Starting today, state Department of Revenue agents will begin stopping Tennessee motorists spotted buying large quantities of Cigarettes in border states, then charging them with a crime and, in some cases, seizing their cars.
Critics say the new “cigarette surveillance program” amounts to the use of “police state” tactics and wrongfully interferes with interstate commerce. But state Revenue Commissioner Reagan Farr says his department is simply doing its job, enforcing a valid state law while protecting Tennessee retailers who properly pay state taxes.
Agents have already been watching out-of-state stores that sell Cigarettes near the Tennessee border to “get a feel where problem areas are,” Farr said.
While declining to be specific, the commissioner said “problem areas” are generally along interstate highways with exits near the Tennessee border.
The idea is for the monitoring agent to spot a person buying Cigarettes in volume at an out-of-state market, then departing in a vehicle with Tennessee license tags. Starting today, monitoring agents spotting such a suspect will call an arresting agent who will stop the car when it enters Tennessee, he said.
The agents will work “in roving teams at random times,” he said.
“This shows once again that Reagan Farr and the Department of Revenue are More interested in turning Tennessee into a police state than doing their job of collecting taxes,” said Drew Johnson, president of the Tennessee Center for Policy Research.
Farr said the program is partly an “education initiative” to make people aware of tobacco tax provisions in state law and a response to complaints from Tennessee tobacco retailers about “streams of Tennessee license plates crossing the border” from out-of-state retailers.
“I don’t think (Johnson) or anyone else wants to see the commissioner of revenue deciding which laws passed by the Tennessee Legislature to enforce and which not to enforce,” Farr said. “If that were the case, they (legislators) could just tell the commissioners ‘get me $11 billion’ wherever you think best.”
Tennessee’s cigarette tax went from 20 cents per pack to 62 cents per pack effective July 1. All eight states that border Tennessee have lower tax rates, meaning smokers can save up to 45 cents per pack — $4.50 for a 10-pack carton — by purchasing out of state.
The border states with the loWest cigarette taxes are Missouri with 17 cents and Mississippi at 18 cents. The highest is Arkansas with 59 cents.
Kentucky and Virginia both tax Cigarettes at 30 cents a pack, North Carolina at 35 cents, Georgia at 37 cents and Alabama at 42.5 cents.
Under state law, bringing More than two cartons of Cigarettes into the state without paying Tennessee taxes is a “Class B” misdemeanor, carrying punishment of up to six months in jail and/or a $500 fine. Bringing 25 or More cartons is a “Class E” felony, with minimum penalty of one year in prison and a maximum of six years plus a fine of up to $3,000.
In addition, the specific state statute dealing with untaxed Cigarettes provides that vehicles used to transport More than two cartons “are consideRed contraband and are subject to seizure,” says a Department of Revenue statement.
Farr said that agents have been instructed to seize any vehicle carrying More than 25 cartons of Cigarettes without Tennessee tax stamps. In cases where three to 24 cartons are involved, he said vehicle seizure is “at the officer’s discretion.”
Rep. Stacey Campfield, R-Knoxville, said he sees inconsistency in the enforcement program.
“This administration has been very willing to turn a blind eye to illegal aliens pouring into our state, yet, when a natural Tennessean brings a couple of cartons of smokes across the state line, they want to arrest them,” Campfield said.
He and Johnson both said the program appears to involve the state in interstate commerce, an area where the federal government is granted sole authority by the U.S. Constitution. Johnson said he hopes an arrested motorist will file a lawsuit against the program, and further pRedicted the state would lose.
Farr said the program does not run afoul of federal restrictions on state interference with interstate commerce.
“We’re not regulating the purchase of anything in another state,” he said. “We’re regulating the possession of contraband in Tennessee.”