Tobacconists and their customers are once again in the crosshairs of Federal
tobacco tax increases. Please take a moment to read this important message.
As you may already know, the Federal government has determined that a tobacco tax increase is a valid funding mechanism for the State Childrens Health Insurance Program (SCHIP). Most of the news has centered on cigarette tax increases, which doesnt significantly affect Milan Tobacconists or our customers. However, cigars and pipe tobacco face hefty tax increases as well, and thats where you will be directly affected.
SCHIP is a federal program that provides health insurance through your state to children from families under, at, or near the poverty level. Now, of course, no one wants to see children go without health care, but the expansion broadens eligibility to such a degree that the children of legal immigrants are covered and, in certain cases, families with incomes at 300 percent of poverty level can enroll now removing their children from private health insurance coverage and enrolling them in SCHIP. The method of funding is unstable an astronomical tobacco tax increase on cigars, pipe tobacco, and cigarettes but its here now and all of us have to live with it.
Some details of the Federal tax increases, which go into effect April 1, 2009, follow:
Pipe Tobacco Tax Increase: From $1.10 per pound to $2.83 per pound.
Large Cigar Tax Increase: From a cap of $.05 per cigar to a cap of $.40 per cigar.
Small Cigar Tax Increase: From $.04 per pack to $1.07 per pack.
Cigarette Tax Increase: From $.39 per pack to $1.01 per pack. This is in addition to your respective state taxes.
Roll-Your-Own Tobacco Tax Increase: From $1.10 per pound to $24.78 per pound (not a typo).
Chewing Tobacco Tax Increase: From $.20 per pound to $.50 per pound.
Snuff Tobacco Tax Increase: From $.59 per pound to $1.51 per pound.
Please know that Milan has been fighting this increase through our lobbyists and member organizations for years, but, with the passing of the SCHIP legislation, it is now completely out of our control and we are as dismayed by the end result as you must be.
Yet another new tax has been introduced called the floor tax. This tax applies to any tobacco products (except cigars) that are on the tobacconists floor prior to the April 1, 2009, tax increase, so we will have to reduce our inventory levels in order to avoid an enormous tax burden. As a result, we will have very little pipe tobacco in our store by March 31st, which is why we recommend that you order several weeks in advance of the deadline. We will restock after April 1st, but, as with all other tobacconists, the new pipe tobacco prices will reflect the tax increases.
It is a sad state of affairs that tobacconists and their customers are once again being unfairly targeted by taxation. We have long believed that everyone should share in the burden of supporting uninsured children, not just you and our industry. Unfortunately, our hard-fought battle did not result in victory, but, believe it or not, the tax increases would have been even more staggering if we had not fought at all.
If you would like to voice your opinion regarding this decision, please visit
Contact Elected Officials: USA.gov and send a message to President Obama and your state-elected officials today!
.
