Conclusion

Looking back on New Jersey's cigarette tax history, during periods of moderate taxation, sales of legally taxed cigarettes remain high. When the state has raised its tax rate sharply, as it has recently, legally taxed sales of cigarettes have plunged. According to government officials and academic researchers who have studied the issue, some smokers have slowed down or quit, but most of the dip in tax revenue is accounted for by casual and commercial smuggling.