CASPER — For every 100 cigarettes smoked in Wyoming, an additional 24 cigarettes are smuggled out, mostly likely legally purchased in Wyoming and taken for personal use to neighboring states with higher cigarette taxes.
That’s according to a March 19 report about cigarette smuggling, which said Wyoming’s rate of “outbound smuggling,” or cigarettes leaving the state, is second in the country.
The report was released by the Washington D.C.-based Tax Foundation — which states tax policy should be simple, transparent, stable and low — and the Midland, Mich.-based Mackinac Center for Public Policy — which describes itself as doing economic research that draws support from market-oriented libertarians, moderates and conservatives.
In 2012, Wyoming retailers sold 34.9 million packs of cigarettes, said Michael LaFaive, director of fiscal policy at the Mackinac Center.
Of these, 28.5 million were estimated to have been consumed in the state and 6.3 million left the state. The center describes the 6.3 million as smuggled because the people who sold them didn’t pay taxes to the states they live in.
“The difference has to be explained by smuggling,” LaFaive said. “Where else are the cigarettes going?”
The Mackinac Center used a statistical model to compare legal, per capita sales of cigarettes with smoking rates for Wyoming tabulated by the Centers for Disease Control and Prevention, LaFaive said.
While cigarettes in some low-tax states end up on the streets of places such as New York City, where a pack costs upward of $14, Mackinac Center researchers believe the cigarettes leaving the Cowboy State aren’t part of organized rings. They used a statistical tool to tease out casual versus commercial smuggling. Since Wyoming isn’t close to the population centers where cigarettes are the most expensive, the smokes are likely going to neighboring states by individual smokers.
In Wyoming, the tax on a pack of cigarettes was 60 cents in 2012. In Utah and Montana, it was $1.70 a pack. In South Dakota, it was $1.53. In Colorado, it was 84 cents. In Nebraska, it was 63 cents, according to the Tax Foundation.
In Evanston, near the Wyoming-Utah border, plenty of cars with Utah plates can be seen at liquor and convenience stores. Some of the shoppers buy cigarettes, but city officials have no way to track how many Utahns are buying cigarettes, said Evanston Deputy City Clerk Nancy Stevenson.
“We have a lot of people who travel through here,” she said. “I know a lot of people travel through here to buy alcohol and fireworks.”
Utahns can buy out-of-state cigarettes and take them back to the Beehive State — if they’re using them and not reselling them, said Charlie Roberts, a spokesman for the Utah State Tax Commission.
It’s illegal to sell out-of-state cigarettes. The fine for selling a pack of cigarettes without a Utah stamp is $25 a pack, Roberts said.
The Utah Tax Commission has no studies on whether Wyoming cigarette sales impact Utah sales, Roberts said.
However, since Utah’s cigarette tax increased three years ago from 69 cents a pack to $1.70, revenues have almost tripled and the number of packs sold decreased.
“The legislative intent was to decrease the number of people smoking,” he said.
LaFaive, of the Mackinac Center, advocates lower cigarette taxes and doesn’t think Wyoming should hike its tax to end smuggling.
“In fact, officials in Virginia have asked the same question, ‘Why are we worried about cigarette smuggling? They’re enriching our treasury,’ ” he said.