States Smoking the Most Smuggled Cigarettes

4. New Mexico
> 2013 consumption smuggled: 46.1%
> 2013 cigarette tax rate: $1.66 (17th highest)
> Smoking rate: 19.1% (23rd highest)
> Pct. point change smuggling rate (2006-2013): 6.2 (15th highest)

Cigarettes are smuggled primarily to dodge taxes. However, while more than 46% of all cigarettes consumed in New Mexico were smuggled into the state — the fourth highest share nationwide — the smuggling problem has not hampered tax revenue growth. New Mexico’s revenue from tobacco taxes grew by nearly 322% between 2002 and 2012, an exceptionally high rate compared to other states with smuggling problems, and the sixth highest in the country. The state’s cigarette tax of $1.66 per pack was not especially high in 2013, although it was higher than the national cigarette tax rate of $1.44. New Mexico does not border any states with net outflows of smuggled cigarettes. However, state residents can easily access nearby Indian reservations, where cigarettes are frequently sold at a steep discount.

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