SHERIFF DART, PRESIDENT PRECKWINKLE
TEAM UP AGAINST FRAUD
Friday, September 30, 2011
—Dozens of businesses across Cook County are set to pay thousands in fines for selling unlicensed cigarettes – the result of a joint initiative spearheaded by Cook County Sheriff Thomas J. Dart and Cook County Board President Toni Preckwinkle.
The collaboration began in early September, as President Preckwinkle devoted additional staff to the Cook County Department of Revenue to investigate claims of businesses and individuals defrauding the county. At the same time, Sheriff Dart agreed to assign a team of police investigators to assist those revenue agents with enforcement.
In just three weeks, more than $353,000 in illegal cigarettes were seized, while nearly $400,000 in fines were levied.
The Cook County Tobacco Ordinance requires anyone selling cigarettes to pay at least a state and county tax before selling those cigarettes to the public. In 2007, Cook County realized $200 million in revenues from the sales of county stamps on cigarettes. Last year, that plummeted to $126 million. Though some of that can be attributed to fewer smokers, Sheriff Dart suspects much more of it is attributed to fraud.
“This is far safer – and nearly just as lucrative – of an underground enterprise as narcotics trafficking,” he said. “We have an obligation to support and protect the many business owners who do things the right way, while doing all we can to go after those who don’t.”
Also introduced on Friday was Cook County’s Cigarette Tax Reward Program, one facet of their offices’ collaborative efforts. The program asks residents to report retailers who are in possession of cigarettes without the Cigarette Tax Stamp, with a taped on or fraudulent stamp, or loose and individual cigarette sales, all practices associated with the rampant, multi-billion dollar enterprise of cigarette smuggling. Through the new initiative, citizens may receive up to one thousand dollars reward if they report violations of the Cook County Tobacco Ordinance to the Department of Revenue leading to unlawful tobacco confiscation and a fine being paid.
Currently, Cook County has a $2 per packet Tobacco Tax on all cigarette packets sold within the County. Since the tax rate is higher than the immediate collar Counties, many retailers within the County resort to selling cigarette packets for which a tax has not been paid. In most cases that price of the packets sold will include the tax; however, the difference is that the retailers are profiting from the higher price instead of remitting the tax back to the County. This tax evasion directly impacts public health and safety related services that the County provides to its citizens.
“We are taking every step we can to increase public safety and maximize the revenue we need to provide high-quality services that the people of Cook County depend on,” said Cook County Board President Toni Preckwinkle. “I want to thank Sheriff Dart for his willingness to collaborate us and helping strengthen fiscal responsibility in County government. In these difficult economic times, government has to do more with less so this revenue is critical to County operations.”
Sheriff Dart said there is a need for greater accountability and called for stiffer penalties against businesses cited, while also recommending the county develop a license to sell cigarettes for all county businesses, modeling it after the City of Chicago’s license.
The County is also asking for citizen participation to help enforce the prevention of cigarette smuggling so that the County can maximize revenue and continue to provide key funding for public safety and healthcare to its residents. The Department of Revenue is expected to bring in roughly $126 million from the cigarette this year, and the new initiative is aimed at maintaining this revenue level, while driving away illegitimate cigarette sales in the County. The County has set up a TIP hotline (312) 603-6870 #3 and a TIP website located at http://cookcountyil.gov/revenue for residents to assist the Department of Revenue and the Sheriff’s office.
The Department of Revenue has already made great strides in slowing the rate of revenue decline and increasing compliance throughout Cook County. In 2009 the Cook County Department of Revenue launched a Tobacco Investigation Unit that enforces the Tobacco Tax throughout the County. Since then the Department has made numerous improvements to the process including, bringing violators into the Administrative Hearing process that levies hefty fines for noncompliance and improving security of the stamps (the proof that a tax has been paid) to eliminate counterfeiting activities.