Maryland Cigarette Taxes

When Maryland doubled the cigarette tax to $2 a pack, some residents are going to quit. Smugglers have a motive to step up their activities.

Since the tax grew, agents with the Maryland Comptroller’s Office have seized more than 46,000 packs of contraband cigarettes. Maryland has one of the highest tobacco taxes in the nation; neighboring states have some of the lowest.

Jeffrey A. Kelly, director of the comptroller’s field enforcement division said: “It’s just become even more profitable for smugglers now. The agents on surveillance duty also have spotted more Maryland residents in Virginia buying cigarettes.”

Gov. Martin O’Malley proposed raising a number of taxes, including the tobacco tax, as part of a broader package to cover a $1.7 billion budget shortfall.

Del. Anthony J. O’Donnell, the House minority leader from Southern Maryland said: “The Democrats in their zeal to raise taxes on cigarettes have driven Lord knows how much commerce across the boarder. The tax increases are going to hurt us in ways we haven’t even contemplated yet. We’re just starting to see ways we knew they would have an impact.”

Comptroller Peter Franchot said: “Tobacco tax collections this year have been substantially lower than expected. He noted that the strained economy has prompted some consumers to cut back.”

At the Citgo gas station in the Western Maryland city of Brunswick, manager Cindy Furr said that her cigarette sales have dropped "dramatically" because customers can cross the Potomac River and buy smokes more cheaply at a convenience store a mile away in Virginia.

Danny McGoldrick, a researcher with the tobacco-free campaign, said: “My group encourages states to conservatively estimate the boon to revenue after a tax increase. Fewer smokers translate into lower health care costs, another burden on state budgets.”

Under the law, Maryland residents can bring into the state only two packs of cigarettes not taxed here. Nonresidents are limited to one carton of cigarettes, and they must be passing through the state.