New Smokeless Tobacco Products and Taxes 5th National Summit on Smokeless Spit Tobacco September 22 2009 Ann Boonn Campaign for Tobacco Free K

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New Smokeless Tobacco Products and Taxes 5th National Summit on Smokeless Spit Tobacco September 22 2009 Ann Boonn Campaign for Tobacco Free K Powered By Docstoc
					   New Smokeless Tobacco
     Products and Taxes

5th National Summit on Smokeless & Spit Tobacco
               September 22, 2009

                Ann Boonn
       Campaign for Tobacco-Free Kids
  National Cigarette vs. Snuff Tobacco Sales,
                   2007-2008
                      Taxed Cigarette Sales               Taxed Snuff Sales

                                 - 4.2%                          + 7.3%
     8.0
                                               100.0

     7.0                                        90.0

     6.0                                        80.0
                    7.2                6.9              88.4          94.8
                                                70.0
     5.0          billion            billion           million       million
                  packs              packs      60.0   pounds        pounds
     4.0
                                                50.0

     3.0                                        40.0

                                                30.0
     2.0
                                                20.0
     1.0
                                                10.0

     0.0                                         0.0
                    2007              2008              2007          2008
Source: TTB Tobacco Statistics
     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.




         Camel Snus                                                 UST Skoal Pouches
1 tin (15 pouches) = 0.32 oz.                                  1 tin (20 pouches) = 0.82 oz

                                      Marlboro Snus
                            1 “foil pack” (6 pouches) = 0.1 oz.
 MORE LOW-WEIGHT MOIST SNUFF




     Stonewall Hard Snuff
1 box of 20 “Pieces” = 0.335 oz.
                                               Camel Orbs
                                     1 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)


$100




 $90




 $80




 $70




 $60




 $50
           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 --

         Weight-Based Tax                Percentage-of-Price Tax                   Percentage-of-Price w/ Minimum



$140.0




$130.0




$120.0




$110.0




$100.0
            Base Year              Year 1               Year 2                Year 3                Year 4                Year 5
            [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
         tobacco
chewing tobacco.and also includes any
other product containing tobacco that is
“Snuff” or “Moist Snuff” means any finely
intended or expected to be consumed
cut, ground, or powdered tobacco that is not
without being combusted.
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.
       Last Point:


  Put OTP tax revenues
    towards tobacco
prevention and cessation!
If You Ever Need Help (factsheets,
  projections, model legislation):

        www.tobaccofreekids.org
                  or
http://tobaccofreekids.org/research/factsheets

    factsheets@tobaccofreekids.org

              202-296-5469