Exchanging coke for cartons...dat's an interesting idea though. Coke ain't my level though....but I do like the idea of using drugs as payment for 1000s of cartons only if I had room to stock dat many.
Cigs are still legal for now. But the politicians are doing a good job in making reselling cigs look like selling actual coke or weed.
http://online. wsj.com/article/ SB12480468278516 3691.html
WASHINGTON -- States across the U.S. have been taking a harder line against an old problem -- cigarette smuggling -- as part of the widening search for solutions to their budget problems.
States including Florida, Maryland, Michigan, New York, Rhode Island and Virginia this year have stepped up law-enforcement efforts with the aim of recouping taxes lost to bootleg cigarette sales.
Studies indicate states are losing about $5 billion annually in tax revenue because of illegal tobacco sales, said Phil Awe, who heads the tobacco-diversion division of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
"We do not want to have our tax laws ignored and lose tax revenue from legitimate sales of cigarettes," Maryland State Comptroller Peter Franchot said of the crackdown. He estimates that his state is losing "hundreds of thousands of dollars" annually.
The focus on cigarette smuggling is one of several initiatives gaining momentum as states hunt for new revenue to avoid cutting services or raising taxes. Some are contemplating revising current laws or creating new ones that could force out-of-state online retailers to collect sales taxes.
Others, such as Michigan, are looking at releasing some state inmates and closing prisons. Maryland is pushing several initiatives, including a partnership with the Internal Revenue Service that is helping the state collect back taxes from federal contractors.
In the case of cigarette schemes, authorities see more organized crime and international rings supplanting mom-and-pop operations. As a result, many local jurisdictions are joining with federal authorities to target trafficking.
"It's a big business and it's getting horribly bigger," said Paul Carey III, enforcement coordinator for the Northern Virginia Cigarette Tax Board, who said there is smuggling even among counties with varying tax rates within a single state.
Looking Back at Cigarette Smuggling
* Iranians Cancel Cigaret License of R.J. Reynolds (Jan. 15, 1980)
* Cigarette Bootlegging Threat Rising Due to Tax Disparities (Oct. 2, 1984)
* Cigarette Smuggling in China (July 31, 1990)
* They'd Walk a Mile for a Camel, If Only Anyone Would Let Them (Aug. 24, 1992)
The board, which conducts field inspections of retail stores to insure proper payment of taxes, said that in the past five months it has conducted seizures at 157 retailers in its 16 local jurisdictions, more than triple the total from the same time last year.
Mr. Carey said tobacco companies are working with authorities nationwide to assist investigators.
John Singleton, spokesman for Reynolds American Inc., said his company "works with the appropriate state and federal authorities" in investigating cigarette smuggling. "It's in our interest as a company to ensure our products stay in the legal supply chain."
He added that the company, maker of cigarette brands including Camel, Winston, Kool and Pall Mall, expects smuggling to increase because rising excise taxes are creating more incentive.
The excise taxes on cigarettes are levied by states and some localities. Smugglers arbitrage the differences between lower- and higher-tax jurisdictions. New York City smokers take among the steepest hits, with combined state and local taxes of $4.25 a pack. Crimes include smuggling cigarettes bought legally in lower-tax areas and reselling them elsewhere, stealing state tax stamps and manufacturing counterfeit cigarettes.
In one recent case, an undercover investigation by the New York State Department of Taxation and Finance led to the arrests of 18 residents of Nassau and Queens counties. Investigators from the tax department posed as cigarette bootleggers and sold illegal, untaxed cigarettes to a network of store owners, including two 7-Eleven operators. The operation cost state and local governments $2.1 million in uncollected taxes.
[States Go to War on Cigarette Smuggling]
In a second New York case, ATF agents arrested two Queens residents who were trying to provide New York State/New York City tax stamps to an undercover agent in exchange for illegal cigarettes they allegedly planned to resell. In the course of the nine-month investigation, the two defendants bought nearly 32,000 cartons of untaxed cigarettes. The loss of tax revenue for the city and state was at least $1.8 million.
In Fairfax County, Va., federal and local authorities arrested two men and charged them with conspiracy to distribute cocaine after the suspects exchanged one kilogram of cocaine with an undercover ATF agent in exchange for 3,000 cartons of cigarettes. The aim, according to federal documents filed in the case, was to move the cigarettes to Yonkers, N.Y., for resale.
"They were willing to trade cocaine for cigarettes. That tells you about the profit margin they saw on the cigarettes," said Edgar Domenech, who heads the ATF's Washington, D.C., field division. Mr. Domenech said a kilogram of cocaine can go for $30,000 on the street.
"People have smuggled cigarettes from North Carolina and Virginia up north in the past, but we haven't seen the volume we are seeing today where it's tracked by the trailer load," said Capt. Dennis Wilson, commander of the criminal-intelligen ce division for the Fairfax County police, who are working with the ATF.