By Steve Birr
Officials in Virginia are moving against illegal cigarette smuggling across the state in an attempt to target the tobacco black market.
The Virginia State Crime Commission voted Monday to approve measures making it more difficult to flout the state’s sales tax on cigarette purchases. The current system allows any “business” to obtain certificates exempting them from the state sales tax when buying cigarettes from wholesalers — without any real background check on the business. The problem is leading to massive cigarette smuggling operations across state lines where excise taxes vary greatly, reports Richmond Times-Dispatch.
Authorities recently busted an operation running cigarettes from Virginia, where there is a 3 percent excise tax, to New Jersey, where there is a 27 percent excise tax. The individuals involved smuggled at least $9.5 million worth of cigarettes out of Virginia and used at least six shell corporations to gain exemption from the Virginia sales tax.
“We’re still dealing with some of these issues,” Kristen Howard, executive director of the crime commission, told Richmond Times-Dispatch.
Howard pushed a similar proposal in the state legislator last year that ultimately failed to win support. The commission will draft the proposals approved Monday into legislation to be considered by the General Assembly in January. The proposals focus on issuing certificates and putting specific restrictions on bulk purchases of cigarettes, reports WJLA.
Businesses selling cigarettes would go through a background check and obtain a certificate through the Virginia Department of Taxation costing up to $50. Businesses that already have an ABC license from the Virginia Department of Alcohol Beverage Control would have any fees waved.