Herb Kohl: “the proceeds of cigarette smuggling from low tax States has developed into a popular means of generating revenue for…”

“the proceeds of cigarette smuggling from low tax States has developed into a popular means of generating revenue for organized crime and even terrorist organizations. A recent investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, BATFE, disrupted a smuggling scheme between North Carolina and Michigan, where the revenue generated was being funneled to Hezbollah, a terrorist organization. It is evident that the consequences of permitting this behavior to continue unchecked cannot be underestimated. To make matters worse, this problem is on the rise. According to the BATFE, 10 cigarette smuggling cases were initiated in 1998. That has grown to approximately 160 in 2002. Moreover, the sale of tobacco products over the Internet facilitates the avoidance of State cigarette taxes, denying States the ability to collect tax dollars they are owed--money the States need now more than ever. The PACT Act take a commonsense approach to addressing these problems. It increases penalties, provides more tools for enforcement, and closes loopholes in current law. These moderate, but important, changes will further enable Federal, State, local, and tribal officials to crack down on tobacco smugglers and ensure that Internet tobacco sellers pay applicable taxes.”