An estimated 56.8 per cent of cigarettes smoked in the state of New York in 2015 were smuggled in and sold on the black or grey market, the Tax Foundation found in its Nov 2017 report, based on 2015 data. The report claims differences in state cigarette tax rates have led to increased smuggling activity between low- and high-tax states.
New York has the highest state cigarette tax at USD 4.35 (EUR 3.73) per pack. According to the report, since 2006, cigarette smuggling has increased by 59 per cent in New York while tax rates have increased by 190 per cent.
After New York, Arizona was found to have the second highest level of smuggling activity at 44.8 per cent of consumption, followed by Washington (43.7 per cent), New Mexico (41.4 per cent) and Minnesota (35.9 per cent).
New Hampshire was found to have the highest level of outbound smuggling at 71.9 per cent of consumption, “likely due to its relatively low tax rates and proximity to high-tax states in the northeastern United States,” the Report stated.