Fiscal & policy implications of selling roll-your-own tobacco as pipe tobacco

Audience:

Staff from state and local tobacco control programs and non-government organizations.  Individuals with an interest in understanding the impact of illicit trade strategies. 

Key Points:

When the Federal excise tax for tobacco products was increased in 2009, the tax on Roll-your-own (RYO) tobacco became $21.95 per pound more than the tax on pipe tobacco. Subsequently, tobacco manufacturers relabeled RYO as pipe tobacco to offer products at a lower price and retailers began to offer commercial cigarette rolling machines.

The first presentation will discuss the revenue implications of the tax disparity and show how millions of pounds of RYO tobacco was sold as pipe tobacco since the tax change. This lowered state and Federal revenue by over $1.3 billion between April 2009 and August 2011. The second presentation will discuss policy implications, including how Federal and state governments have attempted to prevent tax avoidance and the implications on other tobacco policies. The third presentation will discuss actions Wisconsin took to prevent retailers from selling RYO as pipe tobacco, and the subsequent legal challenges. 

Educational Experience:

Panel members will each deliver a brief presentation and answer questions from participants. 

Benefits:

Participants will understand how tax disparities between different types of tobacco products can undermine public health efforts to reduce tobacco use through higher prices.  Specifically, participants will be able to describe how manufactures and retailers were able to capitalize on the disparity in the tax between RYO and pipe tobacco. Participants will also learn about opportunities for policy interventions at the state and federal level.