With the New Year having just begun, 2014 will likely be another busy year when it comes to tobacco-related issues. And just as in the past year, the New Year will involve local, state and federal tobacco legislation as well as the Food and Drug Administration (FDA) tobacco regulations.
The Local Front
With the number of local tobacco restrictions and ordinances considered by cities and counties and monitored and responded to by NATO doubling from 50 in 2012 to 100 in 2013, a significant increase in the number and kind of local tobacco regulations is almost assured again for 2014. With coupon redemption bans, multipack and promotional pricing prohibitions, flavored tobacco sales bans, and limits on the number of retail licenses issued for a particular city the most common kind of restrictions in 2013, these same regulations along with proposals to increase the legal age to purchase tobacco products and additional regulations on the sale and use of electronic cigarettes by local governments are to be expected in 2014.
The State of the States
The 2013 year was highlighted by the 35 state legislatures that considered cigarette tax and tobacco tax bills. With only Massachusetts, Minnesota and Oregon actually enacting state cigarette and/or other tobacco product tax increases during 2013, a number of the states that considered excise tax increases during their 2013 legislative sessions may very well take up the tax increase proposals again in 2014. However, 2014 is an election year and with the economy slowly improving, there may be some reluctance by lawmakers to enact tax increases.
With Minnesota currently the only state that assesses an excise tax on e-cigarettes (at a rate of 95% of the wholesale price), other states may debate bills to impose some kind of tax on electronic cigarettes in 2014. Some of those states may include Hawaii, Massachusetts, Oklahoma, South Carolina and Utah, all of which considered bills, but did not enact taxes on electronic cigarettes in 2013. These bills included various methods to tax electronic cigarettes including a tax based on a percentage of the wholesale price, the application of the state’s cigarette tax rate, and a flat rate tax of five cents per nicotine cartridge, with a limit on the tax per cartridge being no greater than one tenth of the tax on traditional cigarettes. However, some states may wait until the FDA issues proposed regulations on electronic cigarettes to see how the agency classifies this new electronic product before legislation is introduced to tax electronic cigarettes.
The Federal Level
While President Obama initially proposed in early 2013 to raise the federal cigarette tax by 95 cents per pack with a proportionate 93% increase in the federal tobacco products tax rates to fund the expansion of early childhood education, Congressional lawmakers introduced legislation late in 2013 that does not include an increase in the cigarette and tobacco products tax rates to fund the education program.
In 2013, the FDA received more than 174,000 comments submitted on-line and upwards of 50,000 written comments in response to the agency’s request for additional information on the use of menthol in cigarettes, it will take time for the FDA staff to review all of these comments and determine what additional regulatory action, if any, should be proposed for menthol cigarettes. With the FDA not under any time deadline to make a determination on whether to propose additional regulations on menthol cigarettes, it is not known whether the agency will actually issue new proposed regulations on menthol cigarettes during 2014.
In December of 2013, the FDA announced that proposed regulations on cigars, pipe tobacco, electronic cigarettes and/or hookah tobacco would be released sometime by the end of 2013. However, the FDA did not release proposed regulations on these other tobacco products by the end of this past year. The FDA is waiting for approval of its proposed regulations on cigars, pipe tobacco, e-cigarettes and/or hookah tobacco from the White House Office of Management and Budget and once the OMB finalizes its review of the proposed regulations, then the FDA will publish the regulations and request public comments.