Cigarette Smuggling in Boston

in Business Risk

According to data collected by RTI International, nearly 40 percent of the cigarettes smoked in Boston, Massachusetts were smuggled in to the state through the black market and did not pay the state excise tax. Statewide, the Department of Revenue estimates that 8 to 27 percent of all cigarettes smoked in the state were smuggled. Based on those estimates, the state loses between $60 Million to $250 Million a year in taxes due to cigarette smuggling.

The average price of a cigarette pack in Massachusetts is $9.60, with roughly half of the cost due to state taxes. The state collects $660 Million a year from tobacco sales.

64 percent of the black market cigarettes sold in Boston were traced back to Pennsylvania, where the tobacco tax per pack is $1.60. Smugglers purchases cartons of cigarettes and simply drive to Boston where the packs are sold on the black market.

Source:  Kevin Hartnett, “Boston’s black-market cigarette problem,” Boston Globe, February 2, 2014.

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