James Salzer of the Atlanta Journal Constitution covered yesterday’s meeting of the Senate study committee on cigarette tax evasion.

Tobacco taxes vary wildly from state to state, and the  1950s era tax stamps used by Georgia and most other states are easily counterfeited.  Although Georgia’s $.37 per pack tax is among the lowest in the country, every neighboring state has an even lower tax.  South Carolina’s tax, at seven cents per pack, is the lowest in the nation.

A tractor trailer of cigarettes bought in South Carolina is worth $60,000 more when it crosses the Georgia line, and experts estimate that Georgia is losing as much as $20 million per year from smuggling. 

In the higher tax states, cigarette smuggling is more lucrative than the drug trade, without the risk of severe criminal penalties. 

Philip Awe, chief of alcohol and tobacco enforcement for the United States Justice Department’s Bureau of Alcohol, Tobacco, Firearms and Explosives, briefed our committee on federal efforts to control cigarette smuggling. 

Although large scale cigarette smuggling has long been dominated by organized crime, two recent cases involved Islamic terrorist groups.  There is also evidence that the Chinese Army, which operates a dozen cigarette manufacturing plants, is exporting counterfeit Marlboros and other high end cigarettes, complete with phony tax stamps.   

In response, California recently made its tax stamps more difficult to counterfeit, adopting technology currently used with credit cards and bank notes.  We heard from two technology vendors about ideas to improve Georgia’s system of tax stamping.  

We also heard from Greg Martin, executive director of the Southern Association of Wholesale Distributors, a trade group of cigarette wholesalers.  He shares the concern about smuggling (his members lose money from it, too) but does not want the expense of any new technology shifted to his members.

Bart Graham, our Commissioner of Revenue, has the converse concern.  He does not want the cost of any new technology coming out of his department’s budget.

I am persuaded that something must be done.  I will keep you posted as the study committee continues its work.

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In his Political Insider column today, Jim Galloway of The Atlanta Journal Constitution wrote about the experience of New Mexico after passing a local option Sunday sales bill in 1995.  Alcohol related crashes rose by 29% and alcohol related fatalities increased by a staggering 42%.  According to researchers who studied the statistics:

“For the first time, we have real data on whether blue laws actually protect public health,” said study co-author Dr. Garnett McMillan of the Behavioral Health Research Center of the Southwest in Albuquerque, New Mexico. “Our research shows that the Sunday ban saved lives and prevented hundreds of injuries and fatalities from alcohol-related crashes.”

Supporters of Sunday sales are undeterred by the increase in alcohol related crashes and fatalities.  Senate Bill 26 would enact a system of local option Sunday sales similar to the one implemented in New Mexico.  Blogger Bill Simon, writing today at Peach Pundit, had this say:

If repealing such laws causes more morons to drink and slam their car into a telephone pole while driving on Sunday, I call it weeding out the gene pool.

Of course, drunk drivers hit more than just telephone poles and hurt more than just themselves.  Should the danger of increased drunk driving crashes and fatalities give us pause?  Let me know what you think. 

[UPDATE]  In a radio interview today, Governor Sonny Perdue came out in opposition to the Sunday sales bill, saying he would likely veto the measure if it was passed by the General Assembly.  His reasoning:  “Think of it this way…It really helps you plan ahead for the rest of your life — buying on Saturday, rather than Sunday. Time management.”

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