Rising cigarette prices spark increase in ‘buttlegging’

Gregory Bresiger
July 28, 2018
Buttleggers love New York.
That’s because it is fertile ground for their illegal activities, since it is now more expensive than ever to buy smokes in the Big Apple.
New York has “the worst smuggling problem in America,” said Scott Drenkard, with the Tax Foundation.
The least one can now legally pay for a pack in New York City is $13, which was recently raised from $10.50.
“For someone who smokes cigarettes regularly, cigarettes [for a month] can cost as much as two months’ worth of groceries, family cell phone bills for a year, or a vacation,” according to Dr. Mary Travis Bassett, New York City Health and Mental Hygiene Commissioner.
Cigarette taxes and a new minimum price rule have raised the price of a pack by about 200 percent over the past decade.
Buttleggers avoid paying pricey cigarette taxes by mass buying cheap smokes in a low-tax state such as Virginia, then selling them here illegally. (Virginia, for example, has a 30-cent tax versus New York City and state’s combined $5.85).
With already almost the highest cigarette taxes in the nation, New York officials haven’t added more taxes. Instead, they now require sellers raise the minimum price of a pack by $2.50.
That means a pack-a-day habit costs about $4,800 a year. That can fuel buttlegging, city officials concede.
“Price disparities create incentives for illegal activity,” said Kim Kessler, assistant commissioner for the bureau of chronic disease prevention and tobacco control, NYC Health Department.
“But we know that despite this activity, raising the price of tobacco products still reduces consumption. The lives we save by raising the price of tobacco far outweigh any lost taxes due to illegal sales,” Kessler told The Post.
“The adult smoking rate has decreased from 21.5 percent in 2002 to 13.1 percent in 2016,” Kessler said. “Increasing the cigarette price floor to $13 is projected to lead to a 6.4 percent decline in adult cigarette smoking.”
However, 850,000 New Yorkers still smoke.
And since 2006, says a Tax Foundation report, illegal sales have risen. The report says the number of illegal cigarettes here now “outnumbers” the number of legal cigarettes. Illegal butts are about 60 percent of the market.
The city and state have increased enforcement. State officials set a record in 2017 by seizing $6.6 million worth of illegal tobacco products, $1 million more than in 2016