WASHINGTON — A $3.5 trillion reconciliation package that Congress is considering includes a provision to substantially increase the federal excise tax (FET) on tobacco and nicotine products, a move NACS opposes. The language is from a bill that was previously introduced to Congress called the Tobacco Tax Equity Act.
The legislation, as written, doubles the federal excise tax on cigarettes and applies tax parity to all other tobacco products—including vapor, which was not previously taxed at the federal level, according to NACS, Alexandria, Va., which has warned that the proposed provisions could potentially harm the convenience and fuel retailing industry.
Currently the average cigarette smoker pays $1.01 in federal excise tax when purchasing a pack of cigarettes, according to the Tax Foundation. That amount would be raised to about $2 a pack if the provision is approved.
NACS opposes an increase of this magnitude because it will push current users to the illicit market where products are unregulated and age isn’t verified, undermining he responsible efforts of c-store retailers, the organization said. It led a letter to House leadership and members of the Ways & Means Committee opposing the increase on FET and is encouraging its members to contact their members of Congress to tell them not to pass the “potentially crippling tax increases while the U.S. economy continues to struggle to fully recover from the effects of the COVID-19 pandemic.”
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.