While the major tobacco companies pursue modified risk tobacco applications with the Food and Drug Administration, a number of bills are pending in state legislatures that would lower or eliminate tobacco product excise taxes for products that receive an FDA modified risk order. Continue Reading Major Tobacco Companies Pursue Legislation to Lower Taxes for Modified Risk Tobacco Products
Pending before the Mississippi Legislature is House Bill 906, which, if enacted, would increase the “tobacco equity tax” applicable to cigarettes manufactured by non-signatories to the State’s 1997 tobacco settlement agreement in Moore ex rel. State v. American Tobacco Co., et al., No. 94-1429 (Miss. Ch. Ct. Jackson Cnty.) (the “tobacco settlement agreement”). On January 11, 2018, the bill was referred to the House Ways and Means Committee, which is chaired by the bill’s principal author, Representative Jeffrey C. Smith (R-Dist. 39). Continue Reading Increase Proposed for Mississippi’s “Tobacco Equity Tax”
Coming under scrutiny in the 2017-18 session of the New York State Legislature, electronic cigarettes and other vapor products have been the subject of various proposed bills. Pending legislation could affect excise taxation, discounts, and warning labels. Some bills would even prohibit certain types of vapor products. Continue Reading E-Cigarette Bills Pending in New York State Legislature
A bill was introduced in the New Hampshire legislature on January 3, 2018 regarding the regulation of e-liquids. The bill, NH18-H.1812, specifically addresses labeling requirements for e-liquid products. Distributors and manufacturers of e-liquid products to be sold in New Hampshire would be required to add a product label which includes a list of ingredients in the product in accordance with the FDA’s food guidelines. Also, e-liquids could not contain diacetyl, acetyl propionyl, or acetoin or “any substance known to be hazardous when inhaled in accordance with federal Food and Drug Administration guidelines.” If passed, this bill would be in effect as of January 1, 2019.
Little has transpired on two bills that would expand and increase the excise tax on tobacco products. Pending in Congress are S. 1837, introduced by Senator Richard J. Durbin (D-Ill.), and H.R. 729, introduced by Congresswoman Brenda L. Lawrence (D.-Mich.). Continue Reading Bills that Would Expand and Increase the Tobacco Excise Tax Pending in Congress
On November 8, 2017, Congresswoman Diana DeGette (D-Colo.) introduced H.R. 4273. The next day, Senator Brian Schatz (D-Hawaii) introduced S. 2100. If passed, either bill would enact the “Tobacco to 21 Act.” The bills have been referred, respectively, to the House Committee on Energy and Commerce and the Senate Committee on Commerce, Science, and Transportation. Continue Reading Renewed Effort to Push “Tobacco to 21” Bills Through Congress
Just last year, Pennsylvania passed a draconian new tax on electronic cigarettes. Imposed at the rate of 40% of the retailer’s purchase price, the tax applies to all “electronic cigarettes,” which is defined to mean an “electronic oral device, such as one composed of a heating element and battery or electronic circuit, or both, which provides a vapor of nicotine or any other substance and the use or inhalation of which simulates smoking.” This term is defined to include both (1) a device, as described in the definition above, and irrespective how it is marketed, and (2) any liquid or other substance placed or sold for use in such a device. Continue Reading Legislation Proposed to Revamp Pennsylvania Vape Tax
Troutman attorneys Bryan M. Haynes and Robert S. Claiborne, Jr. were featured in the February 2017 issue of SMOKESHOP, a tobacco industry magazine, in an article discussing the Indiana Vapor Act. This article discusses the federal appeals court’s decision that Indiana’s Vapor Pens and E-Liquid Act is unconstitutional to the extent that it regulates out-of-state manufacturers of e-liquid products.
Read the full article here
On March 24, 2017, the Third Court of Appeals of Texas decided Hegar, et al. v. Texas Small Tobacco Coalition, et al., No. 03-13-00753-CV. The court held that a tax on nonparticipating or non-settling manufacturers (“NPMs”) did not violate either the Equal Protection or the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution. The law at issue, Subchapter V to Chapter 161 of the Texas Health & Safety Code (“Subchapter V”), taxed NPMs remaining outside of the Master Settlement Agreement (“MSA”) at approximately $0.55 per cigarette pack and companies subsequently joining the MSA at approximately $0.15 per pack. The case was of particular interest because Texas is not a party to the MSA, yet the MSA’s distinctions were the bases for Subchapter V’s. Continue Reading NPM Tax Valid Under U.S. Constitution, Says Texas Appellate Court
On occasion, a manufacturer of tobacco products may decide to use its permitted facility for another purpose, one that may exceed the permit or be altogether unrelated to the permitted use. For example, a manufacturer of tobacco products may decide to manufacture cigarette papers and tubes, or to process tobacco for third parties, or even to make a product similar to a cigarette that has no tobacco in the product. Some manufacturers have assumed that a tobacco producer permit will automatically cover its activity to also make these products, but it does not. Continue Reading Ramifications of Using the Permitted Area for Another Purpose