Tobacco Pricing

Research

Cigarette tax hikes curb smoking in pregnancy
New research published in the American Journal of Preventive Medicine shows that when taxes on cigarettes increase, smoking among pregnant Americans decreases. The study examined how public policy may impact smoking habits among pregnant women by looking at data gathered from about 225,500 American women across 29 states that gave birth between 2000 and 2005. The women were tracked during their pregnancy and through four months post-delivery. The researchers found that a dollar increase in cigarette taxes/prices influenced an almost 5% increase in the probability that a pregnant woman would quit smoking by her last trimester. This data confirms previous studies finding that increasing taxes is an effective way to achieve the goal of encouraging smokers to quit, and provides new evidence that pregnant women are responsive to tobacco prices. To read more about this study, click here. Click here for the study summary.

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Reports

New fact sheets: Map of state cigarette tax rates; State cigarette excise tax rates and rankings
The Campaign for Tobacco-Free Kids (CTFK) has released two updated fact sheets that provide a map of cigarette tax rates by state, as well as state cigarette excise tax rates and rankings. There are now 30 states and D.C. with cigarette tax rates of $1.00 per pack or more, 14 states and D.C. with cigarette tax rates of $2.00 per pack or more, 5 states with tax rates of $3.00 or more, and one state with a tax rate higher than $4.00. Additionally, 47 states, D.C. and Puerto Rico have increased their cigarette tax rates more than 105 times since 2002. Click here to view the Map of State Cigarette Tax Rates. Click here to view the State Cigarette Excise Tax Rates and Rankings fact sheet.

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State Policy

Public health groups: Tobacco companies put profits before kids in defeating California ballot initiative to raise cigarette tax (CA)
Proposition 29 has officially been defeated in California, though the margin was extremely narrow. Large tobacco companies including Philip Morris and R.J. Reynolds invested about $47 million in the campaign to defeat Proposition 29, which would have increased cigarette taxes in California by $1 per pack. Anti-tobacco organizations such as the Campaign for Tobacco-Free Kids (CTFK) and the American Cancer Society (ACS) and its advocacy affiliate, the American Cancer Society Cancer Action Network (ACS CAN) have released statements regarding the defeat expressing concern about the tobacco companies’ lack of compassion for the health of U.S. citizens, especially children, due to tobacco exposure. Read more here. Click here to read a press release from CTFK, or click here to read ACS CAN’s statement.

Roll-your-own tobacco tax approved in both House and Senate (CT)
Connecticut’s Senate and House voted to approve a bill that changes the state’s budget to include an increase to taxes on roll-your-own cigarettes. The changes will reclassify roll-your-own tobacco shops as cigarette manufacturers, and require them to pay licensing fees and increased taxes. This bill makes Connecticut the twelfth state in the U.S. to approve regulations to shops that sell roll-your-own machines and tobacco products, and is scheduled to become effective on October 1. Click here or here for more information. Click here to track SB 6001, which has been sent to the Governor for his signature.

Gov. Quinn signs Medicaid cuts, cigarette tax into law (IL)
The governor of Illinois, Pat Quinn, signed legislation that increased the state’s cigarette tax by $1 per pack and includes a $1.6 billion series of cuts to Medicaid programs, effective June 24. The revenue gained from the tax increase will be used to save Medicaid from collapse in the state. The tax increase includes other tobacco products such as roll-your-own cigarettes, little cigars, and moist snuff. Click here to read more about the tax increase and the subsequent effects to healthcare in the state.

Leading health groups urge Rhode Island lawmakers to approve large increase in cigarette tax, reject 4-cent proposed increase (RI)
Leading public health organizations in Rhode Island are urging state lawmakers to reject a 4-cent per pack increase to the state’s cigarette tax, and pass a bill that supports a more aggressive increase of 90 cents per pack for FY2013. The American Cancer Society, American Heart Association, and the American Lung Association in Rhode Island believe that 4 cents is too little of an increase, and that a larger increase would provide more money to reduce smoking, save lives, and raise significant revenue for the state. Support for higher increases is based on existing scientific research that states that small tax increases are not effective in reducing smoking. To read more, click here.

