Tobacco rivals lobby for smokeless tobacco

The pursuit of a reduced-risk niche for smokeless-tobacco products has put archrivals Reynolds American Inc. and Philip Morris USA on the same lobbying path.
It's not likely the manufacturers will collaborate on their efforts to convince the Food and Drug Administration to position smokeless tobacco as part of a potential middle ground between cigarettes and nicotine-cessation products such as gum and patches.
In recent years, the manufacturers have bought their way into highly competitive marketplace positions in moist snuff.
Reynolds is considered as the industry leader in innovative smokeless products, while Philip Morris is dipping its toes with Marlboro Snus in test markets.
Still, having the top two U.S. cigarette companies pushing for regulatory changes may lend itself to more clout together than either could get on its own.
"This is truly historic, as the largest tobacco companies are now advocating regulatory policies to reduce cigarette consumption, disease and death," said Bill Godshall, the executive director of SmokeFree Pennsylvania. The group is among the leading advocates for promoting smokeless products as a less-harmful alternative to cigarettes.
"I'm extremely pleased they've decided to prioritize consumer health over short-term cigarette revenue and profit."

Tenn. Attorney General Sues Cigarette Manufacturer

Tennessee's attorney general is seeking an injunction that would require a Colombian cigarette manufacturer to make back payments of $300,000 to the state and pay penalties.
According to a news release from Attorney General Bob Cooper's office, Procesadora Nacional Cigarillera, or Pronalci, is required by law to make payments into an escrow account for all cigarettes sold in Tennessee. The money is to cover the health care costs incurred by the state to treat smokers in Tennessee.The lawsuit states the unpaid fees are from cigarettes sold in Tennessee in 2009.

Connecticut going after online cigarette buyers

Connecticut officials are going after more than 900 state residents who bought cigarettes on the Internet but didn't pay state sales taxes as required by law.
The Department of Revenue Services announced Thursday that it mailed sales tax bills to 928 people this week, based on information provided under federal law by companies that sell cigarettes online.
The state's cigarette tax jumped from $2 to $3 a pack on Oct. 1 as state officials sought to boost revenue because of the state budget deficit. Connecticut's cigarette tax is the second highest in the country, after Rhode Island's $3.46 per pack tax.
The bills mailed this week are for sales tax and interest owed for online cigarette purchases made between 2007 and 2008.

Cigarette Tax Increase?

Next year smokers might be paying even more for cigarettes.
Governor Mark Parkinson is considering a tax increase for a pack of cigarettes. The increase might help healthcare or plug holes in the state budget.
Currently, the state's cigarette tax is 79 cents a pack. The tax was last raised in 2002, when lawmakers used the new revenues to plug budget holes. Since then, they've resisted further increases to raise money for health programs.

Deputy’s observation leads to 2 arrests in burglary

Two Elkmont brothers have been arrested in connection with a burglary and cigarette theft at a Salem convenience store, an official said.
Joel Dwight Gooch Jr., 24, and Joshua Matthew Gooch, 21, both of 22574 Easter Ferry Road, were arrested Saturday on one count each of third-degree burglary, said Limestone County Sheriff’s Chief Investigator Stanley McNatt.
They are accused of breaking the glass in the front door of Discount Food Mart in the Salem community on Saturday morning and stealing assorted cartons of cigarettes of undetermined value, McNatt said.
“A video camera caught them and even their truck,” McNatt said.
The video images were sent to other law-enforcement agencies along with a description of the vehicle.
While on patrol that same morning, Deputy Tom Gilbert saw a truck fitting the description on Poplar Point Road.
“He was very observant in noticing the vehicle,” McNatt said.
Gilbert called Sheriff Mike Blakely, and together the two recovered some of the cigarettes at a home on Easter Ferry Road that belonged to the brothers’ relatives, McNatt said. The two recovered most of the cigarettes, as well as the suspects, on Poplar Point Road, he said.
Each remained in the Limestone County Jail in lieu of posting $2,500 bail.

Cigarettes seized in Cork city

Over 300,000 cigarettes and about 10kgs of tobacco was discovered today during a customs operation in Co Cork.
The items, which have an estimated retail value of €130,000 were seized during a search of three houses in the north side of Cork city earlier today.
A commercial vehicle and saloon car were also seized during the operation.
Revenue officials estimate the loss to the exchequer from the cigarettes and tobacco would have been about €100,000.Investigations are ongoing.

