TRENTON – A measure sponsored by Senator Joseph F. Vitale which would direct the Division of Treasury to look at a more secure cigarette tax stamp to prevent counterfeiting was approved today by the Senate by a vote of 38-0, receiving final legislative approval.
“As we’ve seen in this year’s budget deliberations, every penny of existing tax revenue is important to meeting the obligations of the State of New Jersey,” said Senator Vitale, D-Middlesex, and the Chair of the Senate Health, Human Services and Senior Citizens Committee. “However, every year, we lose millions of dollars in uncollected taxes due to counterfeit tobacco tax stamps. We need to do a better job in securing cigarette tax stamps, and ensuring that it’s harder for forgeries to get into the retail stream.”
The bill, S-1545, would direct the Division of Treasury to study the use of counterfeit-resistant tax stamps to be used on cigarettes sold in New Jersey. The new stamps would have hidden or encrypted information contained within them, indicating the name and address of the cigarette distributor, the date the pack of cigarettes was stamped and the cash value of the stamp. The bill would also require that these stamps be readable and traceable from the point of stamp production to the point of sale of the cigarettes.
“Most smokers who purchase cigarettes in New Jersey are looking to do the right thing and pay their fair share in taxes,” said Senator Vitale. “The issue is that forgeries have gotten so sophisticated that many retailers pass on counterfeited cigarettes without even knowing it. By incorporating new technologies in securing and tracking packs of cigarettes, we can do a much better job in weeding out counterfeiters.”
Senator Vitale noted that New Jersey loses out on millions in tax revenue due to counterfeit cigarette stamps and smuggled cigarettes. According to estimates from one counterfeit-resistant stamp manufacturer, nearly 35 percent of cigarette packs entering New Jersey for sale are counterfeit, either because they are unstamped or bear a counterfeit stamp. The State could collect an estimated $20 – 40 million annually by moving to a more secure, counterfeit-resistant stamp.
“More than half of New Jersey’s cigarette tax goes to health care programs for uninsured residents in need,” said Senator Vitale. “Counterfeiting cigarette tax stamps isn’t a victimless crime, and every forged pack sold steals money from those who can least afford the hit. Through the latest in security technology, we can reclaim millions of dollars in existing taxes, and put them to use for New Jerseyans in need of the State’s healthcare safety net.”
The bill now Governor’s Desk to be signed into law. It was approved by the Assembly earlier today by a vote of 77-2.