Tobacco Taxes Louisiana's excise tax per pack of cigarettes: $0.360 Louisiana's excise tax collection for the fiscal year ending June 2002: $103,986,000 Sales tax on tobacco products: 4.00% Federal excise tax per pack of cigarettes: $0.39 Total federal excise tax collections in fiscal year 2002: $7,512,700,000

Who Profits from Cigarette Sales?

click for larger view

Number of six-packs of beer that must be sold in Louisiana to produce the same state excise tax revenue generated by one carton of cigarettes: 13.3

click for larger view

Number of bottles of wine that must be sold in Louisiana to produce the same state excise tax revenue generated by one carton of cigarettes: 110.1

 

LA 2005

In 2004, the 23.5% of adults who comprise Louisiana’s smoker population paid more than their fair share in taxes and tobacco settlement payments because they chose to buy a legal product:

Excise Taxes	Sales Taxes	Tobacco Settlement Payments	Total Smoker Payments
$147,663,000	$57,425,000	$142,200,000	$347,288,000

Louisiana Smokers’ Economic/Tax Profile 2004:

Ø       Louisiana smokers’ median household income  $28,799

Ø       Louisiana nonsmokers’ median household income  $35,274

Ø       44.3% of Louisiana smokers had household incomes LESS THAN $25,000

Ø       Only 12.2% of Louisiana smokers had household incomes EQUAL TO or GREATER THAN $75,000

The impact of smoker payments on the incomes of working families was disproportionately greater – more than THREE TIMES higher – than the impact on the minority of smokers who have higher incomes. 

Tax and settlement payment liability paid only by smokers in FY2005:

Ø       Total average paid per Louisiana smoker in excise and sales taxes   $269

Ø       Cost per Louisiana smoker for settlement payments to Louisiana $186

Total annual payments to Louisiana per smoker   $455

Payments by Louisiana smokers in FY2005 were:

Ø       More than six times as large as forecasted state excise taxes on alcoholic beverages and beer ($53.1 million).

Ø       Larger than forecasted corporate income taxes ($278 million).

Ø       Larger than forecasted state corporate franchise taxes ($185.0 million).

Ø       Larger than forecasted riverboat gaming revenues  ($340 million).

Ø       Larger than forecasted video poker revenues ($179.8 million).

Louisiana smoker payments of OVER $347 MILLION were large enough to support FY2005 funding for:

Ø       The Dept. of Economic Development ($96.2 million)  AND  the Dept. of Culture, Tourism, and Recreation ($72.8 million)  AND  Youth Services ($133.6 million)

OR

Ø       Agriculture and Forestry ($108.8 million)  AND  the Dept. of Natural Resources ($156.4 million)  AND  the LSU Health Care Services Division ($27.8 million)

OR

Ø       Special Schools and Commissions ($265.6 million).

Louisiana Smokers' Contributions
to the State Economy - FY2004

In 2003, Louisiana smokers comprised only 26.5% of the adult population in the state.  Here is what they already pay because they choose to buy a legal product:
 Smokers Pay Excise Taxes $138,380,000
 Smokers Pay Sales Taxes $  51,273,000
 Smokers Pay Tobacco Settlement Payments $140,000,000
 $329,653,000

Smokers' Economic/Tax Profile 2003
 Income
 Louisiana smokers' median household income $28,152
 Louisiana nonsmokers' median household income $35,833
 Working families pay more
 44% of Louisiana smokers had household incomes LESS THAN $25,000
 10% of Louisiana smokers had household incomes EQUAL TO or GREATER THAN $75,000
The impact of smoker payments on the incomes of working families was more than THREE TIMES the impact on higher income smokers.  Those who can afford it least pay a disproportionate percentage of their hard-earned income in smoker payments. 
 Smoker excise tax/sales tax/tobacco settlement payments liability in FY2004
 Total average paid per Louisiana smoker in excise and sales taxes $220
 Cost per Louisiana smoker for settlement payments to Louisiana $163

