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Multistate Tax Update — November 6, 2014

In our Oct. 23, 2014 Multistate Tax Update, we wrote about Minnesota’s plans to increase its cigarette tax in 2015, and the potential rise in cigarette smuggling. Minnesota is not the only state struggling to combat the ill effects of this black market. Earlier this year, Bloomberg.com reported that between $7 billion and $10 billion in state and federal tax revenue is lost each year because of smuggling, up from $5 billion a few years ago, as measured by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). The ATF cites the smuggling of cigarettes between states to take advantage of tax differentials as the most pervasive type of tobacco-related tax avoidance schemes.