Egregious acts of evasion or fraud.

1. Collecting TPT, but not remitting to DOR.
2. Structuring income to avoid taxation. 
3. Filing fraudulent returns to obtain illegal or multiple refunds.

Those tax violations that appear to be willful and intentional on the part of the taxpayer.

• Under Arizona Revised Statutes 42-1127 any person who evades the reporting, assessment or payment of cigarette or tobacco product taxes that would otherwise be due may be guilty of cigarette or tobacco tax evasion. Violators are subject to fines and/or jail time.
• Arizona’s cigarette tax is the 4th highest in the country.  With the passage of Senate Bill 1066, effective December 7, 2006, the tax per pack of 20 cigarettes now stands at $2.00.
• The tax on tobacco products varies per type of tobacco and by weight. Please refer to the Tobacco Tax Brochure, Publication 541, for additional information. This brochure can be located on our website here.

• Sale of unstamped cigarettes.
• Intentionally importing tobacco products from outside the state without remitting the appropriate Arizona Tobacco Tax.
• Sale of untaxed tobacco products (I.e. Mexican or duty free cigarettes).
• Sale of cigarettes with counterfeit stamps.

• Cigarette and tobacco product taxes fund a number of important programs. All of the taxes collected are earmarked for program funding of public health education, smoking cessation, prevention and treatment of tobacco related diseases, indigent health care, and low income health care for children.
• Cigarette and tobacco tax evasion reduces the revenue ability to fund these important programs.
• Cigarette and tobacco tax evasion hurts the honest business owner because unscrupulous sellers can undercut the prices charged by the legitimate business owner.
• Cigarette and tobacco product tax evasion is accompanied by an increase in thefts, hijackings, and cross-border smuggling, counterfeit cigarettes, and black market sales.

• Investigate alleged criminal and civil tobacco violations.
• Recommend criminal prosecution.
• Perform inspections on all retailers and distributors that sell tobacco products.
• Educate the public and local law enforcement communities on tobacco laws.

• With the passage of Senate Bill 1310, a cigarette directory was established through the Arizona Attorney General's Office. This directory lists all tobacco manufacturers who are in compliance with the 1998 Tobacco Master Settlement Agreement. Effective August 18, 2003, it became unlawful for any person to affix a stamp to a cigarette package, or sell or possess for sale cigarettes of a manufacturer or brand family not included in the directory (A.R.S. 44-7111).
• Visit the Attorney General's Website for additional information on the cigarette directory at http://www.azag.gov/ - Choose Quick Links and then AZ Cigarette Directory.