Anti-Smoking Legislation

Pipe Tobacco To Be Taxed At Roll-Your-Own Rates?

NoMoreTobaccoTaxes — Fri, 22 Jan 2010 17:32:57 GMT

HR 4439, the Tobacco Tax Parity Act of 2010 was introduced on January 13, 2010 and would tax pipe tobacco at the same insane rate ($24.78 per pound) as roll-your-own tobacco from the current $2.8311 per pound. Introduced by Representatives Steve Cohen (Dem., TN) and Lloyd Doggett (Dem., TX), it has been referred to the House Ways and Means Committee of which Mr. Doggett, a staunch anti-smoking advocate, is a member.

This bill is not really aimed at pipe smokers as that segment of the population (estimated at .01% of US adults) is so small that the additional revenue generated by PIPE SMOKERS wouldn't cover the cost of pursuing this change. nothing more than an attempt to rope in taxes from roll-your-own cigarette enthusiasts who having been stung by this same price increase in their addiction last spring (thank you SCHIPs) have decided to start rolling pipe tobacco because it is suddenly cheaper real RYO tobacco (if you can call that stuff tobacco really).

Unfortunately, the RYO industry has brought this on to a certain extent because many brands/bags of RYO tobacco have been relabeled as pipe tobacco for taxation purposes. You can tell by looking at the type and the cut of the tobacco that no right-thinking brother of the briar would even consider sticking this trash in their pipe but the manufacturers have proudly changed their RYO packaging to crow that what they are selling is now pipe tobacco and should be taxed at a much lower rate.

Well now, those few of us that truly enjoy a pipe, whether meerschaum, briar or even the old American favorite corncob pipe are going to have to pay through the nose because of RYO smokers trying to inexpensively fuel their addictions AND the greed of corporate RYO tobacco producers.

However, all is not lost.

Contact your local representatives and put pressure on them to stop this bill. If we don't stop this now, it could spell the end of a tradition here in the US: the considered pursuit of the perfect smoke by brothers (and sisters) of the pipe as well as the end of the traditional Tobacconist as we know it.

SPEAK UP NOW AND SPEAK UP LOUDLY!

In case you didn't link through to read the full text of this proposed bill, here is the full text of it as of today:

111TH CONGRESS
2D SESSION H. R. 4439
To amend the Internal Revenue Code of 1986 to impose the same rate
of tax on pipe tobacco as is imposed on roll-your-own tobacco.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 13, 2010
Mr. COHEN (for himself and Mr. DOGGETT) introduced the following bill;
which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to impose
the same rate of tax on pipe tobacco as is imposed
on roll-your-own tobacco.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Tobacco Tax Parity Act of 2010’’.

SEC. 2. PIPE TOBACCO AND ROLL-YOUR-OWN TOBACCO RATE PARITY.
(a) IN GENERAL.—Subsection (f) of section 5701 of the Internal Revenue Code of 1986 is amended by striking ‘‘$2.8311 cents’’ and inserting ‘‘$24.78’’.

(b) EFFECTIVE DATE.—The amendments made by this section shall apply to articles removed (as defined in section 5702(j) of the Internal Revenue Code of 1986) after the date of the enactment of this Act.

Flavored Cigarette Ban Starts Tuesday, Sept. 22nd

NoMoreTobaccoTaxes — Fri, 18 Sep 2009 22:22:20 GMT

The Smoking Prevention and Tobacco Control Act, signed into effect by President Barak Obama on June 22 2009 has a provision that prohibits any flavored cigarettes (except for menthol of course) from being sold as of Tuesday. In a “Letter to Industry on Cigarettes Containing Certain Characterizing Flavors”, sent to tobacconists across the country on September 14th, states that

establishes a tobacco product standard special rule for cigarettes that states in part:

…a cigarette or any of its component parts (including the tobacco, filter, or paper) shall not contain, as a constituent (including a smoke constituent) or additive, an artificial or natural flavor (other than tobacco or menthol) or an herb or spice, including strawberry, grape, orange, clove, cinnamon, pineapple, vanilla, coconut, licorice, cocoa, chocolate, cherry, or coffee, that is a characterizing flavor of the tobacco product or tobacco smoke.

This standard applies to all tobacco products that meet the definition of a “cigarette” in section 900(3) of the Act even if they are not labeled as “cigarettes” or are labeled as cigars or as some other product.

