The Michigan State Police (MSP) announced that investigators completed 264 inspections at party stores, gas stations, smoke shops and other locations statewide during the month of January in an effort to ensure compliance with the Michigan Tobacco Products Tax Act (Public Act 327 of 1993).
During the inspections, troopers seized $116,750 in illegal tobacco products and $169,550 in illegal non-tobacco property for a combined total of $286,300.
Troopers discovered tobacco violations, including missing invoices, untaxed other tobacco products, unstamped cigarettes, Gray Market cigarettes (cigarettes manufactured specifically for sale outside of the U.S.) and the selling of ‘loosies’ (single stick cigarettes).
In many instances, tobacco inspections lead to the discovery of other illegal activity. Non-tobacco violations recorded during this effort include violations for marijuana, a ‘bootleg’ DVD operation, possession of narcotics paraphernalia and liquor and Bridge Card violations. Troopers also recovered illegal items including K2/Spice and a marijuana dispensary in the form of a vending machine.
In the metro Detroit area, the MSP has a full-time team of investigators dedicated to conducting tobacco tax inspections. While conducting inspections, troopers discovered a smoke shop owner operating as a licensee without a proper license, a smoke shop mixing tobacco to create its own blends and a manual cigarette-rolling machine.
While conducting an inspection at a store in the west Michigan area, troopers discovered the owner was selling hundreds of counterfeit name-brand items, including hats, jackets, shoes, sunglasses, purses, jewelry and colored contact lenses. The illegal merchandise seized had a retail value of more than $95,000.
During the inspection of a party store in the Lansing area, troopers seized 196 pairs of counterfeit Nike shoes, 580 counterfeit sports team hats, 69 counterfeit Ralph Lauren Polo tops and 22 counterfeit Ralph Lauren Polo sweatsuits for a retail value of more than $44,900. During an inspection at a nearby party store, 298 pairs of counterfeit Nike shoes and 21 pairs of counterfeit Louis Vuitton shoes were seized with a retail value of more than $29,000.
Under Michigan law, it is a violation to possess, acquire, transport or sell any quantity of untaxed tobacco unless properly licensed. Violators of the Tobacco Products Tax Act are subject to up to five years imprisonment, along with seizure of assets from anyone possessing illegally purchased tobacco, along with fines and penalties.
Tobacco products tax evasion and fraud is estimated to cost the State millions of dollars in potential revenue. To better combat tobacco tax evasion and diversion, the MSP, Michigan Department of Treasury and Michigan Attorney General’s Office are working together to bolster criminal investigations and encourage compliance with current laws and regulations.
Additional enforcement efforts are expected to further encourage compliance with state law.
Anyone with information on individuals or retailers violating the Tobacco Products Tax Act is encouraged to contact the MSP Tobacco Tax Enforcement Team at (734) 525-4246. Callers can remain anonymous.
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