Massachusetts Faces Fallout From Flavored Tobacco Ban
STOUGHTON, Mass. — Bootleg cigarette smuggling has become an ongoing drain on law enforcement as illicit tobacco seizures have surged and state tax revenue from tobacco sales continues to plummet, according to a new report by the Massachusetts Illicit Tobacco Task Force (ITTF).
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"Despite enforcement efforts and the hard work done by the Illegal Tobacco Task Force, smuggling of untaxed tobacco products remains a significant challenge," said Peter Brennan, executive director of the New England Convenience Store and Energy Marketers Association. "Smugglers are developing more sophisticated operations to counter the Task Force's targeted investigations. It's clear that the Commonwealth is struggling with enforcement."
According to the report, the state's rush to ban flavored tobacco has failed to curb use of these products while inadvertently creating a market for illicit untaxed products and cross-border smuggling. The report estimated the ban has cost the state nearly $150 million in lost tax revenue from legal sales since it went into effect in 2020.
"It's clear that criminals — including organized crime syndicates — are profiting from bootleg cigarettes and vape, and have made contraband tobacco products a lucrative part of their racketeering endeavors," Brennan added.
The report also found:
- New challenges that have developed due to the storage and destruction of e-cigarettes (ENDS);
- Field personnel routinely encounter or seize untaxed menthol cigarettes, originally purchased in other states, and flavored ENDS products and cigars purchased from unlicensed distributors operating both within and outside the Commonwealth;
- Cigarette excise tax collections decreasing by $25.2 million in from 2023; and
- An overall decline in tobacco product revenues for the fourth consecutive fiscal year.
The report also acknowledged the need for continued data collection, compliance resources and enforcement coordination to uphold state policy, while expressing concern over challenges in effectively coordinating such enforcement efforts.
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"Moving flavored tobacco products out of the heavily regulated retail sales environment has been counterproductive and ineffective," Brennan said. "While criminals rake in cash and flood the streets with contraband to fund illegal enterprises, taxpayers have lost, public health is threatened, and retailers, who continue to demonstrate high rates of compliance, are left to suffer as they follow the law."
More details can be found in the full report here.