Of course, they don’t really explain what the text of Section 900(3) is so many tobacconists have been struggling to try and understand what that means. Does that mean that pipe tobacco and cigars WILL be affected? At face value this could be the case.

Here is the actual text of the appropriate section:

‘‘SEC. 900. DEFINITIONS.

‘‘(3) CIGARETTE.—The term ‘cigarette’—
     ‘‘(A) means a product that—
         ‘‘(i) is a tobacco product; and
         ‘‘(ii) meets the definition of the term ‘cigarette’ in section 3(1) of the Federal Cigarette Labeling and Advertising Act; and
     ‘‘(B) includes tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette or as roll-your-own tobacco.
‘‘(4) CIGARETTE TOBACCO.—The term ‘cigarette tobacco’ means any product that consists of loose tobacco that is intended for use by consumers in a cigarette. Unless otherwise stated, the requirements applicable to cigarettes under this chapter shall also apply to cigarette tobacco.

The Section referred to above is most likely Title 15, Chapter 36, Section 1332(1) of the US Code:

(1) The term “cigarette” means—

(A) any roll of tobacco wrapped in paper or in any substance not containing tobacco, and

(B) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subparagraph (A).

So, using the above, it would appear that cigars will not be affected. It is pretty clear that taking a cigarette and calling it a little cigar is not going to exempt that product from this section of the act. However, truly legitimate little cigars will. However, there is wiggle room provided by the appearance portion of (1)(B) above.

However, where does this leave the pipe smoker? Our vendors tell us this is not going to present a problem, however the verbiage in Section 900(3)(B) could be loosely interpreted to include pipe tobacco because people COULD purchase pipe tobacco for RYO cigarettes. We’ve even seen some vendors bagging up RYO flavored cigarette tobacco and labeling it as pipe tobacco. One look at the tobacco will confirm that it isn’t pipe tobacco despite what it says on the packaging.

Originally I assumed this was an attempt to get around the $24/pound federal tax on RYO products (Thank you SCHIPPs) but it may be an attempt to get around this restriction as well. One hopes that shenanigans like this or extensive use of pipe tobacco by cigarette smokers doesn’t cause a crack-down on pipe tobacco.

Comments or thoughts on this topic? Please use the feedback mechanism shown below…

NYC Health Commission Just Doesn’t Think…

NoMoreTobaccoTaxes — Thu, 17 Sep 2009 02:13:01 GMT

The Rest of the Story blog has a reasoned post today in “NYC Health Commissioner: "We Don't Think Children Should Have to Watch Someone Smoking” about how anti-smoking movement has degraded from protecting the health of those exposed to second-hand smoke to preventing people from SEEING someone smoking. Smokerism is running amuck in this country and those of us who enjoy our LEGAL past-time need to read this and start to stand up to this type of oppression.

