15 percent of cigarettes sold in NYC have illegal tax stamps, study finds

August 27, 2015

Licensed tobacco retailers throughout New York City are selling a substantial number of cigarette packs carrying either counterfeit or out-of-state tax stamps, finds an investigation by NYU public health researchers.

These illegal cigarette sales are more pervasive in independent stores, as opposed to chain stores, according to the study published in the BMJ journal Tobacco Control.

"Our research found that illegal cigarettes are regularly available over the counter in New York City," said study author Diana Silver, associate professor of public health at NYU's Steinhardt School of Culture, Education, and Human Development and College of Global Public Health. "Taxes on packs sold with counterfeit or out-of-state tax stamps are not being recouped by the city and the state."

New York City has adopted several laws over the years aimed at reducing smoking. The city currently has the highest cigarette prices in the country, thanks to state and city taxes and minimum price laws. At the end of 2013, New York City established its minimum price for cigarettes at $10.50 - $1.67 higher than the rest of New York State - and added new provisions for enforcing cigarette laws.

In New York City, stamping agents pay cigarette taxes to the government in advance; they purchase and affix tax stamps to packs for wholesalers, who in turn sell the stamped packs to the more than 9,700 licensed retailers.

"Consumers may be unaware they are purchasing illegal cigarettes, since, at least in our study, clerks sold our investigators these cigarettes at full price," noted Silver.

Prior studies have collected littered cigarette packs and examined their stamps to try and understand the extent to which cigarette taxes are dodged, but evidence about tax evasion, especially in over-the-counter cigarette sales, is still scarce.

Silver and her colleagues studied the sales of illegal cigarette packs at licensed New York City retailers in the spring and fall of 2014, after the minimum price law was established. Investigators purchased 830 packs of cigarettes from chain and independent cigarette retailers in 92 retail-dense neighborhoods throughout all five boroughs. To determine the legality of the tax stamps, the New York City Sheriff's office used a laser detection device to inspect the packs and find counterfeit and out-of-state stamps.

The researchers found that 15 percent, or 125 of the 830 packs, had either counterfeit or out-of-state stamps. More than 10 percent of all stamps were counterfeit, while 4.5 percent carried stamps from Virginia. Virginia does not have a minimum legal price for cigarettes and imposes a cigarette excise tax of 30 cents per pack - the second-lowest in the country.

"While cigarettes that have been smuggled into New York City from other places may also be sold directly to consumers, our study demonstrates that retailers are selling these cigarettes throughout the city," said Silver.

A significantly higher percentage of illegal packs were purchased from independent retailers, compared with chain stores. In addition, the number of illegal packs - which were found in all five boroughs - grew over the period studied, increasing from the spring to the fall of 2014.

The vast majority of cigarette packs were sold at prices in compliance with the minimum price law, suggesting that the lower prices paid by the retailers were not passed on to customers.

"Our findings underscore the need for intensive monitoring, oversight, and support to help retailers comply with existing and new cigarette laws. The use of digital tax stamps, coordination of taxes across areas, and systematic monitoring of enforcement efforts could help to address the issues we uncovered," said Silver.
-end-
In addition to Silver, study authors include Margaret Giorgio, Jin Bae, Geronimo Jimenez, and James Macinko. The Institute for Human Development and Social Change at NYU funded the study.

About the Steinhardt School of Culture, Education, and Human Development
(@nyusteinhardt)

Located in the heart of Greenwich Village, NYU's Steinhardt School of Culture, Education, and Human Development prepares students for careers in the arts, education, health, media, and psychology. Since its founding in 1890, the Steinhardt School's mission has been to expand human capacity through public service, global collaboration, research, scholarship, and practice. To learn more about NYU Steinhardt, visit steinhardt.nyu.edu.

About the NYU College of Global Public Health

At the College of Global Public Health (CGPH) at NYU, we are preparing the next generation of public health pioneers with the critical thinking skills, acumen and entrepreneurial approaches necessary to reinvent the public health paradigm. Devoted to employing a nontraditional, inter-disciplinary model, CGPH aims to improve health worldwide through a unique blend of global public health studies, research and practice. CGPH is located in the heart of New York City and extends to NYU's global network on six continents. Innovation is at the core of our ambitious approach, thinking and teaching. To learn more about CGPH, visit http://publichealth.nyu.edu/.

New York University

Related Public Health Articles from Brightsurf:

COVID-19 and the decolonization of Indigenous public health
Indigenous self-determination, leadership and knowledge have helped protect Indigenous communities in Canada during the coronavirus disease 2019 (COVID-19) pandemic, and these principles should be incorporated into public health in future, argue the authors of a commentary in CMAJ (Canadian Medical Association Journal) http://www.cmaj.ca/lookup/doi/10.1503/cmaj.200852.

Public health consequences of policing homelessness
In a new study examining homelessness, researchers find that policy such a lifestyle has massive public health implications, making sleeping on the street even MORE unhealthy.

Electronic health information exchange improves public health disease reporting
Disease tracking is an important area of focus for health departments in the midst of the COVID-19 pandemic.

Pandemic likely to cause long-term health problems, Yale School of Public Health finds
The coronavirus pandemic's life-altering effects are likely to result in lasting physical and mental health consequences for many people--particularly those from vulnerable populations--a new study led by the Yale School of Public Health finds.

The Lancet Public Health: US modelling study estimates impact of school closures for COVID-19 on US health-care workforce and associated mortality
US policymakers considering physical distancing measures to slow the spread of COVID-19 face a difficult trade-off between closing schools to reduce transmission and new cases, and potential health-care worker absenteeism due to additional childcare needs that could ultimately increase mortality from COVID-19, according to new modelling research published in The Lancet Public Health journal.

The Lancet Public Health: Access to identification documents reflecting gender identity may improve trans mental health
Results from a survey of over 20,000 American trans adults suggest that having access to identification documents which reflect their identified gender helps to improve their mental health and may reduce suicidal thoughts, according to a study published in The Lancet Public Health journal.

The Lancet Public Health: Study estimates mental health impact of welfare reform, Universal Credit, in Great Britain
The 2013 Universal Credit welfare reform appears to have led to an increase in the prevalence of psychological distress among unemployed recipients, according to a nationally representative study following more than 52,000 working-age individuals from England, Wales, and Scotland over nine years between 2009-2018, published as part of an issue of The Lancet Public Health journal on income and health.

BU researchers: Pornography is not a 'public health crisis'
Researchers from the Boston University School of Public Health (BUSPH) have written an editorial in the American Journal of Public Health special February issue arguing against the claim that pornography is a public health crisis, and explaining why such a claim actually endangers the health of the public.

The Lancet Public Health: Ageism linked to poorer health in older people in England
Ageism may be linked with poorer health in older people in England, according to an observational study of over 7,500 people aged over 50 published in The Lancet Public Health journal.

Study: Public transportation use linked to better public health
Promoting robust public transportation systems may come with a bonus for public health -- lower obesity rates.

Read More: Public Health News and Public Health Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.