new smokeless tobacco products and taxes 5 th national summit on smokeless & spit tobacco...
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New Smokeless Tobacco Products and Taxes
5th National Summit on Smokeless & Spit TobaccoSeptember 22, 2009
Ann BoonnCampaign for Tobacco-Free Kids
National Cigarette vs. Snuff Tobacco Sales, 2007-2008
7.2 billion packs
6.9 billion packs
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2007 2008
88.4 million pounds
94.8 million pounds
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2007 2008
Source: TTB Tobacco Statistics
Taxed Cigarette Sales
- 4.2%
Taxed Snuff Sales
+ 7.3%
Examples of states with tobacco tax discrepancies
• Pennsylvania:– Cigarette tax rate: $1.35 per pack– NO tax on smokeless tobacco products
• Tennessee:– Cigarette tax rate: 62¢ per pack
(roughly 27% of the average cigarette wholesale price)
– Smokeless tobacco tax rate: 6.6% wholesale price
LOW-WEIGHT MOIST SNUFF
Traditional Moist Snuff Smokeless 1 tin = 1.2 to 1.5 oz.
Marlboro Snus1 “foil pack” (6 pouches) = 0.1 oz.
Camel Snus1 tin (15 pouches) = 0.32 oz.
UST Skoal Pouches1 tin (20 pouches) = 0.82 oz
MORE LOW-WEIGHT MOIST SNUFF
Stonewall Hard Snuff1 box of 20 “Pieces” = 0.335 oz.
Camel Orbs1 box of 15 “Pieces” = 0.12 oz.
Weights of other Camel Dissolvables currently unavailable
Ensuring states adequately tax smokeless tobacco products
1) Percentage of price tax system, with minimum tax (BEST)
2) Modified weight-based system
3) Simple percentage of price
4) Simple weight-based system (WORST)
Revenue Losses From Standard Weight-Based Tax on Moist Snuff (in constant dollars)
$50
$60
$70
$80
$90
$100
Base Year Year 1 Year 2 Year 3 Year 4 Year 5
Projections assume stable consumptionand sales over time, with inflation at 2% per year.
Differences in State Revenues From Different Ways of Taxing Moist Snuff
-- An Historical Perspective --
$100.0
$110.0
$120.0
$130.0
$140.0
Base Year Year 1 Year 2 Year 3 Year 4 Year 5
Weight-Based Tax Percentage-of-Price Tax Percentage-of-Price w/ Minimum
[Based on actual 2000 to 2005 moist snuff sales price and volume data for from the U.S. Federal Trade Commission, and on recent industry data on the moist snuff market share and average prices of premium, value and discount brands.]
FIXING SMOKELESS DEFINITIONS
“Smokeless tobacco” means snuff or chewing tobacco.
“Snuff” or “Moist Snuff” means any finely cut, ground, or powdered tobacco that is not intended to be smoked [that is intended to be placed in the nasal and/or oral cavity]
“Chewing tobacco” means any leaf tobacco that is not intended to be smoked.
“Smokeless tobacco” means snuff or chewing tobacco and also includes any other product containing tobacco that is intended or expected to be consumed without being combusted.
Last Point:
Put OTP tax revenues towards tobacco
prevention and cessation!
If You Ever Need Help (factsheets, projections, model legislation):
www.tobaccofreekids.orgor
http://tobaccofreekids.org/research/factsheets
202-296-5469