Washington's Revenues Plunge as Smuggler's Take Over Cigarette Market

High taxes create a black market

Washington has a smuggling problem, exacerbated by a large tax gap with its neighbors.

The state's tax on cigarettes is $3.02 a pack, compared to $1.18 in Oregon and 57 cents in Idaho. In the border cities of Washington, the ease of hopping the state line for cheaper smokes is just too tempting for some.

Washington's Department of Revenue estimates the state lost about $376 million in tax revenue in 2012 to cigarette tax evasion. An estimated 35 percent of the cigarettes in Washington are contraband.