International Premium Cigar & Pipe Retailers Association (IPCPR) Spring 2008 Legislative Update
With most state legislatures back in session, here is a breakdown, state-by-state, of what is currently happening, being considered, and what may be on the horizon in the coming months. As information and events change, we will provide updates. For a complete list of all state issues, please go to IPCPR's Tobacco Legislation homepage.
Alabama: the State Senate is currently considering Senate Bill (SB) 229-a statewide smoking ban. While it exempts cigar bars, retail tobacco shops, and outdoor areas, it will ban smoking in bars, bars within restaurants, and taverns, thereby severely curtailing locations where your customers may enjoy their favorite tobacco products. At this time it is unclear what will happen with this bill.
California: A cigarette excise tax increase (Assembly Bill 1a (due to a prior voter-approved initiative, the other tobacco products (OTP) excise tax, the tax applied to all tobacco products not classified as cigarettes, including premium, handmade cigars), is coupled and also increases) failed in a state Senate Committee. A key component in the death of this tax increase was an economic impact study, partly funded by the Cigar Association of America. This paper demonstrated and detailed the proposed $1.75 per cigarette pack increase, due to the language of AB1a, would have in fact tripled the OTP excise tax rate, increasing the current rate to 189%.
However, California is not out of the woods yet as a faith-based coalition is working to place an initiative on the November 2008 General Election ballot to increase the cigarette tax by 75-cents (resulting in a corresponding increase in the OTP excise tax rate). The petitioners are reportedly attempting to raise funds for their campaign and collect enough signatures to put the issue before a vote. However, supporters cannot begin collecting signature until the State Attorney General's office reviews the proposed initiative, and officially assigns it a title and summary (both are required to be published on petition sheets). Following the publicly gruesome death of Proposition 86 in the 2006 elections, it is not certain that the supporting group will succeed in collecting enough money to get the tax increase proposal to the ballot. As this issue develops, we will keep you posted.
Assembly Bill (AB) 2088 proposes a tobacco retailer to purchase an annual license for $100 per location. Currently, state retailers pay a one-time fee of $100 for a retail tobacco license. This bill is committee.
Iowa: HB2212 proposes to ban smoking statewide. Despite retail tobacco shops being exempt, this bill will severely restrict where premium tobacco customers may smoke, leading to a potential decline in retail sales, as has been witnessed in several states with similarly enacted prohibitions.
IPCPR has initiated an Action Alert to challenge and ultimately defeat HB2212.
Kansas: two bills are being considered in the legislature: SB542 proposes an increase in the OTP excise tax from 10% to 57%. This bill is not likely to pass, though we will keep an eye on it. A second bill, SB493, proposes to ban public smoking statewide. The Judiciary Committee, following testimony from IPCPR members and other witnesses, approved, by voice vote, to exempt retail tobacco shops and cigar bars-an official vote was expected to take place shortly after the voice vote. Final disposition of this bill is not known at this time. If necessary, the IPCPR will initiate an Action Alert.
Kentucky: House Bill (HB) 443 proposes an increase in the OTP excise tax from the current rate of 7.5% to 10%. The bill is currently in the Revenue and Appropriations Committee.
Maryland: A host of bills have been introduced in Maryland on a variety of issues-SB513 and HB1095, two identical (cross-over) bills currently before their respective committees, seek to increase the state's OTP excise tax from the current rate of 15% to 25% to fund tobacco cessation and prevention programs in the state.
An Action Alert has been initiated to challenge these bills.
SB363 proposes a $20 surcharge on all smoking pipes. As with the 2007 Fall Special Session, the Cigar Association of America (CAA), appears to have secured an exemption in this bill for briar, clay, and meerschaum pipes.
Another "paraphernalia" bill that would require detailed customer information collected at the time of the sale most likely will fail before gaining any ground. HB609, would require cigars to be sold in packages containing a minimum of five cigars exempt retail tobacco shops (as defined per the state's recently enacted statewide smoking prohibition).
Massachusetts: HB2980, a bill that would increase the OTP excise tax from 30% to 45%, is currently in the House Revenue Committee. Following this bill's introduction and assignment to the Revenue Committee, IPCPR retailers in the state collected petition signatures from their customers urging the Committee to oppose that tax increase. These petitions were submitted to Revenue Committee last month. We await further news of the tax increase proposal's disposition.
Mississippi-what's there to say-several bills proposing to ban smoking in the state and increase taxes were introduced and then died in their respective committees. One cigarette tax increase bill (from 18 cents to 68 cents per pack) has thus far survived the legislative process. This demonstrates that even one of the most stalwart, fiscally-reasonable legislatures is not completely safe from anti-tobacco legislation. We will continue monitoring legislation introduced in the capitol.
New Hampshire-Legislation that proposed an increase in the cigarette tax and a reclassification of other tobacco products and a subsequent taxation of cigars, failed in committee. The legislation would have subjected cigars (currently excluded from excise taxes) to a new rate of 60%.
Several bills have been introduced to revise the state's public smoking prohibition, though little is expected of these bills this session.
Oklahoma: SB1875 proposes to strike from the state's smoking ban exemptions for bars, restaurants, and taverns. Retail tobacco shops will continue to be exempt from the state statute.
Pennsylvania: several statewide smoking ban bills sit in their respective committees, seeing little action in recent weeks. We will continue to monitor these bills.
Rhode Island: Several bills have been introduced to revise the state's public smoking prohibition. No disposition on these bills or projected prognostication is available at this time.
Virginia: Several statewide smoking ban proposals failed to pass in the legislature. However, as the session has not yet adjourned, any of these bills may be brought back for consideration by the legislature.
The IPCPR has initiated an Action Alert on this legislative issue.
Washington: Following the approval of a 2006 ballot initiative that bans smoking statewide, including retail tobacco shops, efforts to revise the state statute through the legislature have not gained enough support for success. An upstart coalition of Washington IPCPR members has filed the initial paperwork for a ballot measure. The measure would ask voters to allow smoking in retail tobacco shops and cigar bars. According to a recent independent, media-sponsored poll, an overwhelming majority of Washington voters said they would vote in favor of such an initiative. We will keep you posted on this ambitious plan.
The International Premium Cigar and Pipe Retailers is a not-for-profit trade association organized as the advocate for the independent retail tobacconist and recognized as the "Voice of Authority and Reason" on premium tobacco related issues.
International Premium Cigar & Pipe Retailers Association (IPCPR)
Chris McCalla
Legislative Director