Illinois boosts cigarette tax, police promise to hammer evaders
Illinoisans are scrambling for cheaper ways to get their nicotine fix before the state’s $1 tax increase on a pack of cigarettes kicks in, CBS Chicago reports.
The state Senate passed Illinois Democratic Gov. Pat Quinn’s proposal, making the total taxes on a pack of cigarettes sold in Chicago $5.67 and $4.99 in suburban Cook County, reports the Post-Tribune.
Tax-supporting state Sen. Jeff Schoenberg said the tax will prove its effectiveness within the first year, saving Medicaid about $50 million by reducing illnesses related to smoking. “The tax does serve the purpose of pricing some people out of the market, indeed,” Schoenberg said, according to the Chicago Tribune.
In 2006, when taxes on a pack in Cook County increased to $2, the county brought in more than $200 million in cigarette taxes, according to the Tribune. According to annual reports, four years later in 2010, the county only brought in $131 million.
Cook County Sheriff Tom Dart told the Chicago Tribune he believes the decrease in revenue was due to fraud.
The Tribune reports that the Bureau of Criminal Investigation of the state Revenue Department “has defenses against online buyers who don’t file proper tax forms. Federal law allows the department to contact online retailers and obtain a list of Illinois customers, then send them a tax bill for whatever they bought.”
The department, however, said its main objective is to find out how independent retailers acquire their illicit supplies.
For sellers abiding by the law, like executive vice president of the Illinois Association of the Convenience Stores Bill Fleischli, the state is making obedience difficult because it is slow in issuing the new tax stamps, causing inventory to be low, reports CBS Chicago. Fleischli told CBS he fears customers will travel to Wisconsin, Indiana and even Missouri to stock up on cheaper cigarettes.
“After March 1 when Cook County raised their taxes, I lost about — between 15 to 20 percent of my business,” Illinois tobacco shop owner Jawad Muqeet told NBC Chicago. “The prices are so high nobody wants to buy cigarettes in downtown.”