| Research and Educational Projects at the Maryland State Archives |
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| 2000/08/12 |
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| Contact the Department of Special Collections for location. |
"Butt Out: Schaefer's War Against Cigarette Smugglers."
The Daily Record, 12 August 2000.
This article states that, until Schaefer became comptroller in 1998,
the problem of cigarette smuggling in Maryland had been ignored.
Smugglers were taking advantage of a difference in tobacco taxes
among East Coast states to illegally ship truckloads of cigarettes
from state to state without the proper permits or bills of lading,
so that the sales tax was being evaded in Maryland. In addition to
cracking down on the cigarette smugglers, Schaefer is also using the
comptroller's office to arrest people who are buying furniture tax-free
in North Carolina and reselling it in Maryland without charging
Maryland state taxes.
His reasons are twofold:
1) To collect money legitimately due the state
2) To protect Maryland businesses and keep them comptetitive.
During FY 2000, Schaefer's initiatives in this area saved the state
$120,886 in taxes, according to the article.
But a big problem is that state law says that the state must
resell the cigarettes, so the state auctions them off to the highest
bidder, in effect becoming a cigarette smuggler itself.
But in many cases the cigarette manufacturers themselves buy
the cigarettes back and then destroy them because they are stale.
This way they ensure that their customers are buying fresh cigarettes.
Critics argue that this process costs the tobacco companies a lot of
money and that the state should change the law and be allowed
to destroy the cigarettes. |
| buttout.tif |
