Way back in January New York State started getting nervous over a dramatic drop in cigarette tax revenues—more and more people are quitting smoking, sure, but with more than $100 million of expected revenues missing something was clearly up. Now we might have a bit of an answer: stores selling untaxed cigarettes or using counterfeit stamps to avoid the taxes.
According to the New York Post, "The Sheriff's unit of the city Finance Department that conducted a sweep of 1,700 stores licensed to sell tobacco products found an astounding 42 percent either peddling untaxed cigarettes or using counterfeit stamps to duck the combined $5.85 city-state tax." Which is a pretty impressively high number—and definitely helps explain why the tax revenues the city has dropped 56 percent from 2003 to just $69.8 million!
According to Finance Commissioner David Frankel, the sweep wasn't about making up extra money though—it was about fairness. "At a recent outreach event in The Bronx, I had a guy who came up to me desperate for help because his family’s delicatessen is going out of business because their competitors are selling illegal cigarettes and they refuse to do it," Frankel told the tabloid. Yup, we're sure that the crackdown had nothing to do with trying to find more money for the city in trying economic times while maintaining the highest cigarette prices in the land. Nothing at all.