To bring all retailers, distributors, and the general public into compliance with Arizona tobacco laws through education, training, and enforcement activities.
Frequently Asked Questions
Q. What is cigarette and tobacco tax evasion?
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.
Q: What are examples of cigarette or tobacco product tax evasion?
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.
Q: Why is cigarette or tobacco tax evasion harmful?
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.
Q: What are the responsibilities of the Tobacco Enforcement Unit?
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.
Q: What is the Master Settlement Agreement?
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).
