Office of the State Treasurer


September 19, 2005

Kathy Hennessy
(609) 984-7110

Treasury's Untaxed Cigarette Enforcement Nets $1.9 million

 TRENTON -- Treasurer John E. McCormac and Division of Taxation Director Robert K. Thompson announced today that the increased enforcement to collect unpaid cigarette and sales and use taxes prevented the loss of $1.9 million for New Jersey taxpayers in fiscal year 2005.

 Taxation's Office of Criminal Investigations aggressively enforces New Jersey 's Cigarette tax law. Investigations and seizures are often done in collaboration with local, state police, and federal authorities, such as the FBI, the U.S. Bureau of Customs & Border Protection, and the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives at Newark Liberty Airport .

 "We have made enforcement a priority and New Jersey taxpayers are the beneficiaries," said McCormac. "The State of New Jersey is dedicated to ensuring that cigarettes are sold legally and proper taxes are paid."

 By comparison, the State of New Jersey prevented the loss of $1.29 million through cigarette tax enforcement in FY 2004.

 New Jersey has worked in coordination with law enforcement agencies to pursue vendors who attempt to sell cigarettes illegally and have launched operations to seize the contraband. During the last fiscal year, 72,838 cartons of untaxed cigarettes were seized worth a retail value of $4.5 million. There were 137 court cases involving cigarette taxes, including 125 cases in which contraband cigarettes were seized.

 All cigarettes used or sold in New Jersey must have tax stamps affixed, proving that the State's tax of $2.40 per pack has been paid. In New Jersey , it is illegal to purchase or use cigarettes from other states or over the Internet without paying all requisite taxes due to New Jersey .

 Retailers can only obtain cigarettes from licensed distributors, who affix the New Jersey tax stamps. Out of state sellers are required by federal law (Jenkins Act) to provide lists of customers to tax officials from all states where sales orders originate.

 "Taxation's Office of Criminal Investigation deserves credit for a job well done," Thompson said. "Law abiding taxpayers should not be penalized for those who avoid paying their fair share of taxes."

 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.

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