Tobacco.org

• Relabeling Roll-Your-Own Tobacco as Pipe Tobacco Costing Feds, States $1.3 Billion in Lost Revenues  

Tobacco manufacturers that re-label roll-your-own cigarette tobacco as pipe tobacco are cheating federal and state authorities out of an estimated $1.3 billion in lost state and federal tax revenues, according to a report released Wednesday by the Centers for Disease Control and Prevention.

Last month, the Government Accountability Office found that cases of roll-your-own tobacco were being sold in packages labeled as pipe tobacco. The federal excise tax on loose tobacco used for roll-your-own cigarettes is $22 per pound higher than the excise tax on pipe tobacco.

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New York lost $16.9 million from tobacco tax loophole 

New York lost an estimated $16.9 million in potential tobacco tax revenue during the first 28 months following a federal excise tax increase on cigarettes, small cigars and roll-your-own tobacco.

That's the finding of a new report released Wednesday by the Centers for Disease Control and Prevention, which said states collectively lost $374 million in tobacco revenue from April 2009 to August 2011 because of a market shift to lower-priced pipe tobacco to make roll-your-own cigarettes.

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$31 million in unintended consequences 

• Fiscal and Policy Implications of Selling Pipe Tobacco for Roll-Your-Own Cigarettes in the United States 

Conclusions

Marketing pipe tobacco as “dual purpose" and selling it for RYO use provides an opportunity to avoid paying higher cigarette prices. This blunts the public health impact excise tax increases would otherwise have on reducing tobacco use through higher prices. Selling pipe tobacco for RYO use decreases state and Federal revenue and also avoids regulations on flavored tobacco, banned descriptors, prohibitions on shipping, and reporting requirements.

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• Smokers dodge cigarette tax by switching to pipes, cigars  

Sales of pipe tobacco and large cigars, both taxed at a lower rate, have soared as smokers have adjusted their buying habits to the new price structure.

The shift cost the federal government $615 million to $1.1 billion in uncollected tax revenue from April 2009 to September 2011, the report said. It did not estimate how much individual states may have lost in uncollected taxes.

"That's real money and a tax avoidance scheme Congress ought to be interested in stopping," said Gregg Haifley, associate director of federal relations at the American Cancer Society's Cancer Action Network. "It's also counterproductive for the public health benefit of tobacco taxes."

Monthly sales of pipe tobacco increased from about 240,000 pounds in January 2009 to more than 3 million pounds in September 2011, the Government Accountability Office found. Monthly sales of large cigars more than doubled, from 411 million pounds to more than 1 billion pounds.

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Smokers adjust puffs as prices continue to change  

Tobacco tax: Florida missed $63 million in tobacco tax revenues  

Smokers Switch to Pipes, Cigars as Cigarette Alternatives 

• Cigarette taxes push smokers to roll their own 

Americans' smoking habits experienced "sizable market shifts" since federal tobacco taxes were increased in 2009, a new government report concludes.

Sales of pipe tobacco and large cigars, which are taxed at a lower rate, have skyrocketed as smokers have adjusted their buying habits to the new price structure.

Pipe tobacco is increasingly used to make relatively inexpensive cartons of roll-your-own cigarettes. The Fox Valley has several shops with roll-your-own machines available for customers.

Kim Schafer of Appleton Souvenir and Cigar Co. said she's noticed changing trends in tobacco use.

"Actually, a few more people are picking up pipe smoking," Schafer said.

Monthly sales of pipe tobacco increased twelve-fold

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• Report cites major shift in smoking habits since 2009 tax increase 

A new government report says Americans' smoking habits have displayed "sizable market shifts" since federal tobacco taxes were increased in 2009.

Sales of pipe tobacco and large cigars, which are taxed at a lower rate, have skyrocketed as smokers have adjusted their buying habits to the new price structure.

