The 13th World Conference on Tobacco OR Health

Objective: The objective of this study is to examine the effects of cigarette tax avoidance on smokers' quit attempts, and related revenue loss in New York State.

Methods: Data used in this study come from 1,387 smokers in New York State who completed the 2004 New York State Adult Tobacco Survey. The percentages of buying low/untaxed cigarettes were calculated. Multivariate logistic regression was used to examine the characteristics of smokers who routinely reported purchasing low/untaxed cigarettes and the effect of tax avoidance on subsequent quit attempts. Results from these analyses were used to estimate the impact on government revenues in New York State in 2004.

Results: Overall, 40%, 30%, 16% and 62% of the New York smokers reported ever buying cigarettes from an Indian reservation, outside the state, through the Internet or a toll-free number, and any of the above venues in the last year, respectively. Factors associated with cigarette tax avoidance behaviors include older age, white race, heavier smokers, and living closer to a low/untaxed venue. Compared to smokers who paid full prices, those who reported buying low/untaxed cigarettes “all the time” were less likely to make quit attempts (OR=0.69, p=0.03). In 2004, New York State failed to collect an estimated $506 million due to low/untaxed cigarette sales.

Conclusion: Cigarette tax avoidance is widespread in New York State, resulting in huge revenue losses and possibly undermined cessation. Policies are needed to control tax avoidance behaviors.