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Arizona ranks second for 'smuggled' cigarettes

PHOENIX -- Arizona ranks second in the nation for smokers who found a way around a state tax on their cigarettes, a study said.

A study by the Michigan-based Mackinac Center for Public Policy said that, as of 2012, 51.5 percent of the cigarettes smoked in Arizona were purchased in ways that avoid paying a state sales tax of $2 per pack, a 19 percent jump from 2006. There are several places where these "smuggled cigarettes" are sold.

"Indian reservations, Mexico and what we think, but have not tagged a number for yet, is bonded warehouses," said Michael LaFaive, director of Fiscal Policy for the Mackinac Center for Public Policy. "A bonded warehouse is sort of a weigh station for products that come into the country from overseas."

LaFaive said that one of these warehouses is believed to be located near Phoenix.

"We think that about 19 percent of the smuggling that occurs inbound into Arizona is from your border with Mexico," LeFaive said. "However, we think that a portion of that, which is captured as international smuggling, might actually be from bonded warehouses."

Todd Nesbit, LeFaive's assistant, said a majority of the "smuggled cigarettes" are purchased as a direct result of Arizona's cigarette sales tax.

LaFaive said there are two ways to reduce the number of cigarettes being "smuggled" into Arizona: Doing away with the sales tax or getting people to quit smoking.

New York topped Arizona in the survey, with nearly 57 percent of the cigarettes being smuggled into that state. New York has a $4.35 per pack tax on cigarettes. New Mexico is right behind Arizona, followed by Washington, Wisconsin and California, respectively.

About the Author


Years with the company: I started on January 2, 2006.

Education: I was born in San Antonio, Texas, but we moved to Phoenix when I was one-year-old in 1957. I grew up here and graduated from Alhambra High School and attended Phoenix College.

Family: I live in north Phoenix with my wife Rene' and my son Devin.

Favorite food: Lots of favorite food, but our favorite restaurant is Fajitas.

Favorite spot in Arizona: The Little America Hotel in Flagstaff.

Favorite news memory: We have to go back to October 15, 1979. I was a country music air personality at KROP Radio in Brawley, California, when we had a 6.7 earthquake. Thankfully, there were no deaths and only minor injuries, but the entire community was pretty freaked out and listening to the station on their transistor radios. I would not want to go through an earthquake again, but it sure was a great night to work in radio and see how it can make a difference in people's lives.

First job: Working as a stringer for 'The Arizona Republic' at high school football games. My first real job was flipping burgers at the old Sandy's Hamburgers at 51st Avenue and Indian School Road. My first radio job was as announcer at KALJ radio in Yuma in 1977.

First concert: My Dad took me to see Jimmy Dean at the Arizona State Fairgrounds in the 1960's. It was before the Coliseum was built. The only thing I remember is Jimmy Dean singing his big hit "Big Bad John."

Favorite sports team: Phoenix Roadrunners minor league hockey. My dad took me to a game when I was in grade school, and I was hooked. I wanted to be a radio hockey play-by-play man. I used to take my cassette recorder and sit up in the rafters of the Coliseum and do play-by-play. It was great later in life to also take my son to Roadrunners games. Too bad the team just folded, I'll miss them. (Going to the Coyotes is fun, but they're not "my" team.)

Outside interests: My family and I are active in our church - Shiloh Community Church in Phoenix. Devin is a high school student at Scottsdale Christian Academy. He plays on the baseball, football, and basketball teams and sings in the choir. Obviously, we keep busy trying to go to all his events! We enjoy going to movies, sporting events, and long road trips. We like to vacation at the Beach Cottages in the Pacific Beach area of San Diego. And I love to play catch, basketball, football with my son.

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