When is an adult not an adult? That question is being asked more frequently as an increasing number of states, and now local governments, seek to place further restrictions on the sale of tobacco products by raising the legal age to purchase tobacco products. However, raising the legal age also has unintended financial consequences for retailers and state governments.
Current Age Range
Forty-six states have laws that set 18 as the legal age for an individual to buy tobacco products, while Alabama, Alaska, New Jersey and Utah have adopted laws that allow adults 19 and older to buy tobacco. This year, state legislatures in Colorado, Hawaii, Maryland, Rhode Island, Utah and Vermont considered bills to raise the legal age to 21, but all of these bills failed. At the same time, Massachusetts has a bill pending to raise the age to 19; New Jersey has a bill pending that would raise the age to 21; and the New York legislature is considering two bills, with one setting the legal age at 19 and the other at 21.
On the local level, 34 cities in Massachusetts have adopted 21 as the legal age, and seven towns have enacted 19 as the legal age. Other local laws with a minimum legal age of 19 include Fruitland, Idaho; Glen Cove, N.Y.; and Onondaga County, N.Y. Cities and counties with a requirement of 21 include American Falls, Idaho; Hawaii County, Hawaii; Longview, Wash; New York; Pompano, Fla.; and Suffolk County, N.Y. Proposals to raise the age to 21 are being considered by Columbia, Mo.; Evanston, Ill.; Hackensack, N.J.; Honolulu; Los Angeles; and Teaneck, N.J.
FDA Age Study
While states and cities consider law changes to raise the legal age, the U.S. Food and Drug Administration (FDA) has funded a study through the Institute of Medicine to determine if raising the legal age to purchase tobacco products to 21 or to 25 would have a public-health impact.
The study is a requirement of the Family Smoking Prevention and Tobacco Control Act, the law that Congress passed authorizing the FDA to regulate tobacco products. The legal age study should be concluded and presented to the FDA by next April or May, which in turn must then make a report to Congress on the conclusions of the study.
Financial Effect
Whenever a city or state raises the legal age to buy tobacco, there is a twofold financial effect. First, the monetary impact on retailers can be measured in lost sales of cigarettes, smokeless tobacco, cigars and e-cigarettes to adults who are no longer allowed to purchase legal tobacco products. This sales loss is then magnified by a loss of gas, food and beverage sales if those adult customers who are no longer permitted to buy tobacco products patronize nearby stores in another city that allows adults age 18 or older to buy tobacco products. In short, a local law raising the legal age penalizes retailers who have complied with the law and sold tobacco products to adults of all ages.
The second financial effect is on the state level if a state enacts a higher legal minimum age. For example, in New Jersey, the state’s Office of Legislative Services estimates that cigarette and tobacco tax revenue, as well as sales tax collections, will decline an estimated $19 million annually if the bill proposing to raise the minimum legal age from 19 to 21 is enacted into law. This financial ramifications would certainly be greater if the legal age were being increased from 18 to 21 because 18-year-olds would be also be unable to buy tobacco products. Moreover, the fiscal report for New Jersey also cautions that raising the legal age may reduce the annual payments to the state from cigarette manufacturers made under the Tobacco Master Settlement Agreement, because cigarette sales volume is a major component in the payment formula.
Questionable Effects
Advocates of a higher legal age to purchase tobacco products claim that raising the minimum age may reduce the underage use of tobacco products. However, setting the legal age to 19 or 21 may not have a significant effect on the underage youth smoking rate. According to the Centers for Disease Control and Prevention (CDC), 90% of youth that smoke begin doing so before the age of 18. Based on this CDC estimate, the question to ask is: How will enacting a law to raise the legal age above 18 result in a decrease in underage tobacco use when the youth already begin using tobacco products before they reach 18? That is, if the real problem is with youth who are 17 or younger, how will raising the legal age to 21 affect these minors?
Another question that advocates have not seriously addressed from a policy standpoint involves where underage youth obtain tobacco products. The annual National Youth Tobacco Survey conducted by the CDC reports that about 75% of underage youth who use tobacco products obtain them from sources other than a retail store. These sources include friends, family members and other adult age individuals who legally purchase the products, then provide them to the minor.
This issue of social sources may not seem relevant to proposals to raise the legal age to buy tobacco products, but that is not the case. Those 18-, 19- and 20-year-olds who buy and use tobacco products will either drive a short distance to a nearby city that permits all adults to buy tobacco products, or rely on friends and family members who are 21 or older to legally purchase and give the products to them.
Raising the legal age to purchase tobacco products does not solve the issue of underage use of tobacco and will cause younger adults to travel to neighboring cities or use social sources to continue to obtain tobacco products. That is, changing the legal definition of who is and who is not an adult for purposes of tobacco purchases will not result in an outcome sought by proponents of such a law change, but will cause financial harm to law-abiding retailers and a negative tax revenue impact to states.
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