Bredesen: Cigarette tax surveillance is right thing to do

Gov. Phil Bredesen said today he remains confident that his administration’s cigarette tax estimates will meet projections and supported his revenue department’s surveillance of possible cigarette smugglers.

Earlier this year, Bredesen pushed for, and successfully passed in the Legislature, a 42-cent increase in the state’s cigarette tax.

That pushed Tennessee’s cigarette tax above all of its eight neighbors’ taxes. As a result, some Tennesseans were driving across state lines to buy their smokes.

Recently, the Department of Revenue started a surveillance program to punish those driving more than two cartons of cigarettes into Tennessee without appropriate tax stamps.

Bredesen said the revenue department and Commissioner Reagan Farr is “doing what they ought to do, which is go out and show the flag a bit.”

“When that commissioner held his hand up and took the oath of office, he agreed to enforce the laws of the state and one of the laws of the state is you can’t run across to Kentucky and buy your cigarettes free of Tennessee taxes,” Bredesen said. “[Farr’s] doing a good job of that.”

Bredesen said he eventually sees the trend of Tennesseans driving into neighboring states to buy cigarettes subsiding.

“The experience in other states that we looked at has been that when a tax like this first comes in people are going to go across the state line and try to bring things back,” Bredesen said. “It isn’t too long before they figure out that’s probably more expensive than buying gas at $3 than buying the cigarettes locally.”

Tennessee’s cigarette tax is 62 cents per pack. Kentucky’s is 30 cents per pack.

Tennessee’s increased cigarette tax is estimated to take in about $230 million this year, most of it targeted toward K-12 education.

So far, in what has been mainly attributed to tobacco retailers stockpiling tax stamps, the cigarette tax revenues for the month of July were $14 million less than projected.