WASHINGTON, DC - 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 DC Council making the sale of "gray market" cigarettes illegal in the District. Gray market cigarettes are cigarettes intended for sale in another country but which are being illegally sold within the United States.

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 federal Bureau of Alcohol, Tobacco and Firearms; DC Metropolitan Police Department; DC Department of Consumer and Regulatory Affairs; and DC 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 DC tax stamps.