New Jersey raised its cigarette tax five times during the 1960s, starting the decade with a tax rate of 5 cents per pack and eventually reaching 14 cents. The Legislature changed the tax rate so often that tobacco tax administrators stopped printing the rate on each tax stamp.
At the same time, legally taxed sales dropped, largely because smuggling was on the rise. And indeed, with increasing frequency authorities caught individuals who had gone to North Carolina and stuffed their cars with as many cartons of cigarettes as they could. If the smugglers were caught, the punishment was not steep: usually confiscation of the cigarettes and possibly the vehicle, too, with a fine or probation.
The inventory of seized cigarettes that New Jersey's police accumulated had been given to prisons, welfare agencies and other state institutions throughout the 1950s, but by the mid-1960s, the volume of arrests and confiscations was now so great that New Jersey's state institutions could no longer smoke them all.
North Carolina was still selling unstamped, untaxed cigarettes in the 1960s, and when agents from Connecticut or New Jersey attempted surveillance of smugglers there, hoping to record license plate numbers as vehicles headed north from cigarette wholesalers, they ran into trouble. According to a contemporaneous report from the National Tobacco Tax Association, tax administrators who had no police powers were sometimes run off the road and sometimes threatened with shotguns. Usually they were quickly identified by the locals and laughed at, prompting agents to wonder who was watching whom.[*], 
By the early 1970s, defeatism was in the air. States refused to add more enforcement personnel, and tax administrators were admitting that two trends were combining to make their efforts nearly futile: Interstate smuggling over the roads was extremely easy, and ever-higher taxes increased both the profit motive for professional smugglers and the bargain-hunting motive for casual smugglers. The source of many illegal, interstate shipments continued to be North Carolina, from which cigarettes were known to be coming not only by truck and car, but by boat, camper, airplane and every other imaginable vehicle. Military bases and veterans' hospitals were emerging as another source of tax-exempt cigarettes, with sales figures per capita many times higher on the base than off of it.
As Albert Baytel, a supervisor in New Jersey State Department of Taxation put it in late 1971:
When I was coming down to this conference, I thought about a chart in our office which shows the tax enforcement problem in New Jersey and the accomplishments. However, when I look at this particular chart, I see that since 1964, we have been doing nothing more than apprehending people, the illegal transporters, at a rate of roughly 100 a year. This is excellent as far as performance goes, but one also has to realize that if we are doing this constantly year in and year out, we are really not solving the problem.
Measured by arrests and seizure of cigarettes, New Jersey had the second worst problem. New York continued to be the most powerful magnet for smugglers and the jurisdiction with the most arrests. During this era, administrators noted the theft of stamping machines by counterfeiters and a surge in truck hijackings so alarming that insurance companies started canceling theft policies on cigarette trucks. Tax officials attending National Tobacco Tax Association meetings acknowledged that they tended to understate the tax evasion and lost revenue in their official reports.
 "Enforcement Actions," in Proceedings of the 39th Annual Meeting of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1965), 6.
 "Annual Meeting of the Manufacturers' Activities Committee," in Proceedings of the 40th Annual Meeting of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1966), 5.
 "Organized Investigations and Police Cooperation," in Proceedings of the 40th Annual Meeting of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1966), 46-48.
 "Report of the Committee on Tax Evasion," in Proceedings of the 45th Annual Meeting of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1971), 2-3.
 "Enforcement Activities," in Proceedings of the 45th Annual Meeting of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1971), 28.
 "Report of Committee on Tax Evasion," in Proceedings of the 41st Annual Meeting of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1967), 14.
 "Stolen and Hijacked Cigarettes," in Proceedings of the 43rd Annual Meeting of the National Tobacco Tax Association (Chicago: Federation of Tax Administrators, 1969), 31-32.
 "Report of Committee on Tax Evasion," 41st Annual Meetings, 14.
[*] Tax administrators would be granted the authority to carry weapons and make arrests in 1973.