Proposal to cut black market cigarette sales
by Andrew Shilling
Jul 31, 2013 | 1021 views | 0 0 comments | 8 8 recommendations | email to a friend | print
State Senator Tony Avella, Small Business Congress president Sung Soo Kim and executive vice president Steven Barrison
State Senator Tony Avella, Small Business Congress president Sung Soo Kim and executive vice president Steven Barrison
As a response to the rising “sin tax” on cigarettes sold in New York City, out-of-state packs now account for more than 60 percent of sales in the city, according to the Tax Foundation.

Governor Andrew Cuomo passed statewide legislation raising the penalty from $150 to $600 per carton for illegally selling untaxed cigarettes, and the City Council is currently working to create a city fine of $2,000. If passed, second offenders would have to pay $5,000.

In addition to these measures, State Senator Tony Avella and The Small Business Congress (SBC) have proposed a task force to nab bootleggers at the source.

With a proposed nine-member board, this anti-smuggling panel would hold public hearings to recommend new legislation and develop innovative law enforcement techniques to help target illegal distribution.

“Of course there are individual agencies working on this problem, but are they giving it the proper attention and coordination?” Avella asked. “”I’ve found, through all my years in government, that one agency doesn’t always talk to the other and there has to be a comprehensive approach. This has gotten really serious.”

Avella said that in addition to creating unfair competition, the illegal sale of cigarettes has put dollars into the pockets of terrorist organizations such as Hamas and Hezbollah.

“Black market cigarettes also hurt law-abiding mom-and-pop stores and other small businesses throughout New York by putting those who do pay taxes at a competitive disadvantage,” he said. “It is imperative that concerted efforts to develop enhanced measures and strategies to fully address this issue are undertaken.”

According to the SBC, the city has lost nearly $250 million in revenue since 2002 due to illegal sales.

“We need to stop the black market sales so that retailers who sell cigarettes are not continually victimized,” said SBC president Sung Soo Kim.

Avella joined members of the SBC and business owners to announce the proposed task force last week at a deli on 38th Avenue and Union Street in Flushing.

With the attorney general as the proposed committee chair, other seats on the task force would include commissioners in financial services, justice services, health and room for one governor-appointed position. There would also be a place for Assembly and State Senate-appointed seats. The SBC would also hold a non-voting position.

According to SBC executive vice president Steven Barrison, the city and state need more than just additional fines to combat this issue.

“The City Council bill has no teeth and no real directive in it as far as policing and to actually stop it,” Barrison said. “The state task force initiative would have funding, leasing, investigatory measures and create action to take an aggressive posture to go against these people and not just making a law.”

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