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Vitale Bill To Prevent Against Counterfeit Tobacco Tax Stamps Approved

TRENTON – A measure sponsored by Senator Joseph F. Vitale which would require a more secure cigarette tax stamp to prevent counterfeiting was unanimously approved by the Senate Health, Human Services and Senior Citizens Committee today.

“Every year in New Jersey, counterfeit cigarette tax stamps account for hundreds of millions of dollars in lost tax revenue,” said Senator Vitale, D-Middlesex, and the Chair of the Committee. “We need to step up our State’s anti-counterfeiting measures, to make sure that people are meeting their legally-binding tax responsibility. We cannot cede millions of dollars in revenue because our anti-counterfeiting technology is severely behind the times.”

The bill, S-1545, would require 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.

“The current cigarette tax stamp showcases anti-counterfeiting technology which was state-of-the-art in 1948, when the cigarette tax was first enacted,” said Senator Vitale. “In the sixty years since New Jersey first required tax stamps, counterfeiting has gotten a lot more sophisticated. We need to take advantage of current security measures and anti-counterfeiting technology to keep ahead of tax scofflaws seeking to get around New Jersey’s cigarette tax.”

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 total revenue loss due to counterfeit cigarette tax stamps is estimated to be more than $260 million annually.

“More than half of New Jersey’s cigarette tax is dedicated to health care programs which cater to the needs of the uninsured or programs designed to help people quit smoking,” said Senator Vitale. “Counterfeiting cigarette tax stamps is not a victimless crime, but hinders the State’s effort to provide for these worthy programs which make a difference in the lives of New Jerseyans in need. We need to take advantage of the latest technology to ensure that the people of New Jersey aren’t cheated out of millions in tax revenue.”

The bill now heads to the Senate Budget and Appropriations Committee, before going to the full Senate for consideration.

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