New York cigarette tax revenue elusive
Cigarettes that were purchased by an undercover New York City investigator last year on the Poospatuck reservation on Long Island. Credit: Charles Eckert
The price of vice never wants for government attention. Now New York's new governor and attorney general are making their first efforts to reclaim hundreds of millions of dollars in lost tax revenue from the illegal sale of cigarettes.
But don't count the money just yet. Past initiatives like these have always gone up in smoke.
Attorney General Eric Schneiderman used his debut news conference on Long Island to announce a lawsuit against six Internet companies selling discount cigarettes. New York is one of six states that prohibits online tobacco sales.
For the next budget cycle, Gov. Andrew M. Cuomo has included $130 million in revenue from taxes on smokes sold by sovereign tribal nations to non-natives. But that figure is only an estimate, because no governor has ever been able to capture this phantom revenue, despite a 1994 U.S. Supreme Court ruling giving the state a green light.
The illegal online and tribal sales of cigarettes is not only about lost revenue, it also undercuts legitimate retailers, often small vendors, whose sales and store traffic have steadily declined.
Shutting down a few offshore sites doesn't stop another few from starting. Adding tax revenue to a budget without a strategy of how to collect it isn't realistic.
It's just a start, again.