New law targets cigarette smuggling (VA)
A new state law in Virginia will cause persons “who possess, with intent to distribute, more than 5,000 (25 cartons) tax-paid cigarettes” to face state fines and criminal charges. The term “tax-paid cigarettes” refers to cigarettes purchased legally in a state that carry the state’s tax stamp. This law targets illegitimate cigarette sales by individuals who buy large quantities of cigarettes in Virginia with the intent to resell them in a state with a higher tobacco tax. Virginia has the second lowest tobacco tax in the U.S. at $0.30 per pack. This new law expands on the federal law, Prevent All Cigarette Trafficking Act, signed by President Obama in 2010, and will be effective starting July 1, 2012. Click here to read more about this law.

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National Policy

Distributor promoting awareness of pro-cigar legislation
The Traditional Cigar Manufacturing & Small Business Jobs Preservation Act is gaining support from members of Congress and Senate, and has garnered 25,000 signatures on a petition submitted to the White House. The Traditional Cigar Manufacturing & Small Business Jobs Preservation Act was created to protect the cigar industry from “unfair and unwarranted” regulation by the Food & Drug Administration. The bill states that the cigar industry provides thousands of jobs in the U.S., does not market to minors, and that cigar smoking is a non-addictive pastime enjoyed by adults. To read the full article click here. The Campaign for Tobacco-Free Kids (CTFK) has expressed concern over the cigar industry’s interest in creating an exemption from the Food and Drug Administration’s (FDA) regulations for certain types of cigars. According to CTFK, the claims made in this Act contradict numerous scientific studies that assert that tobacco is in fact addictive and causes adverse health effects. Click here to read a fact sheet from CTFK about this issue. Click here to track bills H.R. 1639 and S. 1461 that are at the center of this dispute.

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International

TPP negotiations make 'better-than-expected' progress
“Better than expected” progress is reportedly being made in negotiations of the proposed extension to the Trans-Pacific Partnership (TPP). The Office of the United States Trade Representative (USTR) confirmed that the twelfth round of negotiations of the TPP between Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the U.S., and Vietnam has led to the development of ambitious tariff packages. Progress has also been made in addressing implications of the enactment of the 2009 Family Smoking Prevention and Tobacco Control Act, which gave the U.S. Food and Drug Administration (FDA) new authority to regulate tobacco products in the U.S. A draft proposal has been created that addresses the health and regulatory perspective, and makes tobacco products subject to tariff phase-outs. To read more about how these negotiations address tobacco regulations, click here. Click here to read about disputes made by three countries against Australia’s plain tobacco packaging laws, and the effects it could have on the TPP.

More enforcement would curb illegal tobacco market: Study (Canada)
Concordia University economists published a report that states that when tax policy decisions are being made, the Canadian government should find an appropriate balance between taxes, restrictions, and controls on the illegal tobacco market. This study examined the various policy scenarios, such as reducing taxes or increasing enforcement, on tobacco use and the sale of legal and illegal cigarettes. The authors reported that tax reductions on cigarettes would not have a significant impact on reducing the illegal market, and that it would result in a small increase in total tobacco use as well as a loss in revenue. To read more about the study results click here. Click here to read the full report.

A smoke-free country? New Zealand taxes aim for it (New Zealand)
The government of New Zealand has announced that there will be a 40% increase in tobacco taxes over the next four years. Currently, New Zealand has among the highest tobacco taxes in the world, and officials aim to reach prices of 20 New Zealand dollars per pack by 2016. The government has pledged to eliminate smoking entirely by 2025, and has implemented a policy effective in July that will require cigarettes to be hidden below the counter by retailers as opposed to putting them on display. The announcement has received support from New Zealand’s Cancer Society and the anti-tobacco lobby group ASH. To read more, click here. Click here to read statements from Hon Tariana Turia, Associate Minister of Health, regarding the passing of the first reading of the Customs and Excise (Tobacco Products – Budget Measures) Amendment bill.

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