Use of Tobacco Tax Stamps to Prevent and Reduce Illicit Tobacco Trade — United States, 2014

From: Centers for Disease Control and Prevention

Jamie Chriqui, PhD; Hillary DeLong, JD; Camille Gourdet, JD; Frank Chaloupka, PhD; Sarah Matthes Edwards, MSPH; Xin Xu, PhD; Gabbi Promoff, MA


A critical facet of a comprehensive approach to tobacco stamping is the inclusion of all sources of tobacco in this practice, including sales by Native American tribes. Several states have entered into agreements with Native American tribes on general tobacco-related issues or have negotiated specific tax agreements with tribes to reduce the avoidance of tobacco excise taxes by nonmembers, including application of tax stamps to products sold on-reservation. Although tribal members who purchase tobacco on-reservation are exempt from state taxation, nonmembers purchasing on-reservation are not exempt from state taxation; these illegal purchases by nonmembers are a significant source of illicit trade because of challenges in collecting taxes on sales to nonmembers. [Note omited, emphasis added]

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