Washington Fears Smuggling

SEATTLE -- For years, Washington state has been waging a losing battle with cigarette smugglers. By the state's admittedly crude estimate, nearly one out of three cigarettes sold is contraband, meaning no tax is collected. The outlook seems even darker as law-enforcement and state revenue officials peer into the post-Initiative 773 era, which starts Jan. 1. The measure, approved by voters earlier this month, will tack an additional 60 cents in taxes onto each pack of cigarettes. State revenue forecasters maintain they took smuggling into account when they originally projected the initiative would generate $130 million a year, most of it dedicated to improving health care for low-income people. Projections have since been lowered by about $12 million, according to the Seattle Times. With its new $1.425-per-pack tax, Washington will become the most expensive state in the nation in which to be a taxpaying smoker. The initiative will also increase the retail price of other tobacco products, such as cigars, by about 30 percent. "If I were a betting man," said Department of Revenue spokesman Mike Gowrylow, "I'd bet that the level of evasion will increase."Avoiding the TaxAnd why not, considering the easy, cheap alternatives?* A trip to neighboring Idaho (28 cents in taxes per pack) or Oregon (68 cents a pack in cigarette tax and no sales tax).* A trip to one of the numerous Puget Sound-area tribal smokeshops, which do a thriving business selling tax-free cigarettes. * A trip to the Web, where a growing number of online vendors sell cigarettes and other tobacco products, in some cases promising not to reveal any trace of the transaction to state revenue officials. As Carter Mitchell, who heads the tobacco-enforcement program for the State Liquor Control Board, puts it: "You can't become the highest-taxed state in the nation and not be in for a helluva ride."
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