CHICAGO -- Beyond surprising voters and the media with the election of Donald Trump as the next president of the United States, voters this month decided many issues in several product categories that convenience-store retailers will begin dealing with in the coming months and years.
Here’s a roundup of relevant changes in cigarette, beverage and gasoline taxes, marijuana sales, minimum wage and more …
Voters in four states considered tobacco-tax increases, only one of them gained approval.
- In California, the cigarette tax rate will increase by $2 per pack, and tax rates on other tobacco products, including electronic cigarettes, will increase an equivalent amount.
- In Colorado, voters narrowly rejected an amendment that would have increased the state cigarette tax by $1.75 per pack from the current 84 cents per pack to $2.59 per pack and raise the excise tax on other tobacco products by another 22% of the manufacturer’s list price.
- In Missouri, voters defeated two efforts to increase tobacco taxes. Amendment 3 would have increased the cigarette tax each year through 2020, at which point the additional cigarette tax would total an aggregate of 60 cents per pack and would have assessed a fee paid by cigarette wholesalers of 67 cents per pack on nonsettlement cigarettes. And Proposition A, also defeated, would have increased the cigarette tax in 2017, 2019 and 2021, at which point the additional cigarette tax would total an aggregate of 23 cents per pack and would also have increased the tax on other tobacco products by 5% of the manufacturer’s invoice price.
- In North Dakota, voters defeated Measure No. 4, which would have increased the cigarette tax by $1.76 per pack from the current 44 cents per pack to $2.20 per pack and would have raised the tax on other tobacco products from 28% to 56% of the wholesale price.
Voters in four states—California, Maine, Massachusetts and Nevada—legalized recreational use of marijuana in the Nov. 8 election, extending a trend across the country despite cannabis being illegal on a federal level.
The question of recreational marijuana was also on the ballot in Arizona, but voters there rejected the measure.
Additionally, residents in Florida, North Dakota and Arkansas voted to allow the sale of marijuana for medical purposes.
While some observers believe it’ll be a while before convenience stores can sell marijuana, the product holds promise for a channel facing declining tobacco sales.
Each state will ultimately decide its own parameters regarding sale and regulation, but the revenue generated could be in the billions. In the first half of this year, marijuana store sales in Colorado alone generated $458.7 million in revenue.
Three California cities—San Francisco, Oakland and Albany—approved a penny-per-ounce levy on distributors of nonalcoholic drinks with caloric sweeteners. The tax will affect everything from soft drinks and energy drinks to sports drinks and iced tea. In Boulder, Colo., voters approved a 2-cents-per-ounce tax.
Nearly two-thirds of Oklahoma voters elected to allow grocery stores in the state to carry full-strength wine and beer. The change won’t kick in until October 2018, and that should give retailers and brewers enough time to clear out stock of the 3.2%-alcohol-by-weight (4% alcohol by volume) beer they were forced to sell under state law.
Graphic courtesy of The Norman Transcript.
In Illinois and New Jersey, voters approved “lockbox” amendments that would dedicate gasoline-tax and other related revenues to transportation projects.
- Illinois voters said “yes” to the Safe Roads Amendment, which requires that state-collected, transportation-related funds—fuel taxes, vehicle license fees and more—only go toward vehicle- and transportation-related expenses. This includes costs related to building and repairing highways and bridges.
- In New Jersey, voters passed a constitutional amendment that devotes all gasoline-tax revenues to transportation projects. This would dedicate the potentially $1 billion or more in new revenue expected from the state’s recent 23-cent-per-gallon (CPG) fuel-excise-tax increase to road, bridge and mass-transit projects.
- And in Clark County, Nevada, the seat of Las Vegas, voters approved a 10-year extension of a fuel revenue index tax that had been implemented in 2013. With the extension, the gasoline tax would rise about 3.6 CPG each year in the next decade to raise an estimated $300 million per year for infrastructure projects. This would amount to a 98.32-CPG gasoline tax by 2026.
This election year, voters in four states—Arizona, Colorado, Maine and Washington—approved ballot measures to increase their state’s minimum wage to at least $12 an hour by 2020, well above the national minimum wage of $7.25 an hour. Here’s where and how the increases will play out.
- Arizona’s minimum wage will increase from $8.05 an hour to $12 an hour, starting with an increase to $10 in January 2017. Thereafter, the minimum wage will become $10.50 in 2018, $11 in 2019 and $12 in 2020.
- Colorado is also raising its state minimum wage to $12 an hour. The wage will increase to $9.30 from the current $8.31 rate on Jan. 1, with 90-cent increases to follow every year until 2020.
- Maine, which has a current minimum wage of $7.50 an hour, is adopting a $12 rate, as well. It will increase to $9 an hour in 2017, with $1 increases until 2020.
- Washington is increasing its minimum wage the highest, to $13.50 an hour. Starting Jan. 1, the minimum wage will increase to $11 from the current $9.47 rate, and then to $11.50 in 2018, $12 in 2019 and $13.50 in 2020.
- Conversely, a ballot initiative in South Dakota called for lowering the minimum wage for nontipped employees under age 18, but voters rejected the measure, with more than 70% opposing it.