According to an article at NY1, New York City Health Commissioner Dr. Thomas Farley explained that the reason behind the city's proposal to ban smoking in all parks is not to protect people from secondhand smoke, but to prevent children from even having to see a smoker in public.
The Health Commissioner was quoted as stating: "We don't think children should have to watch someone smoking."
The New York Times also reported that the Health Commissioner described the smoking ban in public parks as being intended not to protect nonsmokers, but to get smokers to quit by making it harder for them to light up in public.
According to the article in the Times, "Dr. Farley said the ban—which officials said may require the approval of the City Council, but could possibly be done through administrative rule-making by the city's Department of Parks and Recreation—was part of a broader strategy to further curb smoking rates, which have fallen in recent years."
The Rest of the Story
Make no bones about it. Anti-smoking advocates are now promoting smoking bans for the purpose not of protecting nonsmokers from the hazards of secondhand smoke, but of protecting nonsmokers from even having to see smokers in public. And they readily admit it.
For many of my 24 years in tobacco control, the clearly stated goal of the smoke-free movement was to protect nonsmokers from secondhand smoke by promoting bans on smoking in the workplace and public places. The goal was never to prevent people from seeing smokers. We were talking about a serious health hazard - high levels of direct exposure to a hazardous mix of chemicals in tobacco smoke from other people.
Now, the movement has apparently deteriorated to the point where it is promoting smoking bans simply to prevent people from having to see others smoking.
From an anti-smoking perspective, this is troublesome because I think it will really hurt the cause. It is going to make it more difficult to promote legitimate smoking bans - those which protect workers from substantial exposure to secondhand smoke - in the states which currently do not have workplace or restaurant/bar smoking bans. If we are viewed (now rightly so) as anti-smoking zealots who merely don't want to have to see people smoking in public, then our arguments for intervening in the workplace to eliminate secondhand smoke are greatly undermined.
From a broader public health perspective, this is troublesome because it sets a tremendously bad precedent to ban unhealthy behaviors in public simply because we don't want children to see those behaviors. What's next? Are we going to prohibit people from eating french fries in public because it sets a bad example for kids? Are we going to prohibit the sale of those delicious New York City pretzels because children are seeing the consumption of an unhealthy amount of salt in one sitting? Are we going to prohibit obese people from entering public parks because it sets a bad example?
What the justification being provided for this law does is define smoking as an immoral, rather than simply unhealthy behavior. We generally do not ban unhealthy behaviors in public to protect people from seeing them. The justification for banning certain types of public behavior is either that the behavior harms others or puts them at risk or the behavior violates the public morals. It seems to me that smoking in a wide-open city park does neither. But by justifying banning smoking by arguing that children will see people smoking, city officials are essentially defining smoking as being a violation of the public morals.
I do find it dangerous to set such a precedent, because it is only a small step in logic to use the same reasoning to justify banning obese people from entering public parks. If the justification for not allowing smoking in public is that it sets a bad example for children, then the same reasoning would also support banning obese people from public parks, or also banning a host of other behaviors, from eating Nathan's fries to salted pretzels to high-calorie, colored sugar water (i.e., Coke and Pepsi) in public. I don't understand the singling out of smoking.
What saddens me the most is the loss of the science-base to the tobacco control movement. Not only is the rigor of our science going down the tubes, as I have demonstrated during the past 2 days with these very seriously flawed smoking ban/heart attack studies, but now the science-based justification for our promoted policies is also going down the tubes. Ultimately, I feel this is going to hurt even our legitimate pursuits, such as trying to protect workers from the very real hazards of high levels of secondhand smoke exposure.

What do you think? Speak up and let your voice be heard in our Feedback section below…

Tobacco Manufacturers and Retailer Sue FDA

NoMoreTobaccoTaxes — Wed, 02 Sep 2009 22:16:16 GMT

Numerous Tobacco Manufacturers and Retailer File Lawsuit on FDA Provisions

A lawsuit was filed this week in federal district court in Bowling Green, Kentucky by R.J. Reynolds Tobacco Company, Conwood Company, LLC, Commonwealth Brands, Inc., Lorillard, Inc., National Tobacco Company, and Discount Tobacco City & Lottery, Inc. against the U.S. Department of Health and Human Services and the U.S. Food and Drug Administration seeking to protect the constitutional right of tobacco manufacturers and retailers to communicate to adults about tobacco products.

Lawsuit Focus: Constitutional Protection of Speech

While the lawsuit does not challenge the authority that Congress granted to the FDA to regulate tobacco products, the forty-six page complaint focuses on declaring as unconstitutional those regulations that prohibit or restrict the advertising of tobacco products and the providing of information about tobacco products to adults. Under the First Amendment of the U.S. Constitution, free speech is protected and the U.S. Supreme Court has defined “speech” to include “commercial speech” which is better known as advertising. In fact, the very first sentence in the complaint quotes the U.S. Supreme Court’s 2001 decision in the case of Lorillard Tobacco Co. v Reilly which states: “[S]o long as the sale and use of tobacco is lawful for adults, the tobacco industry has a protected interest in communicating information about its products and adult customers have an interest in receiving that information.” Specifically, the lawsuit seeks to have declared as unconstitutional the new FDA regulations that would:

Prohibit color lettering, trademarks, brand logos and images on all retail point-of-sale advertising and direct mail advertising.

Restrict tobacco product advertising in retail stores to the use of black letters on a white background to list the brand name, product size, price, etc. (also known as “tombstone” advertising).

Prohibit any color imagery on the packaging of cigarettes and smokeless tobacco products.

Prohibit tobacco manufacturers from making any statements about tobacco products in scientific, public policy or political debates.

Besides seeking the declaration of unconstitutionality, the plaintiffs in the lawsuit are asking the U.S. Federal District Court in Kentucky for a preliminary and permanent injunction prohibiting the FDA from enforcing the provisions of the law that relate to tobacco advertising, tobacco packaging and graphic labeling requirements.

