LINCOLN, Neb. -- Lawmakers in Nebraska are considering a measure that would change the method of taxing chewing tobacco, according to an update on the state legislature's website.
Sponsored by State Senator Pat Engel (R), the bill would reclassify tobacco-related substances into three categories: smoking tobacco, which would include tobacco-related items that can be smoked, with the exception of cigarettes; tobacco products, which would include tobacco items intended primarily for chewing; and cigarettes, which are not impacted by the bill.
Under LB722, tobacco products would be [image-nocss] taxed at a rate of 65 cents per ounce. Currently, tobacco products are generally taxed at a rate of 20% of the wholesale price.
The bill is similar to a measure that was passed by the legislature in 2007, but was vetoed by the governor.
Engel said the current system places brand-name products at a disadvantage when compared to lower-cost generic products. "To me, this is an equity issue," he said. According to Engel, 11 states have already changed their method of taxing smokeless tobacco to a weight-based system.
State Sen. Ernie Chambers (D) argued that the current system of taxing tobacco products works because of its connection to the product's price. He also suggested the new bill would benefit a specific segment of the tobacco industry. "I do not think one part of a taxing structure should be cast aside to benefit one part of the industry," he said.
Chambers offered an amendment that would have increased the tax rate on tobacco products to 95 cents per ounce. That amendment failed on a 1 to 22 vote.
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