Revenue plans for cigarette surveillance at state line

NASHVILLE, Tenn. - The Tennessee Department of Revenue’s Special Investigations Section will be conducting surveillance of out-of-state tobacco retailers located near the state line for Tennessee residents purchasing cigarettes. On July 1, 2007, Tennessee’s cigarette tax increased from 20 cents per pack to 62 cents per pack.

“As a result of this legislation, Tennesseans may travel to neighboring states to purchase cigarettes in order to avoid paying Tennessee cigarette tax,” said Revenue Commissioner Reagan Farr. “Tennesseans should know that the law requires cigarettes purchased outside of the state to bear a Tennessee tobacco stamp, otherwise the cigarettes may be considered contraband.”

Possessing more than 20 packs (or two cartons) of cigarettes not bearing Tennessee revenue stamps is a misdemeanor.  Such products and any vehicle(s) used to transport them are subject to seizure. Possession of more than 25 cartons of untaxed cigarettes is a Class E felony.

“If Revenue agents believe that an individual is transporting more than two cartons of cigarettes into Tennessee, the vehicle carrying the cigarettes will be stopped and searched,” Commissioner Farr said. “If more than two cartons are found, the cigarettes will be seized and agents have the discretion to make arrests and seize the vehicle.”

Public Chapter 368 increased the tax on cigarettes from $0.20 to $0.62 per pack. Additional revenue from the increase is earmarked for education (approximately $195 million annually), agricultural enhancements ($21 million annually) and trauma centers statewide ($12 million annually). The Department of Revenue administers the collection and enforcement of Tennessee tobacco taxes.