In response, the FDA may claim that these advertising and packaging restrictions are needed to reduce youth tobacco use. However, more than a decade ago in the U.S. Supreme Court case of Reno v. ACLU, the court majority held that “regardless of the strength of the government’s interest in protecting children, the level of discourse reaching a mailbox simply cannot be limited to that which would be suitable for a sandbox.” In other words, the Supreme Court held that advertising meant for adults and which adults have a right to see cannot be restricted simply because children might also see the advertising.

NATO Retailer Comment

NATO retail member Frank Hinton of Discount Tobacco City and Lottery joined the lawsuit as a plaintiff because, in his words, “we only sell tobacco products to people over the age of 18 and it is not right for the federal government to dictate to me how I advertise legal tobacco products in my stores to adult customers.”

From a NATO press release, 9/2/2009

SCHIP Update

NoMoreTobaccoTaxes — Tue, 24 Feb 2009 02:25:19 GMT

Tobacco users unfairly bear the burden of supporting expansion of this program!

In case you’ve been living under a rock lately, you’ve probably heard that this unfair taxation act has passed. The Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3) that was signed into law by President Obama on February 4, 2009.

You can find a summary from the TTB.Gov site at http://ipcpr.org/legislation.html. While they haven’t yet published the required rulemaking documents about the implementation of the provisions of this Act.

The Act increases the Federal excise tax on all tobacco products and cigarette papers and cigarette tubes, effective April 1, 2009. In addition, the Act imposes a floor stocks tax on all tobacco products (except large cigars), cigarette papers and cigarette tubes held for sale on April 1, 2009. A floor stocks tax is a one-time excise tax placed on a commodity undergoing a tax increase. The amount of the floor stocks tax is equal to the difference between the new tax rate and the one just previous to it. Any person who holds tobacco products (except large cigars), cigarette papers, or cigarette tubes is liable for the floor stocks tax on April 1, 2009.

Here is their graph of how the taxes, and the anticipated floor tax, will break down:

Tobacco Product	Tax Rate effective March 31, 2009	Tax Rate effective April 1, 2009	Floor Stocks Tax Rate (difference between the rates)
Small Cigarettes - Class A (Weigh 3 lbs. or less per 1,000)	$19.50 per 1,000 equivalent to: $3.90 per carton $0.39 per pack	$50.33 per 1,000 equivalent to: $10.066 per carton $1.0066 per pack	$30.83 per 1,000 equivalent to: $6.166 per carton $0.6166 per pack
Large Cigarettes - Class B (Weigh more than 3 lbs. per 1,000)	Up to and including 6½” long: $40.95 per 1,000	Up to and including 6½” long: $105.69 per 1,000	$64.74 per 1,000
	Over 6½ “ long: Each 2¾” counts as 1 paper, then $19.50 per 1,000	Over 6 ½ “ long: Each 2¾” counts as 1 paper, then $105.69 per 1,000	Over 6½” long: $64.74 per 1,000
Small Cigars (Weigh 3 lbs. or less per 1,000)	$1.828 per 1,000	$50.33 per 1,000	$48.502 per 1,000
Large Cigars (Weigh more than 3 lbs. per 1,000)	20.719% of sales price but not to exceed $48.75 per 1,000	52.75% of sales price but not to exceed $0.4026 cents per cigar (or $402.60 per 1,000)	NOT PART OF FLOOR STOCKS TAX
Chewing Tobacco*	$0.195 per pound	$0.5033 per pound	$0.3083 per pound
Snuff*	$0.585 per pound	$1.51 per pound	$0.925 per pound
Pipe tobacco*	$1.0969 per pound	$2.8311 per pound	$1.7342 per pound
Roll-your-own tobacco*	$1.0969 per pound	$24.78 per pound	$23.6831 per pound
Cigarette paper	Up to and including 6 ½” long: $0.0122 per 50	Up to and including 6½” long: $0.0315 per 50	$0.0193 per 50
Cigarette paper	Over 6 1/2“ long: Each 2 ¾” counts as 1 paper, then $0.0122 per 50	Over 61/2“ long: Each 2 ¾” counts as 1 paper, then $0.0315 per 50	Over 6½” long: $0.0193 per 50
Cigarette tubes	Up to and including 6½” long: $0.0244 per 50	Up to and including 6½” long: $0.0630 per 50	$0.0386 per 50
Cigarette tubes	Over 6½ “ long: Each 2¾” counts as 1 tube, then $0.0244 per 50	Over 6½ “ long: Each 2¾” counts as 1 tube, then $0.0630 per 50	Over 6½” long: $0.0386 per 50

Wise smokers of cigars and pipe tobacco will want to contact their local tobacconist before April 1, 2009 in order to stock up on their supplies before the taxes take effect. Not only will they be saving money, but hopefully help their struggling local tobacconist out by reducing their floor tax exposure on items that aren’t considered Large Cigars.

