Cook County cracks down on cigarette-tax dodgers

September 30, 2011

(WBEZ/Kate Dries)
Cigarettes recently confiscated by the Sheriff's office for being sold without tax stamps.

Cook County has found a new way to make money: by cracking down on stores that aren't paying cigarette taxes. At the urging of Cook County Board President Toni Preckwinkle's office, the sheriff's office has fined retailers almost $400,000 in the first three weeks of the project. In 2010, the county collected $1.6 million for the entire year.

Sheriff Tom Dart said Friday that in 2006, the county made $200 million from cigarette taxes. But in 2010, that number was down to $126 million. That $74 million decrease can't just be attributed to factors like the struggling economy and tighter regulations on smoking, reasoned Preckwinkle.

"This is not insignificant money," said Dart. "So for those who might think, oh we've grabbed a couple of cigarettes here, not a big deal. The numbers are somewhat staggering."

Though the Department of Revenue upped their investigations into those avoiding the Tobacco Ordinance by starting the Tobacco Investigation Unit in 2009. But it was the addition of five officers from the Sheriff's office that has led Preckwinkle to express confidence that fines could bring in money for the cash-strapped county. They plan to up that number to 10 officers by 2012.

"Two-thirds of our budget is healthcare and criminal justice, public safety," said Preckwinkle. "So, to the extent that we're able to increase, and hopefully increase dramatically, compliance in this area, it'll have an impact on our ability to deliver services in those two critical areas that are our responsibility."

The Sheriff's office has also received a grant of $25,000 in "seed money" from various cigarette companies to help them pinpoint those illegally counterfeiting cigarettes.

Dart said smaller, less established convenience stores are typically the retailers that charge the full price for cigarettes, including taxes, and pocket the difference. Tax on a pack of cigarettes in Cook County in $2.

Because the county hasn't collected the money yet, Preckwinkle said it's too early to consider it viable for her new budget plan, due in October.

Offenders have the choice of attending an administrative hearing, or simply paying the fine upfront. The county has also started a Cigarette Tax Reward Program, which asks Chicagoans to report retailers they believe aren't paying their taxes, denotable by the abscence of a Cigarette Tax Stamp on the bottom of packs. Successful tips can yield up to $1,000.