Tobacco

NATO, Retailers Fight Tax Increases in Missouri and Cook County, Ill.

In one week, the voters in Missouri will go to the polls and be faced with voting on Proposition B, a ballot question that would raise the state’s cigarette tax from the current $0.17 per pack to $0.90 per pack, increase the tax rates on roll-your-own tobacco to 25% of the manufacturer’s price and on other tobacco products to 15% of the manufacturer’s price. NATO has distributed more than 350,000 business card-sized alerts to 304 retail member stores across Missouri to hand out to customers as a reminder to vote “No” on Proposition B on Nov. 6.

Last week, NATO retail members coordinated an effort to respond to a proposed $1.00-per-pack increase in the Cook County, Ill., cigarette tax. Currently, the county assesses a $2.00-per-pack tax. If the county cigarette tax were to be increased by another $1.00 per pack, the aggregate cigarette tax on a pack of cigarettes sold in Chicago would be $6.67, which would include the $3.00 county tax, the State of Illinois cigarette tax of $1.98 per pack, the federal cigarette tax of $1.01 per pack, and the City of Chicago cigarette tax of $0.68 per pack.

NATO submitted a letter to the Cook County Board of Commissioners arguing that another $1.00 increase in the county’s cigarette tax would lead to even more tax evasion than already exists in the county, widen the black market for cigarettes, and result in retail job losses and possibly even store closures. Several NATO retail member representatives were assisted with preparing to testify last Friday during a public hearing held by the Cook County Board of Commissioners and sending in a letter to the board members urging them not to adopt the cigarette tax increase. During the hearing, county board members requested more information on the impact of increasing the cigarette tax on local retail store sales, the extent of cross border activity if the tax increase were to go into effect and the loss of cigarette tax revenue by the county if the extra $1.00 per pack tax was adopted. The retailers are responding to this request for information with economic impact data.

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