TOBACCO
Another Active Year Taxes, flavor bans and the future of alternative tobacco products are still on the table By Melissa Kress
to be another active year for tobacco regulation and legislation.
2022 COULD PROVE
The calendar may have flipped but, as has become typical with the tobacco category, the same issues remain on the table: taxes, flavor bans and the future of alternative products. During the 2021 congressional session, Congress considered a budget reconciliation bill that included significant increases in the federal tax rates for cigarettes and other tobacco products (OTP). Those increases were since removed from the bill, which as of press time had yet to be considered by the full U.S. Senate. "Even though the tax increases are no longer in the bill, it is important to understand how significant the increases would have been, and because of the industrywide effort, those increases were deleted from the legislation," Thomas Briant, executive director of the National Association of Tobacco Outlets (NATO), said during a recent industry presentation delivered as part of the 2022 Tobacco Plus Expo (TPE). According to Briant, changes under the congressional proposal included:
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• A 100-percent increase in the federal cigarette tax, from $1.01 per pack to $2.02; • The tax on large cigars would have changed in two respects: one change was to a dollar amount tax of $49.56 per pound, and the other would have implemented a minimum tax of at least 10 cents per cigar; • The tax on moist snuff would increase 1,700 percent to $26.84 per pound; and • A tax was proposed on modern oral nicotine and vapor products to $1.15 per pod or $4.45 per 20-pack of pouches or lozenges. “The takeaway from this congressional attempt to raise tobacco taxes is that it could happen again,” Briant cautioned. “Federal tax rates were last raised in 2009 — that’s some 13 years ago. It is important to remain watchful for future congressional moves to raise tobacco tax rates, even though the legislation has not passed Congress as of yet.” The need to remain vigilant to any potential change to the federal tax rates is evidenced by the potential economic impact. According to a NATO-commissioned economic impact study, levy increases would have resulted in $801 million in lost sales, 14,000-plus lost jobs, and $1.26 billion in lost state cigarette and OTP tax revenue.
FDA Moves The past year was also a busy one for the Food and
