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LaFaive, Fleenor and Nesbit (2008), LaFaive and Nesbit (2010) and LaFaive, Nesbit and Drenkard (2016) exclude North Carolina from their samples because it is modeled as the primary source of commercially smuggled cigarettes in the second stage regression.[70] Given the changes implemented in our second stage specification (discussed below), we do not exclude North Carolina or any other contiguous state from our sample

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Commercial cigarettes are taxed at both the federal level ($1.01 per pack) and the state level (Virginia's cigarette tax is $0.60 per pack, one of the lower rates nationally but it still adds up)
doi:10.1111/j.1553-2712.2009.00628.x
