Cigarette smuggling on the rise as taxes skyrocket - FOX 32 News Chicago

Cigarette smuggling on the rise as taxes skyrocket

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CHICAGO (FOX 32 News) -

When Illinois Gov. Pat Quinn signed a bill adding another dollar a pack to the state's cigarette tax, law enforcement leaders knew they had their hands full.

John Chambers, head investigator for the Illinois Department of Revenue, says cigarette smuggling now rivals illegal drug smuggling, and street gangs are getting involved.

"Keep in mind this is very similar to drug activity, smuggling drugs, and there could be concealed compartments, false floors in the bed of a truck, much like drugs, all packed with cigarettes," Chambers said.

With Chicago, Cook County, and Illinois taxes all included, smokers now pay $4.66 a pack in taxes in Chicago. That's the second-highest cigarette tax in the nation, trailing only New York City at $5.85. People looking to make quick cash don't need to travel far to buy cheap cigarettes. Indiana's tax is just $0.995 a pack, and Missouri's tax is the lowest in the country at just $0.17. Chambers says cigarette smuggling is now as lucrative as drug smuggling, with much lower penalties.

"We're going to do everything in our power to combat this," he said.

In a recent study, University of Illinois at Chicago professor David Merriman found 75 percent of cigarettes in Chicago didn't have the proper tax stamps. He says the most recent increase will likely have a big impact along state lines.

"For the ordinary everyday smoker, many of them have already found ways to avoid the tax. I think it's going to be a much bigger issue in areas where the state border makes it a big difference," Merriman said.

A clerk at a tobacco shop in Hammond, Ind., less than a mile from the state line, says business has doubled since the latest increase began at the end of June.

"They come in and buy like 10, 15, 20 cartons at a time," said Jessica Kempke.

That doesn't surprise Lloyd Grant. He's a smoker who used to live in Chicago, but moved across the border to Hammond in part to avoid taxes. He says he sees people smuggling cigarettes back to Chicago all the time.

"They come to Indiana, they buy maybe a carton or two or three cartons of cigarettes, take them back to Chicago and sell them for maybe $6 or $7 a pack. They can make a lot of money," Grant said.

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