October 17, 2011   California, ever the trendsetter, has inspired proposed congressional legislation aimed at cracking down on tobacco smuggling and increasing cigarette tax revenues.
The Smuggled Tobacco Prevention, or STOP, Act would require that tobacco products carry a high-tech stamp, similar to one used in the Golden State, that allows government investigators to track cigarette packages and determine whether taxes were paid and whether tobacco is being diverted to illegal markets.
The measure is modeled after a California program that began in 2005 and has reduced cigarette tax evasion by $133 million annually, according to the State Board of Equalization.
 “Black market cigarettes are robbing our coffers of a critical revenue source that we need to pay for vital domestic programs like health insurance for children,” said Sen. Frank Lautenberg (D-N.J.), the bill’s chief Senate sponsor.
The Justice Department estimates that tobacco smuggling costs federal and state governments at least $5 billion in lost revenue annually, bill sponsors say.

For More Information:
http://latimesblogs.latimes.com/nationnow/2011/10/congress-looks-to-california-model-for-collecting-lost-tobacco-taxes.html