Contraband cigarettes and tobacco products with a retail value of approximately $1.97 million were destroyed Wednesday in Yolo County.
The event, described by California State Board of Equalization member Fiona Ma as the largest one-time destruction of contraband cigarettes and tobacco products in the state’s history, was held at the Yolo County Central Landfill in Woodland. The products destroyed were confiscated through the service of three search warrants and 503 administrative seizures conducted from Bakersfield to the Oregon border between 2001 and 2014, according to a news release from Ma’s office.
State Board of Equalization investigators worked with the U.S. Attorney’s Office, the California Attorney General’s Office and the Bureau of Alcohol, Tobacco Firearms and Explosives to seize more than 30 tons of untaxed tobacco products as part of “Operation Big Pinch.” The task force has investigated and seized other tobacco products from illegal sales operations. Left unabated, authorities said, excise tax lost to these businesses operating in the underground economy would have equaled or exceeded $280 million as of April 2014.
“The underground economy robs our state of much needed revenues to fund cancer research, hospital and early childhood programs at the state and federal level,” Ma said in a written statement.
The Cigarette and Tobacco Products Licensing Act of 2003 requires each seller of cigarettes and tobacco products to be licensed. Each year since then, Board of Equalization inspectors have conducted about 10,000 inspections statewide to ensure compliance and seek out unstamped product or other cigarette and tobacco product tax violators, authorities said.
In California, there are two taxes on cigarettes: an excise tax of 87 cents per pack and a minimum sales tax of 7.5 percent. In some jurisdictions, the sales tax rate is as high as 10 percent. As of July 1, the tax on other tobacco products will be 28.13 percent.
Tobacco products include all forms of cigars (except “little cigars”) smoking tobacco, chewing tobacco and snuff, as well as other products containing at least 50 percent tobacco. The tax, which is part of the cigarette and tobacco products surtax, is paid by tobacco products distributors.