North Dakota-bought cigarettes illegal in Montana due to tax issue“Don’t take cigarettes out of the state,” reads a sign along Interstate 94 near the Montana-North Dakota border.
“Don’t take cigarettes out of the state,” reads a sign along Interstate 94 near the Montana-North Dakota border.
The sign is in reference to a Montana law which prohibits cigarettes without tax stamps on the packaging from being sold, used, consumed or brought into the state, said Lee Baerlocher, Montana Department of Revenue bureau chief. It also limits the number of cigarettes brought into the state with other state’s tax stamps to three cartons or 30 ounces of tobacco
Officer Will Vance with the North Dakota Highway Patrol, Deputy Tax Commissioner Ryan Rauschenberger, and the North Dakota Attorney General’s Office say they are unaware of any incidents of smuggling.
In North Dakota, the tax on a package of 20 cigarettes is 44 cents, according to the North Dakota Tax Department. The tax on a carton of 200 cigarettes is $4.40.
In Montana, the tax is $1.70 per package of 20 cigarettes, according to the Montana Department of Revenue website. The tax is proportionally adjusted for different size packages.
North Dakota does not use tax stamps because the cigarette tax is paid to the state on a monthly report by licensed cigarette wholesalers.
“From my point of view, why would you drive across the border to get a few packs?” said Linette Miller, who owns Miller’s Corner in Sidney, Mont., along with her husband Greg. “When you consider the gas, mileage and time, for me it wouldn’t be worth it just buy them here.”
She added the tax stamp law hasn’t affected the volume of tobacco sales at the store.
“We do sell a ton of cigarettes with tax stamps on them,” Linette said. “The volume we sell has always been steady. We haven’t seen it pick up or slack off drastically, most people buy one or two packs, but sales add up quickly,” Greg added.
Other stores report the same.
Mike Mueler, manager of Superpumper in Sidney, Mont., said though he has only been the manager in Sidney for three weeks he says the sale of tobacco products is fairly steady.
Baerlocher said the deterrents Montana has come up with to stop the smuggling are:
A person caught with less than $1,000 in stampless cigarettes will be charged with a misdemeanor and be forced to pay a fine of between $100 and $500 and or serve between 30 days and six months in jail. A second offense is considered a felony punishable by imprisonment for a term exceeding one year and or a fine not to exceed $50,000.
A person caught with more than $1,000 in stampless cigarettes is subject to the seizure of the vehicle, or other mode of transportation used in connection with the cigarettes.
Besides smuggling cigarettes across state lines, another concern in North Dakota is smuggling cigarettes across Native American reservation lines.
But Lucy Huntsalong of Mandaree, a worker at Mec-Store, said she doesn’t see it often.
“The price of cigarettes is really about the same on and off the reservation,” Huntsalong said.
Cigarettes or tobacco products imported or purchased by a Native American operating a retail tobacco business within an Indian reservation and who is an enrolled member of the tribe residing on that reservation is exempt from tax when the products are delivered to the Native American retailer on the reservation. Retail businesses that purchase untaxed cigarettes or tobacco products from a Native American retailer must register to report and pay the applicable cigarette or tobacco tax.
In North Dakota, individuals that are not enrolled members of the tribe that purchase from a Native American retailer must report and pay tax on purchases for their own use, according to the North Dakota Tax Department website.
A call to the Montana Highway Patrol was not returned.