Pennsylvania remains the only state in the nation that doesn’t tax smokeless tobacco and one of only two that doesn’t tax cigars.

Two Democratic lawmakers think it’s time for the state to surrender its membership in that exclusive club.

Rep. Eugene DePasquale, D-York, has introduced House Bill 2405 to impose a tax on tobacco products not subject to the state’s tax on cigarettes and cigarillos.

His bill would direct about half of the estimated $80 million in projected yearly revenue to restore funding cuts made last year to breast and cervical cancer screenings and smoking-cessation programs.

He proposed a tax rate that would be equivalent to one levied on cigarettes. He said it amounts to about 60 percent of the price of cigars, chewing tobacco and other tobacco products, such as the powdered tobacco capsules that look like Tic Tacs and melt in your mouth.

DePasquale said not taxing these smokeless, spitless tobacco products makes them more popular with young people because they are cheaper than cigarettes.

“I believe it is something from a health standpoint. … We should not be encouraging smokeless tobacco,” DePasquale said.

The tax on these same tobacco products was included in a House-passed version of last year’s state budget backed by the Democratic majority. But the tax was removed by Senate Republicans in the final budget negotiations. The Republicans said that tax-free cigars helped Pennsylvania build a niche in the cigar-distribution business, with four of the eight leading cigar retailers based in the state.

Keith Meier, president of the largest of those retailers, Bethlehem-based Cigars International, told a Senate committee last year that if a tax on cigars were imposed, his company would be forced to consider suspending construction of a new headquarters and warehouse in Bethlehem and moving to Florida, the only other state that does not tax cigars.

Along with the concern about chasing away cigar retailers at a time when the state wrestles with a 9 percent jobless rate, Senate Majority Leader Dominic Pileggi, R-Delaware County, said the revenue gained wouldn’t put a dent in the $800 million to $1 billion revenue shortfall that the state expects to face.

“Given the enormity of the revenue shortfall, it’s not a solution to the budget deficit,” Pileggi said. Still, he said his caucus would consider the idea.

Rep. Dan Frankel, D-Allegheny County, a longtime supporter of taxing these tobacco products, said it makes no sense for there to be any debate about the revenue source.

“It is absolutely inexplicable to me that in an era where we are fighting for every possible dollar to restore funding to things that are important to this commonwealth, like breast and cervical cancer screenings … that we don’t take the opportunity to tax something that everybody else taxes,” Frankel said.

Samuel Monismith, a board member of Pennsylvania Division of the American Cancer Society, endorsed DePasquale’s proposal as a way to help reverse the rising number of young people buying these tobacco products. A 2009-10 state Department of Health survey showed 6 percent of middle-school boys and about 14 percent of high school boys use smokeless tobacco.

“Taxing tobacco products has been shown to reduce consumption, especially among youth,” Monismith said.

source: pennlive.com

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