Press Release from the D.C.
Office of the Chief Financial Officer
Contact: Jacqueline Wallace, 202-442-6483
The
District of Columbia Office of Tax and Revenue (OTR) today announced an
aggressive new operation to rid the District of the illegal cigarette
trade.
OTR has teamed with federal, local and other District government agencies
to vigorously enforce District laws against the sale of contraband cigarettes
and cigarette sales tax violations. The District sales tax on cigarettes
is 65 cents per pack.
According to Herbert J. Huff, Deputy Chief Financial Officer for Tax and
Revenue, the District is slated to receive nearly 1.2 billion to be paid
in increments of $48 million per year over the next 25 years under the
terms of the tobacco manufacturers' master settlement agreement. However,
the agreement also provides that the sale of illegal cigarettes in the
District could jeopardize tobacco settlement revenues.
The stepped-up enforcement program comes in the wake of legislation passed
recently by the D.C. City Council making the sale of "gray market" cigarettes
illegal in D.C. Gray market cigarettes are cigarettes intended to be sold
in another country but which are being illegally sold within the U.S.
Cigarette license holders previously were notified of the investigation
and urged to dispose of any contraband cigarettes. Licensees have been
given another 30 days from today to voluntarily comply with the law. For
purposes of the investigation, the actual start date of the operation
was not disclosed.
Partners in the enforcement effort include neighboring states, the Bureau
of Alcohol, Tobacco and Firearms, the D.C. Metropolitan Police Department,
the D.C. Department of Consumer and Regulatory Affairs and the D.C. Department
of Health.
Violations carry civil and criminal penalties up to $5000 and/or imprisonment
for up to 3 years. Contraband cigarettes are subject to immediate seizure
and forfeiture. Conviction may involve the revocation of the license to
affix D.C. tax stamps.
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