Tobacco industry: Tax smokeless products based on weight

(AP file photo/Mark Lennihan)

COLUMBUS, Ohio (AP) – The tobacco industry is calling on Ohio lawmakers to change how the state taxes moist smokeless tobacco products.

Monte Williams, representing the Altria Group and affiliates Philip Morris and U.S. Smokeless Tobacco Co., testified Wednesday before the Ohio 2020 Tax Policy Study Commission, a panel tasked with developing long-term state tax changes.

Williams said that Ohio’s price-based system “is broken and needs to be fixed,” The Vindicator in Youngstown reported.

More discount brands have entered the market and are costing the state money, he said. He advocated taxing moist smokeless tobacco based on weight instead of price.

“When your average price goes down, your tax goes down, too,” Williams said, adding that prices go up and down.

Williams said 22 states tax moist smokeless tobacco based on weight – 16 of which made the change in the past decade.

But Micah Berman, an assistant public health and law professor at Ohio State University, said the weight-based tax doesn’t keep pace with inflation, The Blade newspaper in Toledo reported, and would hinder efforts to reduce tobacco usage and would ultimately cost the state money.

“So just imagine if Ohio’s (other tobacco) tax had been set by weight in 1993. Such a tax would be about 60 percent lower today in real dollar terms than a price-based tax. . Such a tax would be a very good deal for Altria, but would be less effective in both reducing tobacco use and in generating revenue for the state,” he said.

Such a move, Berman said, could push consumers toward lighter products that aren’t proven to be less dangerous. The products would also be more affordable for youths.

The Blade newspaper said most non-cigarette tobacco products are taxed at 17 percent of their wholesale price. Cigarettes are taxed at a flat rate of $1.60 per pack.

What others are clicking on:

NBC4i.com provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others and keep the conversation on topic and civil. If you see an inappropriate comment, please flag it for our moderators to review.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s