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Posts Tagged ‘tobacco tax’

Contraband Cigarettes Sales Increased in Virginia

Thursday, September 6th, 2012

hilton cigarette onlineCigarette contraband has become so profitable that it is attracting organized crime and former drug contrabandists, Virginia Crime Commission staffer Stewart Pettoe declared on Wednesday, during a study to the commission on cigarette smuggling in and from Virginia. He quoted an unnamed Virginia State Police agent as reporting the profit margin on illegally trafficked cigs is now higher than on cocaine, heroin, marijuana or guns. A Wall Street Journal post from 2009 mentioned at least one incident in which criminals were ready to trade cocaine for cigarettes, that’s how high the profit margin is.

Pettoe argued that cigarette trafficking has existed for years. But as the difference among states’ tax rates has extended in recent years, the problem has worsen.

“We see data in the field that just in the last year it is blooming in the commonwealth,” Pettoe told.

That’s because Virginia has the second-lowest cigarettes tax in the nation, at 30 cents a package (2010 figures give Missouri’s tax as the lowest, at 17 cents). Every state to the north has a higher tobacco tax, and by the time you reach New York state, the tax is $4.35 a package.

Adding on federal taxes and other costs means that a carton of Marlboro cigarettes that costs almost $40 to $45 in Virginia costs more like $120 to $150 in New York City.

Truck 1,500 cartons of Virginia cigs to the Big Apple and you could see a $100,000 income. That’s assuming you even take legally purchased smoking products; traffickers also deal in cigs without Virginia tax stamps, as well as contraband cigarettes and those with fake stamps.

Small Cigarette Makers Could Pay Extra Tax

Thursday, August 16th, 2012

buy pall mall cigaretteSmall cigarette makers could be facing a tax increase after the 2013 legislative session if three large tobacco industries get their way. The Texas House Ways and Means Committee held a hearing Tuesday in expectation of a cigarettes tax law that will maybe come up in the next session. The legislation would essentially impose an extra tax on small tobacco companies to regulate what the big tobacco companies call a competitive benefit because of high pricing. In an equal law that failed to pass in the last session, authorities estimated that the taxes would result in an extra $25 million for the state.

The three large cigarette  makers, Philip Morris USA, R.J. Reynolds Tobacco Company and also Lorillard Tobacco Company, at this time pay the state extra charges under a 1998 lawsuit settlement in which the Texas alleged they were misleading tobacco consumers about the health reflection of their smoking products, and advertising to kids. Because they pay more fees, their cost per cigarettes carton is more.

Keith Teel, a lawyer who represents the big tobacco companies, declared the committee that this competitive disadvantage has ended in those companies losing 10 per cent or more of their tobacco market share, which used to be 98 per cent before the fee was enforced.

The smaller tobacco companies argued that they did not mislead their clients, so they weren’t sued and are therefore not part of the settlement. But Teel argued that the settlement was about more than that. He said that the fees make up for health care costs devolved by the state because of smoking and that all tobacco companies should therefore be subject to such a fee.

“Right now, you’re not getting anything to cover health care costs incurred by the products they sell,” Teel told the committee.

Yolanda Nader, chief executive at Dosal Tobacco Corporation, said the small tobacco companies can’t give an additional tax, which would in the end put them out of business cost the state money in the long run.

Smuggled Tobacco Products into Egypt

Monday, April 2nd, 2012

best quality karelia cigaretteCigarettes smuggled into Egypt include chemicals that can further heighten the risk of cancer for smokers, claims a new study by the National Research Centre (NRC). Egypt’s largest cigarette-maker, Eastern Company, commissioned the Cairo-based NRC to examine the components of smuggled cigarettes which typically retail for less than half the price of licenced brands.

Made outside the country then brought in illegally, bypassing tax and health regulations, such cigarettes are estimated to make up 20 per cent of Egypt’s market, British American Tobacco said recently.

NRC’s study include 10 smuggled brands, including ‘Malimbo’, ‘MJ’ and ‘Roseman’.

The centre subsequently issued a letter to “whom it may concern” indicating that one particular component they found could “lead to irregularities in cell split which increases the possibility of developing malignancy”.

Another component causing “harmful effects to the neurosystem” was also identified by Egypt’s largest governmental research body. Consumers interviewed by Ahram Online, however, were dismissive of such findings.

Mahmoud El-Shazli, in his early 40s, had since his teenage years smoked Cleopatras, Egypt’s most popular cigarette, made bythe state-owned Eastern Company.

Nine months ago he shifted to Malimbo. He rejected claims about the “extra-harmful” side-effects of his new choice.

“They keep on saying it causes all sorts of bad stuff but that’s not true,” the public worker insisted, brandishing the butt of a Malimbo. “This cigarette are discounted and Gain Popularity.”

Malimbo typically sells at LE4 per pack while Cleopatra retails for LE7.

Cigarette smuggling has surged since the outbreak of Egypt’s uprising in January 2011 and the partial collapse of former president Hosni Mubarak’s security forces.

Only three companies are licenced to make and sell cigarettes in Egypt; the current market leader Eastern Company, British American Tobacco and Philip Morris International.

In a move to combat cigarette smuggling, Egypt’s government said last week that all local cigarettemanufacturerswould be obliged to stamp their products by the beginning of June.

Company officials, however, say such efforts will do little to solve the problem that has cost them precious market share.


Cigar Industry Fight Tobacco Tax

Thursday, February 9th, 2012

buy marlboro cigarettesThe cigar industry is preparing to fight a tobacco tax that health advocates hope to push through the General Assembly next year. The International Premium Cigar & Pipe Retailers Association, which represents thousands of mostly mom-and-pop cigar stres, said it is organizing in hopes of preventing the proposed tax on cigars and others tobacco products other than cigarettes from passing.

