Office of the State Treasurer

TRENTON -- State Treasurer John E. McCormac and Taxation Director Robert K. Thompson today announced two Union City residents are facing charges for selling untaxed cigarettes to an undercover officer at a local bodega.

The charges are the result of a joint investigation by the Union City Police Department and the Division of Taxation’s Office of Criminal Investigation.

Amparo I. Cagigas, 64, was charged with sale of untaxed cigarettes to an undercover Union City detective at Botanica El Negro in Union City on December 20, 2004. Follow-up investigation by police and a Taxation agent resulted in the seizure of an additional quantity of untaxed cigarettes at the bodega. Alexis Lopez-Garcia, 46, who identified himself at different times as either an employee or the owner of the store, was charged with possession of the cigarettes. Both defendants entered not guilty pleas this week in Union City Municipal Court.

All cigarettes used or sold in New Jersey must have tax stamps affixed, proving that the State’s tax of $2.40 per pack has been paid. In New Jersey, it is illegal to purchase or use cigarettes from other states or over the Internet without paying all requisite taxes due to New Jersey. Retailers can only obtain cigarettes from licensed distributors, who affix the New Jersey tax stamps. Out of state sellers are required by federal law (Jenkins Act) to provide lists of customers to tax officials from all states where sales orders originate.

Sale of untaxed cigarettes is punishable by up to one year in jail and a fine of up to $1,000.00. Possession of untaxed cigarettes is punishable by up to six months in jail and a fine of up to $1,000.00.

“The State of New Jersey is committed to ensuring that cigarettes are not sold illegally and that everyone who purchases cigarettes here pays the proper taxes,” said McCormac.

Treasurer McCormac expressed his thanks to Chief Charles Everett and the officers of the Union City Police Dept. for their diligence in pursuing this investigation, noting that the Cigarette Tax is an important element of State revenues.

This case follows recent actions taken by the Division of Taxation to recover unpaid taxes from some New Jersey residents who ordered cigarettes over the Internet without paying taxes. Under a plea agreement reached by the federal government with the operators of Cigoutlet.com and Affordablecigs.com the sellers were required to disclose their customer lists and invoices to New Jersey and 45 other states to which cigarettes were shipped. More than 1,200 New Jersey customers who placed cigarette orders through these sites have been billed for the Cigarette Tax and Sales Tax due on their online purchases.

The State of New Jersey is owed approximately $800,000 in taxes for this violation of the Jenkins Act. Of this $800,000 due, the Division of Taxation has, as of March 31, collected nearly $300,000 in taxes from about 500 compliant taxpayers.

“New Jersey is serious about restricting sales of untaxed cigarettes in this State,” Thompson said. “The customer list provides an opportunity for us to recover tax revenue that might otherwise be lost.”

Any New Jersey resident who has previously purchased cigarettes using the Internet, mail order, or telephone is urged to notify the Division of Taxation of these purchases. This self-assessment will be without penalty and interest charges provided the Division is notified and payment is made promptly and all such purchases cease. In order to start the self-assessment process, please contact the Division of Taxation’s Cigarette Tax Group between the hours of 8:30 AM and 4:30 PM by means of: