McAuliffe signs legislation to crack down on cigarette trafficking in Virginia

RICHMOND, Va. (WRIC) — Terry McAuliffe is cracking down cigarette trafficking in Virginia. The governor on Thursday signed two bills into law targeting people who sell cigarettes in bulk.

“What I will not tolerate is someone coming in and ripping off our Virginia taxpayers, and that is exactly what has been happening,” McAuliffe said.

And happening all too often. Here’s how it goes: Individuals create a fake business such as a fake convenience store. They become tax exempt and buy cigarettes in bulk from a wholesale location. The problem comes when instead of selling them in a store locally and charging sales tax, that person takes them out of state for sale.

“We’re losing about $10.5 million every year through smugglers who come buy our cigarettes, don’t pay taxes on it, they are supposed to, and then take most of these cigarettes up to New York City,” McAuliffe explained.

The new bill creates a new requirement that purchasers of cigarettes specifically for resale must apply for a special exemption certificate from the Department of Taxation in order not to be liable for the payment of sales tax.

“If you now buy more than 50 cartons, or over $10,000, we’re going to track it now,” McAuliffe said. “We’re going to have record keeping to track it so we can keep a good eye on exactly what is happening.

And if you violate this law, the first time is a Class 1 misdemeanor. You do it a second time, Class 6 felony. We will come after you and we will put you in prison.”

The two bills were sponsored by Democratic Senator Janet D. Howell as well as Republican Senator Tommy Norment and Republican Delegate Richard L. Anderson.

This is a developing story. Stay with 8News online and on air for the latest updates.

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