Cloverdale fuming over tax-free tobacco shop

A new tobacco shop in Cloverdale is prompting complaints that its American Indian owners enjoy an unfair advantage by not charging sales tax.
When Native Tobacco 101 opened this month, it not only brought cheap cigarettes to Cloverdale, it also touched on a national controversy over Indian smoke shops and the taxes they sometimes avoid.
The shop manager confirmed he does not charge any state or other taxes, such as the 7.75 percent sales tax his competitors are required to levy.
“It seems to me an unfair business practice,” said Cloverdale Mayor Carol Russell, who worries about the effect the new business may have on several “mom and pop” stores that sell tobacco.
“What is it about tobacco that allows one group not to pay taxes and another group to pay?” she said. “It puts other retailers at a disadvantage.”
Chuck Gerken, manager of Native Tobacco 101, said the owners are working with a Native American company licensed to use the land and operate the tobacco business, but he declined to provide more detail.
Most of the tobacco he sells is made by Indians on Native American lands in the states of Washington and New York, he said.
A pack of Smoking Joes, for example, advertised at $2.75, “is $2.75 out the door,” he said, with no additional taxes.
“People are very happy,” Gerken said. “For those who elected to smoke or chew (tobacco) in today’s times, we make it affordable.”But his competitors are not pleased.
“We work hard and pay part of sales taxes they don’t have to. That’s not fair,” said Ravi Singh, owner of Quick Pick Liquors, on the other side of the freeway.
As his store, a pack of cigarettes goes for $3.95, plus 7.75 percent sales tax, bringing the total to $4.26.
A state tax official said tribes that sell cigarettes on Indian land to non-reservation members are required to collect a “use tax” equal to a sales tax.
But experts say the state can’t force tribes to collect it and the responsibility technically lies with the customer to pay the tax.
“It’s difficult to enforce because Indian reservations operate under different rules than other retailers,” said Anita Gore, a spokeswoman for the state Board of Equalization.
The rules differ from state to state, and the stakes can be high.
In New York, officials have pending lawsuits against tribes to force them to pay taxes the state says are lost to bootleg sales of cigarettes, tobacco bought on reservations or through the Internet. The lost revenue may have been as high as $576 million in 2004 alone, according to New York.
In Cloverdale, Native Tobacco 101 is on a frontage road next to Highway 101 at the south end of town. It sells mostly Native American cigarettes, not premium national brands.
The plain-looking building and its banner advertising “discounted cigarettes and tobacco products,” is clearly visible from Highway 101.
The business is on a remnant of the former Cloverdale Rancheria owned by the survivors of John Santana, a Pomo elder and postmaster who was allotted the land more than 40 years agoafter the rancheria was dissolved.
Some residents thought the tobacco store opening signaled the impending construction of a proposed Indian casino, but that is likely years away, assuming federal and state approvals are obtained.
The restored Cloverdale Rancheria Band of Pomo Indians, who are proposing the casino, have distanced themselves from the smoke shop. Tribal leaders said they have no connection with it and the tobacco business is not tied to the casino project planned on nearby property.
In a letter published in the Cloverdale Reveille newspaper, the tribal council said the smoke shop is not on land belonging to the tribe.
But the parcel is still held in federal trust as Indian land belonging to Santana’s heirs, which exempts it from local zoning regulations and clouds the issue of sales taxes collection.
Even though Native Tobacco 101 doesn’t offer major cigarette brands, it does have bulk and chew tobacco that other local stores sell, such as Copenhagen and Skoal.
A 1.2-ounce tin of Copenhagen, for example, sells for $3.75 — with no taxes — at Native Tobacco 101.
But at Quick Pick Liquors, it goes for $3.95, plus 7.75 percent tax, bringing the total to $4.26.
Holding up a small tin of Copenhagen, Singh said, “I used to sell a lot of these guys — 50 rolls a week. Now, not even 10.”
He said his sales have dropped off dramatically because he can’t compete with the Native American business.
Les Marston, a Ukiah attorney who litigated a pivotal U.S. Supreme Court case in the mid-1980s involving tobacco sales by a California tribe, said the court made it clear tribes have an obligation to collect and remit state tax on the sale of cigarettes to non-tribal members.
But he said when it comes to tribes around the country, federal law requires an examination of state law as to who has the obligation to pay the tax — the buyer or the seller.
“Every state is different,” he said.
Marston said he represents a half-dozen tribes in California that sell tobacco, typically as part of their casino operation.
“I do know all the tribes I represent are collecting and remitting state tax on cigarettes,” he said.
But if Indian tobacco shops don’t send in the tax, it’s not simple for the state to enforce collection.
Marston said the state can’t sue the tribe nor file a lien on real or personal property on the reservation, seize off-reservation bank accounts or come onto the reservation for judicial or administrative enforcement.
Basically, the responsibility in California falls on the consumer to pay the tax. It’s similar to making a purchase on the Internet, in which consumers are not charged sales tax but are supposed to remit the equivalent tax to the state.
But Cloverdale Mayor Russell, worries that when an Indian cigarette retailer doesn’t collect the tax, the health programs that rely on the revenue will suffer.
Other taxpayers will “eventually have to take care of people who are ill because they smoke cigarettes,” she said.