Don’t Tax Twinkies or Tobacco in Louisiana

As if a 2,700 percent federal tax increase on some tobacco products wasn’t enough, Louisiana lawmakers are trying to squeeze another 50 percent in state tax revenues out of Louisiana cigar smokers plus $.50 per pack of cigarettes and similar increases on other tobacco products.

"It’s as unfair and unjust as excessively taxing alcoholic beverages, snack foods, and automobiles because they make you drunk, fat or have accidents. Just because obesity is the nation’s leading cause of health problems, nobody should be taxing Twinkies and no one should be taxing tobacco, especially cigars and pipe tobacco, in order to manage how we live," according to Chris McCalla, legislative director of the International Premium Cigar and Pipe Retailers Association, whose 5,000 members and guests will be meeting in convention in New Orleans in August.

Legislation proposed by New Orleans’ Rep. Karen Carter Peterson barely squeaked out of committee this week by an 8-7 vote after twice being defeated and will be up for discussion on the House floor next week.

House Bill 889 would further tax Peterson’s constituents and others throughout the state by increasing the state tax on cigarettes by $.50 per pack and on hand-made cigars from the current 20 percent of cost to a proposed 30 percent – a 50 percent increase. The proposed pipe tobacco tax increase would go from the current 33 percent to 49.5 percent with similar increases for other tobacco products . Cigars and pipe tobacco represent a small percent of the tobacco market but they are the primary source of income and jobs for the nearly three dozen Louisiana tobacconists and their employees.

"Current tobacco taxes raised less than $400,000 for the state last year and many Louisiana tobacconists’ sales are already off by double-digits due to the federal tobacco tax increase that went into effect April 1, 2009," said Bob Winston, owner of the Tinder Box in Metairie, LA. "Tobacco is an unstable, eroding tax base which higher taxes will only result in closing businesses like ours, job losses and further tax deficits."

Winston and fellow tobacconists Rene Gerard, owner of Piper’s Haven in Lafayette and Sarah McCauley, co-owner of Bayou Tobacco, Inc. in Baton Rouge, are among several state tobacconists who appeared at House committee meetings in opposition to the Bill. They are all members of the IPCPR.

"Higher taxes on cigars and pipe tobacco will only drive whatever business is left into the hands of Internet, out-of-state and mail order merchants who do not pay taxes to Louisiana and do not employ Louisiana’s citizens. They do not have the same stake in our communities that we do with our family-owned businesses and neighborhood employees," said McCauley.

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