New cigarette tax could fuel black market for tobacco in Minnesota


Some law enforcement officials say higher taxes could lead to a black market for cigarettes in Minnesota.

A Homeland Security agent tells KSTP-TV it’s not unusual to find people smuggling tobacco into a state to sell it at lower prices.

"When a state raises its taxes, historically, it invites the black market into the economy because there is a profit to be made for folks to smuggle tobacco in to beat the higher tax rate," said Michael Feinberg. "Historically, a lot of times, organized criminal activity can take advantage of this, whether it's a drug trafficking organization, or an organization that is in the black market."

Starting July 1, Minnesota lawmakers voted to raise the tax on cigarettes by $1.60 per pack.

KSTP notes the new cigarette tax will be 30 cents higher than in Wisconsin, $1.47 higher than in Iowa, and $2.39 higher than in South Dakota.

According to the Raise it for Health coalition in Minnesota, the state's tax will help prevent thousands of kids from becoming addicted and help current smokers quit.

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