44
TOBACCO BUSINESS
JULY/AUGUST 2013
pouch) to a flat 19 cents per pouch.
e-CigregULaTioNs
With the exploding popularity of electronic
cigarettes comes heavy regulation and taxation,
according to University of Louisville Professor
Brad Rodu.
Commenting on the FDA’s plan to issue
deeming regulations for currently unregulated
tobacco products, Rodu says that given that
the agency has “shown no interest in tobacco
harm reduction,” its regulatory framework
for electronic cigarettes might mirror that for
cigarettes and traditional smokeless tobacco
products, which could include “onerous
advertising and marketing restrictions that
would cripple efforts to increase awareness and
trial of e-cigs by smokers.”
He believes that the devices are also likely to
be burdened with heavy federal and state excise
taxes thatwill eliminate any economic advantage
they have over traditional cigarettes.Amid weak
opposition from loosely organized e-cigarette
consumers, trade groups and individual
marketers, regulation and taxation are likely to
prevail,he asserts.
Some local governments, on the other hand,
are taking a more rational approach.Oklahoma
and South Carolina are two examples, he notes.
These states would impose a tax of five cents
per milliliter on the nicotine mixture used in
e-cigarettes, with the tax rate not to exceed 10
percent of the state’s tax on regular cigarettes.
“It’s not perfect—a 1:50 or 1:100 ratio
would be more appropriate—but it’s a positive
development for tobacco harm reduction,”Prof.
Rodu says.
But it’s not happening yet—South Carolina
has already adjourned debate on the bill, with
state legislators saying they wanted to see
whether the federal government will tax the
devices before supporting any plan for tax at the
state level,according to anAP report.
R.J. Reynolds spokesperson Bryan Hatchell
expressed disappointment with the committee
decision, saying that the federal government’s
involvement in the tax issue is “inevitable,” and
that “states have an opportunity to protect this
important tobacco category by establishing their
own regulatory structure outside of what the
federal government chooses todo,”AP reported.
Prohibiting the sale of electronic cigarettes to
anyone below age 18 is already a reality in states
likeCaliforniaandisapopularproposalexpected
to pass soon in several more states, including
North Carolina and Illinois. California has also
proposed to ban e-cigarette use in public places
where smoking is already prohibited.
On the positive side, Delaware tabled a bill
that would have redefined a “tobacco product”
under state tax law to include e-cigarettes
containing nicotine,according to the Consumer
Advocates for Smoke-free Alternatives
Association (CASAA), which testified against
the bill.CASAA is doubtful that the bill will be
brought back for consideration.
raisiNg THe LegaL BUYiNgage
Four towns in Massachusetts (including two
Boston suburbs) have raised the minimum
age to purchase tobacco products to 21, with
two more considering it at press time. Five
towns in the state have raised it to 19 (with one
continuing it in phases until it reaches 21 in
2015). Local legislators expressed the hope that
these efforts result in a state-wideminimumage
of 21—already proposed in two otherNortheast
states:NewYork andNew Jersey.
Following New York City and New York
State’s footsteps, New Jersey recently proposed
to raise its legal age tobuy tobaccoproducts from
19 to 21.The thinking behind the proposal is to
buy young adults more time to “make a more
mature decision about a habit that is harder
to break the longer they smoke,” according to
proponents.
But smokers’ rights advocates argue that the
age restrictions would be unfair on an age group
considered old enough to vote and serve in the
military.Tobacco companies and some retailers
have also gone on record to suggest that young
adult smokers will turn to the black market or
nearby areas with lower age limits.
SOURCE: Campaign for Tobacco-Free Kids, May 24, 2013/Ann Boonn
HigH Tax/Low Tax
The Top 10 Lowest states in Cigarette excise Taxes
(as of July 1, 2013)
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georgia
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wesT virgiNia
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soUTH CaroLiNa
$0
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$0.50
$0.75
$1
$0.17
$0.30
$0.36
$0.37
$0.425
$0.44
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