Evening star., 1940-04-19
Thousands Smugg|e
~
Tobacco 10 Escape
New York Taxes
Trade Barrier Cuts
Expected Revenue
And TotuI SuIes
This Is the second of q series on
city and State trade barriers.

VNs0 sVNos SOiSS
This Is the second of a series on
city and State trade barriers.
By the Associated Press.
NEW YORK, April 19.-Thou-
sands of normally law-abiding citi-
zens of the metropolitan area sud-
denly found themselves in possess
sion of "contraband goods" last
summer and regarded as smugglers
In the eyes of the law.
The Hudson River, which sep
arates New York and New Jersey,
reared to trade barrier heights, and
crossing the river with a package
Of cigarettes purchased. in New Jer-
sey became something of an ad-
venture.
1t all started May l, 1898, when
the city of New York levied tax
of l cent a package on cigarettes,
the proceeds to 60 toward unem-
ployment relief. The State piled
on an additional 2 cents July /, 1899,
and the situation reached a climax
with between 200 and 300 seizures
OF cigarettes, accompanied in some
cases by fines and in few instances
by short jail sentences.
Over in Jersey cigarettes are tax
free, so far as the State is con-
cerned. This was a great tempta-
ton to New Yorkers, whose smokes
were doubly burdened.
Tax Returns Disappointing.
The direct result of the cigarette
tax laws was wholesale smuggling
OF cigarettes from New Jersey. Since
nearly 100000 commuters and visi-
tors come to New York each day,
1t was almost impossible to stop
this interstate traffic.
Commuters from New Jersey to
New York Offices and shops brought
cigarettes in for their friends. Some
more mercenary, built up thriving
little businesses Truck drivers
picked up cartons for favored Gus
toners. Tax-free cigarette stands
mushroomed on the Jersey side of
the river at bridge and tunnel en-
frances, and the walls of New York
tobacco dealers rent the tax-filled
air.
New York City officials discovered
that returns on the tax were disap-
pointing. A Gordon of tax collectors
was thrown along the city's western
front to stop the flow of contra
band"
People continued to buy cigarettes
IN New Jersey and sell or smoke
them in New York.
In January the New York Retail
Tobacco Council said that in. the
previous six months the city's tax
had caused a loss of 100000 in
business, and that taxless New Jer-
sey had gained most of the sales
New York retailers lost-72,459. los
packages in six months.
City Repeals Levy.
Finally, last month, the city con-
ceded that smokers may bring Gig
arettes for personal use from other
States and cities without tax.
Inc concession was a significant
development in the city's prolonged
and not always successful drive to
stem the flood of unstamped cigar
cites from Jersey and elsewhere.
Previously city prosecutors had con-
tended that transporting even one
package of cigarettes, regardless of
the use. was breach of the city's
tax laws.
The end of this particular tax
trail came when the citv repealed
the l-cent tax, effective July next.
Despite the lowering of this bar
fler, others remain. New York
Cltys 2 per cent sales tax was in
stltuted in 1884. Among the oues-
lions that arose was whether mer-
chandise delivered in. New York
from an out-of-State firm was ex-
empt.
In January the Supreme Court
ruled that the tax, as applied to
products brought into the city from
outside the State, does not infringe
the commerce clause of the Con-
stitution.
Auto Levies Collected.
Corporation Counsel William C.
Hanler estimated the city's relief
fund should benefit from s1,250, 900
to s2.500,0O0 year as result of
that decision.
There are other levies, too, which
trouble the waters of the Hudson,
When New York taxicabs venture
across the George Washington
Bridge into New Jersey with fares,
New Jersey authorities, seeking road
taxes, slap on them a mileage tax
OF one-half cent per mile.
New York, on the other hand.
pounces on New Jersey tow cars
which come over without the S.
license fee prescribed by city ordi-
nance.
New Jersey passed the mileage
tax law in 1881, providing the one
half cent levy against omnibuses.
Now its Interpretation of the law
makes it apply to New York City
taxicabs, which in many cases are
bound for Jersey resorts or night
clubs.
The entry of milk from other
cities is subject to Health Depart