The Tax Foundation says cigarette smuggling has gone up 1.1 percent in Illinois to a total of 20.9 percent of the state's cigarette market. (WJBC file photo)

By Jim Anderson/Illinois Radio Network

The rate of cigarette smuggling has jumped in Illinois over the last two years.

This is according to the Tax Foundation, which estimated cigarette consumption based on surveys and compared it to cigarette taxes collected.

“Because state, local and municipal taxes have been hiked by a total of $2.50 per pack between 2012 and 2014, we’ve seen smuggling in Illinois jump from our last data release from 1.1 percent of the market to now 20.9 percent of the market,” said Scott Drenkard, the foundation’s manager of state projects.

The smuggling consists of individuals buying cigarettes in low-tax states for their own consumption, which is generally legal, to commercial operations that haul in truckloads of smokes that are either not taxed or were taxed in other states, and that is illegal.

Drenkard says the latter is a problem because it deprives states of revenue, and because it breeds disrespect for the law, and possibly involves organized crime, or payoffs to cops and revenue inspectors to look the other way.

It doesn’t matter whether cigarette taxes are absolutely high or low; what matters in terms of incentivizing the black market is that there’s enough of a gap between taxes from one jurisdiction to another that there is money to be made in exploiting the gap.

Drenkard says the savings on smuggled cigarettes usually are not passed along to consumers, but are pocketed by the businesses involved.