relations
United States of America
Date Published: 1977
Page Count: 124
Sponsoring Agency: National Institute of Justice/
Rockville, MD 20849
Superintendent of Documents, GPO
Washington, DC 20402
U.S. Advisory Cmssn on Intergovernmental Relations
Washington, DC 20575
Publication Number: A-65
Sale Source: Superintendent of Documents, GPO
Washington, DC 20402
United States of America

National Institute of Justice/
NCJRS paper reproduction
Box 6000, Dept F
Rockville, MD 20849
United States of America
Document: PDF
Language: English
Country: United States of America
Annotation: CAUSES AND EFFECTS OF CIGARETTE BOOTLEGGING ARE ANALYZED, AND PROPOSALS FOR STATE AND FEDERAL ACTION TO CORRECT THE PROBLEM ARE PRESENTED.
Abstract: INTERSTATE CIGARETTE BOOTLEGGING HAS BECOME AN INCREASINGLY SERIOUS PROBLEM, PARTICULARLY IN THE NORTHEAST AND MIDWEST. SMUGGLING IS MADE PROFITABLE PRIMARILY BECAUSE OF DIFFERENCES IN STATE TAX RATES. CIGARETTES ARE BOUGHT IN LARGE VOLUME IN LOW-TAX STATES, TRANSPORTED ACROSS STATE LINES, AND SOLD AT A TREMENDOUS PROFIT IN HIGH-TAX STATES. THE MAJOR FINDINGS OF THIS REPORT INCLUDE: (1) THESE TAX-EVASION ACTIVITIES, CONSIDERED TO BE A SERIOUS PROBLEM IN 14 STATES, COST APPROXIMATELY $391 MILLION PER YEAR IN REVENUE LOSSES -- THE NATION'S NET REVENUE LOSS WAS $337 MILLION IN FISCAL YEAR 1975 (THE LOSS IN HIGH-TAX STATES IS GREATER THAN THE GAIN IN LOW-TAX STATES); (2) SMUGGLING IS DAMAGING TO THE LEGITIMATE TOBACCO INDUSTRY AND HAS COST MANY JOBS; (3) STATE EFFORTS TO CONTROL BOOTLEGGING ARE NOT EFFECTIVE BECAUSE OF THE INTERSTATE ASPECT OF THE PROBLEM AND THEIR LACK OF ADEQUATE RESOURCES; (4) BOOTLEGGING IS NOT A MINOR, VICTIMLESS OFFENSE -- IT IS A MAJOR SOURCE OF REVENUE FOR ORGANIZED CRIME, USED TO FINANCE OTHER ACTIVITIES; AND (5) THE ONLY WAY TO ELIMINATE BOOTLEGGING COMPLETELY IS TO ELIMINATE STATE TAX DIFFERENTIALS, AND THIS CANNOT BE ACCOMPLISHED WITHOUT STRONG FEDERAL INCENTIVES. RECOMMENDATIONS ARE PRESENTED, DEALING PRIMARILY WITH INCREASED LAW ENFORCEMENT EFFORTS. THE NATURE OF THE CRIME ITSELF IS DISCUSSED. THE FOUR TYPES OF CIGARETTE BOOTLEGGING ARE: CASUAL (TOURISTS BUYING FOR FRIENDS); ORGANIZED (THE TYPE WHICH CAUSES THE MOST CONCERN); MAIL-ORDER PURCHASE (NOW ON THE DECLINE BECAUSE OF STRICTER POSTAL LAWS); AND PURCHASE THROUGH TAX-FREE OUTLETS (INTERNATIONAL PORTS OF ENTRY, PX'S, AND INDIAN RESERVATIONS). ORGANIZED CRIME AND ITS IMPACT ON THE SMUGGLING PROGRAM IS EXAMINED. THE REPORT SUMMARIZES LEGISLATION AND AGENCIES ACTING TO REDUCE THE PROBLEM AND VARIOUS STATES' LAWS AND THEIR PENALTIES FOR CIGARETTE SMUGGLING. THE ACTUAL MECHANICS OF CIGARETTE TAX ADMINISTRATION ARE DISCUSSED, INCLUDING THE USE OF STAMPS AND DISTRIBUTOR DISCOUNTS. A PROPOSED FEDERAL INCENTIVE PLAN FOR EQUALIZING STATE TAX RATES IS OUTLINED; THERE WOULD BE A PHASED INCREASE IN THE FEDERAL EXCISE TAX ON CIGARETTES, WITH THE ADDITIONAL FUNDS USED TO GIVE REBATES TO STATES BASED ON THEIR CONSUMPTION. THERE ARE HOWEVER, MANY PROBLEMS WITH THIS KIND OF PROGRAM. APPENDIXES GIVE STATISTICS ON CIGARETTE TAXES, DESCRIBE THE STATISTICAL METHODOLOGY USED TO ESTIMATE THE REVENUE IMPACT OF BOOTLEGGING, AND PRESENT PROPOSED FEDERAL LEGISLATION WITH RESPECT TO BOOTLEGGING. TABLES AND GRAPHS ARE INCLUDED.
Index Term(s): Law enforcement; Organized crime; Smuggling/Trafficking; State laws; Tax evasion
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=44647

*A link to the full-text document is provided whenever possible. For documents not available online, a link to the publisher's website is provided. Tell us how you use the NCJRS Library and Abstracts Database - send us your feedback.