Monthly sales of pipe tobacco increased 12-fold, from about 240,000 pounds in January 2009 to over 3 million pounds in September 2011, the GAO found. And monthly sales of large cigars more than doubled, from 411 million pounds to more than 1 billion pounds over the same period.

Pipe tobacco is increasingly used to make relatively inexpensive cartons of roll-your-own cigarettes in machines installed in neighborhood smoke shops around the nation.

In New York, where state tobacco taxes are among the highest in the nation, the machines are in smoke shops in Depew and Lewiston in the Buffalo area; at several locations in Rochester; in New Rochelle, Nanuet and Newburgh in the Hudson Valley; in Brooklyn and Staten Island in New York City; and in Ithaca in the Southern Tier.

Congress increased taxes on both roll-your-own tobacco and packs of cigarettes in April 2009, making them equal. Lawmakers enacted a smaller tax increase for pipe tobacco, which has become a substitute for roll-your-own tobacco.

Likewise, Congress began taxing small cigars at the same rate as cigarettes. In response, manufacturers of small cigars fractionally increased the weight of many of their products so they would qualify as lower-taxed large cigars, even though they often are just slightly larger than cigarettes and often have filters. . . .

In a written response to the GAO report, Treasury officials noted that the numbers in the report "are not actual losses of revenues, but rather your estimates of the revenue increases if Congress were to change the law to eliminate the disparities."

And that's the GAO's recommendation: Congress should fix the disparities.

According to the GAO report, a woman representing one tobacco company said she knew of no difference between the roll-your-own tobacco her firm formerly produced and the pipe tobacco it switched to making -- other than the federal excise tax.

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Smokers able to dodge tax changes 

What's New in TOBACCO - Cover Story  

• Federal Tax Hike Drives Roll-Your-Own Smokers To Pipe Tobacco  

Memo to Congress: Yes, you can influence behavior with taxes, but not always the way you intended.

A more than 2,000% increase in the federal tax on roll-your-own tobacco and small cigars has led consumers to roll lower-taxed pipe tobacco and smoke lower-taxed big cigars instead, according to a report released today by Congress’ Government Accountability Office. Not surprisingly, that switch has been aided by manufacturers, who have repackaged and re-sized their products to minimize the tax bite. . . .

So how much has this tax-avoidance-by-substitution cost Uncle Sam? The GAO estimated that the shift to pipe tobacco and big cigars means the fed has realized somewhere between $615 million and $1.1 billion less in taxes than if the product mix hadn’t changed. The GAO didn’t directly address whether the substitution had undermined the attempt to prevent price sensitive teens from starting to smoke. But it seems likely to have had that effect; the sales of roll-your-own and pipe tobacco combined have increased since the passage of the tax hike, the GAO noted.

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• Public cigar, pipe smoking effort still alive  

The future is unclear for Washington's cigar smokers, after a proposal to allow them to smoke at some businesses became part of a tobacco-related measure Friday night.

The amendment to House Bill 2565 would allow cigar smoking at up to 100 cigar bars and 500 tobacco retailers in the state. That means bars and restaurants, as well as tobacco shops, could apply for an endorsement to allow cigar and pipe smoking at their establishments. Cigarette smoking would not be permitted.

The smoking areas would need to be separate, enclosed spaces with independent ventilation systems.

In 2005, Washington voters banned smoking in public places such as bars and restaurants. Joe Arundel, president of the Cigar Association of Washington, says that law hasn't left smokers with many options.

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Does This Sleek Aluminum Capsule Tobacco Pipe Make Smoking Look Cool? 

Smoking is awful—it stinks, it screws up your lungs and it litters the streets of any city. This tobacco pipe, Armilon Capsule, doesn't help with the first two issues but does solve the trash problem and plus, it looks freaking sweet.

The Armilon Capsule isn't your grandpa's tobacco pipe though. It looks more like a gigantic silver bullet (or pill capsule) that has hidden tricks than an ordinary tobacco pipe.

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