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CIGAR SMOKERS
ACTION ALERT
2009 SCHIP Bill
State
Children’s
Health
Insurance
Program
The 2009 legislation expanded the State Children’s
Health Insurance Program (SCHIP) was released by the
U.S. House of Representatives. The tax
increases on tobacco products have changed
as shown in the chart below. Several changes to the
tax increases include a $.40 cap per cigar and
the tobacco tax increasing from
$1.0969 per pound to $24.62 per pound! The 2009
version of the SCHIP bill had roll-your-own tobacco
being taxed at a new rate of $8.9286 per pound.
|
Product |
|
Cigarettes |
|
Cigars |
|
Pipe
Tobacco |
|
Chewing
Tobacco |
|
Snuff |
| |
*** |
|
** |
|
** |
|
** |
|
** |
|
|
Current
Tax |
|
$.39 pack |
|
$.05 per
Cigar |
|
$1.09 lb |
|
$.19 lb |
|
$.58 lb |
| |
|
|
|
|
|
|
|
|
|
|
|
NEW
SCHIP Tax |
|
$1.00 pack |
|
$.40 per Cigar |
|
$2.80 lb |
|
$.50 lb |
|
$1.50 lb |
The bill becomes effective
April 1, 2009
and assesses a floor stock tax on all
manufacturers, wholesalers and retailers for the
tobacco products in inventory on April 1, 2009.
The SCHIP tax
increase will result in large sales declines,
and employees being laid off Nationwide, up
to 117,000 American industry jobs will be lost.
Consequences For Customers/Retailers would be
significant
The bill expanded the State
Children’s Health Insurance Program (SCHIP) by
significantly increasing the federal cigarette and
tobacco taxes, the fallout from this expansion of
government subsidized health care will
include major cigarette and tobacco sales
reductions, employee layoffs and even store
closings.
The SCHIP program was a
TOP PRIORITY for DEMOCRATS
in CONGRESS
and will result in the
single largest tax increase on one industry’s
products in the history of the country.
President Obama made
campaign promises not to increase taxes on any one
who earns less than $250,000.
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