New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September...

12
New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids

Transcript of New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September...

Page 1: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

New Smokeless Tobacco Products and Taxes

5th National Summit on Smokeless & Spit TobaccoSeptember 22, 2009

Ann BoonnCampaign for Tobacco-Free Kids

Page 2: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.
Page 3: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign 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%

Page 4: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

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

Page 5: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

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

Page 6: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

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

Page 7: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

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)

Page 8: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

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.

Page 9: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

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.]

Page 10: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

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.

Page 11: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

Last Point:

Put OTP tax revenues towards tobacco

prevention and cessation!

Page 12: New Smokeless Tobacco Products and Taxes 5 th National Summit on Smokeless & Spit Tobacco September 22, 2009 Ann Boonn Campaign for Tobacco-Free Kids.

If You Ever Need Help (factsheets, projections, model legislation):

www.tobaccofreekids.orgor

http://tobaccofreekids.org/research/factsheets

[email protected]

202-296-5469