States have lost $5 billion in revenue this year to a black market for cigarettes fueled by huge tax disparities across the country.
Cigarette smugglers buy cigarettes in states with relatively low cigarette tax rates and selling them at a reduced, but still profitable price in states with high cigarette tax rates. They can buy a pack for about $5 in Virginia and sell it in New York for $8, making a huge profit and satisfying consumers used to paying $12 per pack.
Hardened criminals, organized crime networks and even terrorists are profiting from this black market and costing states billions. A ticker running on a website created by former federal agent Rich Marianos currently estimates that states have lost $5,071,308,158 so far this year.