No Tax on Off Brands?

Cash hungry lawmakers are looking at a 50-cent per pack tax on off-brand, cheap cigarettes as a way to raise money. Many of the small cigarette makers are exempt from payments to the state under the tobacco settlement, so lawmakers say the tax is a fairness issue, but the little guys are fighting back.

Their names are different; Checkers, 305's Chandlers. What they have in common is that they are off-brand, aren't mass marketed, and their manufacturers aren't part of the massive tobacco settlement.

Senate President Jim King thinks that makes them fair game for coughing up 50 cents a pack to the state.

"They were not put in the pot initially because at the time they were very, very insignificant, less than two percent of the market, now they've got over 16," says King.

Some brands would be taxed, while others made by Liggett, the whistleblower in the tobacco lawsuit, would not. The state's only cigarette makers, Delsal Tobacco of Miami, say the inconsistencies would put them out of business.

“Tax us all, but tax us equally. A settlement isn't a tax, the amounts that are being paid by these other companies do not represent a tax," says Yolanda Nader, President and CEO.

Adding 50 cents a pack or $5.00 a carton to low-cost Checkers would put them at about $23.50 a carton, that still about $10 less than these name brands.

Brown and Williamson lobbyist Mac Stipanovich says the 50-cent tax is all about fairness.

"It disadvantages the tobacco companies that do contribute and it costs the state we're guessing between $80 and $100 million a year."

Even if the legislation gets to the governor, there's no guarantee he will sign it, but the governor isn't ruling out the tax if it makes it to his desk, which means that some smokers may be coughing up more cash in the near future.

The tax legislation is up for a key vote in a House committee Wednesday.


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