Study Finds State’s Losing $1.67B in Tax Revenue on Cigarettes

A study commissioned by convenience stores concluded smokers don't pay taxes on half of all the cigarettes they smoke in New York State.

The study says the state loses at least $1.67 billion in tax revenue on those cigarettes, which are bought at Indian reservations, military bases, duty-free or in states where taxes are lower. That doesn't include black-market and counterfeit cigarettes.

The study was funded by the New York State Association of Convenience Stores, which has argued for years its members are hampered by poor enforcement of tax laws on cigarettes. It also says if taxes were paid on all cigarettes smoked in New York it would generate over 6,700 jobs and over $257 million dollars in wages.

New York State’s cigarette excise tax rate of $4.35 per pack is the highest in the country. New York City adds $1.50 per pack on top of the state tax.