Office of the State Treasurer


CONTACTS: Kathy Hennessy
February 15, 2005
(609) 984-7110
Treasury Targets Illegal Cigarette Trade Practices
 TRENTON -- State Treasurer John E. McCormac and Division of Taxation Director Robert K. Thompson today announced that the State is cracking down on the illegal practice of “rebating” in connection with the sale of cigarettes.

 Under New Jersey’s Unfair Cigarette Sales Act, which was adopted in 1952, it is illegal for distributors and wholesalers to offer rebates when selling cigarettes, or for retailers to ask for or receive such rebates. This law was enacted to prevent unfair trade practices in the cigarette industry and to protect and stabilize the collection of taxes on the sale of cigarettes.

 As part of the crackdown, the Division of Taxation will be sending a notice to more than 13,000 licensed distributors, wholesalers and retailers of cigarettes. The notice will serve as a reminder that failure to comply with New Jersey’s Unfair Cigarette Sales Tax may result in the suspension or revocation of their licenses, as well as civil or criminal penalties.

 “The practice of rebating provides an unfair advantage to those offering such rebates and harms those businesses that comply with the law,” said Director Thompson. “The Division takes this matter very seriously and we will not hesitate to suspend or revoke a license of any licensee who violates the law.”

 Treasurer McCormac noted that the Division of Taxation has historically enforced the Unfair Cigarette Sales Act, but believes that a timely reminder to all licensees is appropriate. “The sales act ensures that all licensees compete on a level playing field,” said Treasurer McCormac. “Strict enforcement promotes business fairness and, as an extension, safeguards the integrity of New Jersey’s cigarette tax revenue stream,” McCormac said.

 Anyone with information regarding violations of the Unfair Cigarette Sales Act or the Cigarette Tax Act are encouraged to call the Division of Taxation, Office of Criminal Investigation’s Tobacco Interdiction Program (TIP) Hotline at (609) 984-1225.

>>Return to Previous Page