WALKER, Mich. (WZZM) -- WZZM 13 is learning more about an illegal activity that's crossing state lines and Michigan taxpayers are paying the price tag, at least $130 million per year. Now, new efforts are underway to crack down on tobacco fraud in West Michigan, as stores illegally buy products without paying state sales tax.
On Monday, state police seized an estimated $1,000 of tobacco from a local store owner, suspected for tobacco fraud.
State police are not releasing the name because charges are still pending, but they say the owner did not have the proper receipts.
"It was blatantly obvious he did not have invoicing for the product which was on the wall," says Sergeant Rob Davis, with Michigan State Police.
Sergeant Rob Davis has already made ten tobacco seizures this year.
Some are breaking the law unknowingly, others intentionally.
"Essentially what is smuggling or untaxed tobacco and selling it within the state," says Sergeant Davis.
State police say one of the reasons this type of fraud is so prevalent is because Michigan's tobacco tax is much higher than in some other states
In Michigan, tobacco sales tax is $2, compared to 45 cents in North Carolina, and only 17 cents in Missouri, which is the lowest in the country.
"They drive down to Missouri buy a bunch of tobacco, then they'll make the rounds to convenience stores and try to sell the tobacco," says Sergeant Davis.
WZZM 13 went with state police for an inspection at Alpine Liquor.
At first, it appeared the owner was missing proof he paid the state sales tax, who asked for more time.
"It's got to be now, especially you've got a lot of pipe tobacco back there," said Sergeant Davis to the store owner.
However, it turned out there was a simple language barrier.
Once the receipts were located, the store got an all clear. The next store Party World also passed the inspection and the owner spoke out against those breaking the law.
"It forces us to sell things below margin, and then we don't make as much money," says Dave Castor, manager of Party World.
$500 dollars or more of tobacco fraud is considered a felony.
The cases are reviewed by the attorney generals office, before charges are filed.