The state seeks to increase smuggling penalties in an effort to extinguish the growth of the crime.
BERLIN, MD – Maryland officials say cigarette smuggling is on the rise, and it’s costing the state hundreds of thousands of dollars in lost tax revenue, the Delmarva Daily Times reports.
Maryland assesses a $2-per-pack excise tax, and the state is focused on trying to keep those tax dollars within the state.
Comptroller Peter Franchot “has always been a strong proponent for aggressive enforcement of Maryland’s tax laws,” said his spokesperson, Christine Feldmann. “It’s a matter of fairness. Criminals who knowingly violate Maryland’s tax laws hurt small businesses that follow the rules. It’s about leveling the playing field.”
Feldmann said the practice continues because the penalties for violators are “not very bad,” creating an environment that breeds “multiple repeat offenders.”
Currently, smugglers face criminal charges of transporting and possession of untaxed cigarettes. The former carries a fine of $50 per carton and a threat of up to two years in prison, while the latter is a misdemeanor punishable by up to a $1,000 fine and one year in prison.
This year, state police at the Berlin Barrack are on pace to seize roughly four times more cigarettes than last year. They made four arrests last year, uncovering 1,737 cartons, while this year, they have already made five arrests and seized about 1,600 cartons.
It is a violation of Maryland law to enter the state with more than two packs of cigarettes purchased out-of-state.
Franchot is sponsoring legislation to stiffen the smuggling penalties: one would increase the per-carton penalty to a $150 fine and imprisonment for up to two years — and that’s for first-time offenders. Repeat offenders would face a fine of $300 per carton and up to five years in jail. Feldmann said any county that borders a low-tax state is a target, including Cecil and Prince George’s counties.
Police said smugglers have been taking north-south routes to unload cargo in New York City, where the combined city and state taxes total $6.46 a pack.
Lt. Krah Plunkert in Princess Anne, Maryland, said his troopers have seen a significant increase in cigarette smuggling, and they have already made eight arrests this year. By comparison, they made just two arrests last year. He said he believes cigarette smuggling is funding organized crime, much like alcohol and bootlegging nearly a century ago.
“There has to be some type of group that puts it together,” he said. “I don’t think they’re just putting the money back in their pocket and purchasing houses and nice vehicles.”