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Arkansas’s Solution to Cigarette Border-Smuggling  

This means residents in towns that do not border other states can (legally) purchase cigarettes at lower tax rates by traveling to border towns. Mark Robyn, a Tax Foundation analyst, argues that this will still probably result in a net tax revenue gain for Arkansas -- since it will keep more cigarette purchases in-state -- and a net revenue loss for adjacent states.

As far as I can tell, no other state has tried to stop border-shopping for cigarettes in quite the same way. Mr. Robyn notes, however, that Arkansas has put in place similarly clever laws in response to border-state income tax and border-state gas tax differentials.

Source: The Tax Foundation

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