Massachusetts suffers million-dollar loss from vape smuggling

According to a report by the Eagle Tribune, on October 27th, 2019, the state of Massachusetts banned the sale of flavored cigarettes and e-cigarettes throughout the entire state. However, smugglers have been able to bring these products into the state through underground smuggling networks. As a result of the smuggling of e-cigarette products, the state lost millions of dollars in tax revenue in 2022.

Cross-border smuggling remains the main challenge for tobacco law enforcement.

According to a new report from the Multi-Agency Illegal Tobacco Task Force, a large amount of illegal and untaxed electronic cigarette products related to cross-border smuggling were seized last year. In the previous year, electronic cigarettes provided Massachusetts with approximately $16.3 million in tax revenue. As more smokers quit their addiction, the state's tobacco tax collection has gradually decreased from $610 million in 2016.

According to the report, over 140,000 untaxed e-cigarette products related to cross-border smuggling were seized by authorities in 2022.

The report stated that inspectors frequently encounter or seize mint-flavored cigarettes purchased in neighboring states, as well as flavored electronic cigarettes and cigars purchased from unlicensed dealers.

The number of seized electronic cigarettes in 2022 decreased compared to 2021, with approximately 210,000 electronic cigarette products being confiscated. However, a report highlights that cross-border smuggling remains the primary challenge for tobacco law enforcement in the state.

Buyers who want to avoid paying taxes.

In 2019, former governor of Massachusetts, Charlie Baker, signed a law banning flavored tobacco products and imposing a new 75% wholesale tax on e-cigarettes. However, the state's high tobacco taxes have led to smugglers bringing products from states with lower taxes and selling them to buyers looking to avoid Massachusetts' tobacco consumption tax.

According to the law, anyone found bringing untaxed electronic cigarettes or vaping products into the state can be fined $5,000 for first-time offenses and up to $25,000 for repeat offenders. These regulations also permit law enforcement to seize untaxed electronic cigarettes and any vehicles, boats, or planes used for smuggling.

Currently, Massachusetts has the second-highest tobacco tax in the country, second only to New York. The high tobacco tax has driven many smokers to neighboring New Hampshire, which taxes each pack of cigarettes at $1.78, compared to Massachusetts' $3.51 per pack. This price does not include the state's 6.25% sales tax.

Further reading:

After a ban on flavored tobacco products in the state of Massachusetts, tax revenue has plummeted by $127 million and black market activities have flourished.

A ban on menthol cigarettes in the state of Massachusetts has resulted in a 33% decrease in sales.

References:

The state of Massachusetts is facing difficulties in combating the smuggling of vaping products across state lines.