Stop SCHIPS Expansion – A Smoker’s Call To Action!

NoMoreTobaccoTaxes — Fri, 12 Dec 2008 20:55:29 GMT

It isn’t “about the children” as the sound bites might indicate. What it is about is the unfair taxation of a small portion of the population to fund a program that affects ALL of the citizens of the US.

The following is a press release from the National Association of Tobacco Outlets advising all responsible consumers of tobacco products to make their voices heard on this subject. It is imperative that we all band together and speak out against this unfair taxation of a small segment (less than 10%) of society for a program that has universal concerns. Why put this on our back?

A Call to ACTION on SCHIP Tax Increases!

If Congress passes a bill early in 2009 to expand the State Children’s Health Insurance Program (SCHIP) by significantly increasing the federal cigarette and tobacco taxes, the fallout from this expansion of government subsidized health care will likely include major cigarette and tobacco sales reductions, large increases in the number of store robberies because the value of tobacco products would be so high, a floor stocks tax on cigarette and tobacco inventory adding up to an estimated $5,000 per store, employee layoffs and even store closings.

The SCHIP program is a top priority for Democrats and may result in the single largest tax increase on one industry’s products in the history of the country. With President-Elect Obama a supporter of SCHIP, the possibility of a tobacco tax increase to fund the expansion looms large even though Obama made campaign promises not to increase taxes on any one who earns less than $250,000. The 2007 SCHIP bills proposed the following increases in the federal tobacco excise tax rates:

Tobacco Product

Current Tax Rates

SCHIP Bill Tax Rates

Percentage Tax Increase

Cigarettes

39¢ per pack

$1.00 per pack

156.4%

Large Cigars

20.719% of manufacturer’s price; cap of 4.875¢/cigar

53% of manufacturer’s price; cap of $3.00/cigar

6,000%

Little Cigars

4¢ per pack

$1.00 per pack

2,197%

Pipe Tobacco

$1.0969 per pound

$2.8126 per pound

156.4%

Chewing Tobacco

19.5¢ per pound

50¢ per pound

156.4%

Snuff

58.5¢ per pound

$1.50 per pound

156.4%

RYO Tobacco

$1.0969 per pound

$8.8889 per pound

710.36%

The Time to Act is NOW!!!

NATO’s legislative staff members are sending out to association members customer alert sheets to place on store counters and personalized letters addressed to each retailer and wholesaler’s particular U.S. Senators and Representatives. NATO members need to call their Congressional representatives, urge their employees and customers to do the same and fax the personalized letters to Washington, DC. All the names, phone and fax numbers of the particular Congressional representatives are being provided. NATO members need only dial the phone and fax the letters. Your voice and the voice of your customers need to be heard.

Turbulent Time for Tobacco Requires Grassroots Efforts

No one can say with 100% certainty how the SCHIP legislation will finally be resolved by Congress in 2009. What can be said is that the SCHIP bill is just the beginning of what will be a turbulent year for the tobacco industry. With some in Congress supporting federal cigarette and tobacco tax increases to expand SCHIP and more than 30 states with large budget deficits some of which will also propose higher tobacco taxes as well, NATO wants to remind its members that they must continue to contact their elected officials to be heard on tobacco issues. Maintaining that dialogue and urging customers to make phone calls continues to be an important part of opposing unfair tobacco legislation.

So don’t sit by idly and watch your tobacco products get taxed by an increase of up to 6000%, write, or better yet, call your local congress person or senator and let them know that this is just plain WRONG!

Tobacco Product	Current Tax Rates	SCHIP Bill Tax Rates	Percentage Tax Increase
Cigarettes	39¢ per pack	$1.00 per pack	156.4%
Large Cigars	20.719% of manufacturer’s price; cap of 4.875¢/cigar	53% of manufacturer’s price; cap of $3.00/cigar	6,000%
Little Cigars	4¢ per pack	$1.00 per pack	2,197%
Pipe Tobacco	$1.0969 per pound	$2.8126 per pound	156.4%
Chewing Tobacco	19.5¢ per pound	50¢ per pound	156.4%
Snuff	58.5¢ per pound	$1.50 per pound	156.4%
RYO Tobacco	$1.0969 per pound	$8.8889 per pound	710.36%