“Maryland voters are sick of increased taxes disguised to obscure government over-spending and they are tired of being told what to do and how to behave,” Bill Spann, CEO of the IPCPR said in a statement.

Maryland Citizens’ Health Initiative is pushing for the the new tax. They successfully pushed dime-a-drink tax on alcohol through the last General Assembly session.

The group published a recent telephone poll of more than 800 people that found that two-thirds of Maryland voters supported a cigar tax. The group said the poll by Opinion Works also found that about 72 percent of Maryland voters like the idea of taxing cigars and smokeless tobacco at the same rate as cigarettes.

The group believes increasing the tax will cut consumption and fund health care programs, especially among youth who have adopted the use of cigars, especially flavored ones.

As of 2010, 15.2 percent of adults and 14.1 percent of high school students in Maryland were smokers.

The cigar stores say the argument by health advocates is a misguided effort to prevent underage smoking. Youth can’t afford cigars which cost $6 to $30 and they industry has strict policies against underage sales, Spann said.

He said a tax would hurt small businesses and kill jobs.

Alabama Lawmakers Looking for a Cigarette Tax

Wednesday, January 4th, 2012

tax free glamour cigarettesOnce again Alabama lawmakers are looking at a sin tax to help the state with its troubles. Birmingham Rep. Pat Todd is backing a proposal to put a 40 cent tax on a pack of discount Glamour cigarettes.

“We know raising the cigarette tax has two impacts. It gives more money to the general fund and it helps people quit smoking” Todd said

The democratic lawmaker says Alabama is below the national average in taxing cigarettes including surrounding states. Still, Vestavia Hills republican representative Jack Williams says the GOP-dominated legislature is not interested in passing new taxes.

“These are tough economic times, no question. I don’t think there is huge support for that proposal or any proposal like that at the moment,” Williams said.

But Todd says with dire predictions for the state Medicaid agency and prisons, lawmakers will have to take steps not to take massive cuts.

“I think it’s detrimental when any policy maker makes an ultimatum about something. I would never do this or I would never do that. It locks them in,” Todd said.

Alabama taxpayers are split over the idea.

“It’s more of a luxury thing for somebody. I things like alcohol and cigarettes should be taxed more than things like food. Things you actually need,” Jacob Garner said.

“I don’t trust the government of Alabama to use it the right way. They will put an earmark on it and use it for something else,” John Glaze said.

New Tobacco Tax Proposals in the City of Chicago

Tuesday, November 15th, 2011

discount prima lux cigarettesThe International Premium Cigar & Pipe Retailers Association is objecting to new tobacco tax proposals by Cook County Board President Toni Preckwinkle and two alderman in the City of Chicago by calling them ‘jobs-killing and business-busting.’

Preckwinkle has proposed a county tax on other tobacco products (OTP) which includes all tobacco products other than pre-packaged cigarettes which have been taxed by the county at the rate of $2 per pack since 2006. That would be in addition to the state’s 18 percent OTP excise tax and other state and federal taxes. The Aldermen Matthew O’Shea and Leslie Hairston are considering similar increases for the city of Chicago.

The proposed new County tax include $1.20 per ounce for pipe and cigarette tobacco as well as $.60 per ounce for smoking best Prima Lux cigarettes and smokeless tobacco, $.30 per large cigar and $.05 per little cigar. A committee of the Cook County Board of Commissioners approved the increased tobacco taxes yesterday along with a 50 percent hike in county alcohol taxes. A final vote is expected yet this week.

“This is wrong on so many levels,” said Bill Spann, chief executive officer of the IPCPR. “First of all, Cook County and Chicago residents and consumers are already paying high taxes on all tobacco products. If the County Board or City Council increase those taxes, consumers will take their business elsewhere. In addition, bootlegging of tobacco products will be encouraged, as will their purchase over the Internet, neither of which generates taxes for any federal, state or local entity.”

Currently, the county is facing a projected budget shortfall of $315 million and the city of Chicago is bracing for significant budget cuts.

“That means not only would Chicago and Cook County not gain as much in additional tax revenues it may be projecting, but whatever tax revenues they are currently receiving will be reduced as consumers go elsewhere to make those and other purchases,” he said.

Spann took the analysis further.

“When consumers take their business elsewhere, jobs are lost and businesses are hurt. Many of those businesses will be forced to close,” he explained. “That’s not in the best interests of Cook County residents – whether or not they use tobacco products. Everyone would be affected negatively by jobs-killing and business-busting taxes like these.”

Cook County Inspectors Accused of Taking Cigarette Tax Grafts

Friday, October 21st, 2011

best quality robinson cigarettesTwo Cook County revenue investigators have been fired for allegedly accepting “thousands” of dollars in bribes — hush money from convenience stores and other outlets selling cigarettes without paying the local tobacco tax.

That’s according to a new report released Thursday by Cook County Inspector General Patrick Blanchard, who launched an investigation earlier this year after the Revenue Department passed along a tip they received about the bribery scheme.

Blanchard would say little about the probe, which is ongoing, but did he say the men “admitted their role when faced” with the allegations. One investigator even turned some of his ill-gotten gains in to Blanchard’s office.

Blanchard said the scheme cost untold thousands of dollars in lost revenues for the county.

The shakedowns unfolded when revenue investigators checked on retail outlets selling captain-black, according to Blanchard’s report. Vendors not paying the cigarette tax faced hefty fines but avoided that altogether by paying off investigators.

The investigation comes as County Board President Toni Preckwinkle and Sheriff Tom Dart crack down on retail outlets selling cigarettes without paying the tax.