Legislative Action Needed to Combat Illegal Tobacco Trade

Summary

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Illegal trafficking of cigarettes is a complex and evolving problem. In recent years, a number of states - including Michigan - have enacted substantial increases in cigarette excise taxes. As these tax increases drive up the price of cigarettes, many adult smokers have increasingly sought lower-priced cigarettes through non-traditional sources. Criminals have exploited the opportunity to provide consumers with cheaper alternatives through the sale of contraband cigarettes.

Who is profiting from this activity? Law enforcement investigations have linked contraband cigarette trafficking to organized criminal networks. One high-profile case involved a cigarette smuggling operation that transported millions of dollars of cigarettes from North Carolina, where excise taxes are low, to Michigan, where excise taxes are high, and deprived Michigan of required excise tax payments. Members of the smuggling ring were convicted of numerous crimes, including contraband cigarette trafficking, money laundering, RICO violations and providing material support to Hezbollah, a terrorist organization.

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Extract

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Legislative Action Needed to Combat Illegal Tobacco Trade

At a time when Michigan's budget is tight, the state may be losing millions of dollars in tax revenue. Today, the Legislature has the ability to give law enforcement more tools to help the state collect this mo...

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