BOSTON — With the second-highest cigarette taxes in the country, Massachusetts is an attractive target for tobacco smugglers.
Studies conducted before an increase in the cigarette tax took effect this summer estimated as much as 20 percent of the cigarettes smoked in Massachusetts were brought in from out of state — translating to a loss for the state of about $120 million per year.
With the $1-a-pack increase passed by lawmakers in July, that rate is expected to grow.
It’s to that end that the state has formed a nine-member commission to examine the topic of tobacco smuggling: how to prevent it and how to enforce existing laws already on the books.
Department of Revenue Commissioner Amy Pitter says the commission will seek to quantify the exact rate of tobacco smuggling into Massachusetts.
“We take in about $600 million a year in tobacco revenues,” Pitter said. “So if 10 percent of our revenues are lost to smuggling, that is $60 million. And 10 percent is extremely conservative.”
Another key goal is to identify how tobacco products are being smuggled — whether by consumers crossing the border to buy cheaper cigarettes, or large operations transporting truckloads from lower-tax states like Virginia or New Hampshire, where some products cost half the price they do in Boston.
“There’s also an import problem,” Pitter said. “There are counterfeit cigarettes that come in from overseas and there are planeloads of counterfeit cigarettes coming in with no stamp at all.”
The commission includes members from various backgrounds, including a state police detective, a state senator and the director of the New England Convenience Store Association.
The panel will be tasked with examining the issue of smuggling and drafting legislation to curtail smuggling operations. It is expected to produce a report on the matter by March 1.