Total annual payments to Louisiana per smoker $383
 Total annual payments to Louisiana per nonsmoker $0

Louisiana Smoker Facts
 Total smokers' payments in Louisiana in FY2004 were:
 More than six times as large as excise taxes on alcoholic beverages and beer in FY2004 ($55.3 million)
 More than 2 times as large as FY2004 lottery proceeds ($116.9 million)
 Larger than FY2004 corporation income taxes ($198 million).
 Louisiana FY2004 smoker payments would cover the FY2004 existing budget amounts for:
 Office of Public Health ($296.8 million)
 Office of Coastal Restoration and Management ($118.6 million)  AND  Southern University System ($127 million)
 Dept. of Environmental Quality ($138.8 million)  AND  Office for Citizens with Developmental Disabilities ($36.2 million)
 LSU Health Science Center - New Orleans ($193 million)  AND  University of New Orleans ($119.2 million)
 Enough to cover the costs of LSU - Baton Rouge ($329.5 million).

CIGARETTES DON'T PAY TAXES - LOUISIANA SMOKERS DO!!

Louisiana Smokers' Contributions
to the State Economy - FY2002

Smokers Pay Excise Taxes2	$	103,986,444
Smokers Pay Sales Taxes2	$	56,324,821
Smokers Pay Tobacco Settlement Payments3	$	161,212,148
	$	321,523,413

• Income1

Louisiana smokers' median household income	$	29,092
Louisiana nonsmokers' median household income	$	36,096

• Working Families Pay More1

44.1% of Louisiana smokers had household income LESS THAN $25,000




8.5% of Louisiana smokers had household income EQUAL TO or GREATER THAN $75,000




The impact of smoker payments on the incomes of working families was more than THREE TIMES the impact on higher income smokers. Those who can afford it least pay a disproportionate percentage of their hard-earned income in smoker payments.

• Smoker excise tax/sales tax/tobacco settlement payments liability in 20024

Total average paid per Louisiana smoker in excise and sales taxes	$	201
Cost per Louisiana smoker for settlement payments to Louisiana	$	202
Total annual payments to Louisiana per smoker	$	403
Total annual payments to Louisiana per nonsmoker	$	0

TOTAL SMOKER CIGARETTE PAYMENTS TO LOUISIANA FY2002 Per year: $ 321,523,413 Per day: $ 880,283 Per hour: $ 36,678 Per minute: $ 611 Per second: $ 10

1 Centers for Disease Control's Behavioral Risk Factor Surveillance System, 2001
2 Orzechowski & Walker, Arlington, Virginia; from state revenue department.
3 PriceWaterhouseCooper
4 U.S. Census Bureau, 2000 state population and Centers for Disease Control's Behavioral Risk Surveillance System, 2001
5 Tax Comparisons are from U.S. Census Bureau. Expenditure data for FY2002 comes from the Louisiana State Senate Fiscal Staff, House Fiscal Division, Legislative Fiscal Office, and Governor's Office of Planning and Budget, Louisiana Ten-Year Expenditure History FY1992-FY2002, 19 March 2003. Online at http://www.rjrt.com/common/pages/LeavingRJRT.asp?URL=http://senate.legis.state.la.us/FiscalServices/Publications/tenyearhistory.pdf.
6 American Economics Group, Inc., The U.S. Tobacco Industry in 1997: Its Economic Impact in the States.

A summary of Louisiana state law is provided below
(for specific questions regarding state law, contact your legal advisor.)

Minimum Age	Customers must be 18 years or older to purchase tobacco products.
Restricted Products	All tobacco products.
Acceptable Forms of Identification	Driver’s license; selective service card; other lawful identification which on its face establishes the age of the person as eighteen years or older and there is no reason to doubt the authenticity or correctness of the identification.
Fine/Penalty Schedule for Selling to Minors	It is unlawful to knowingly sell or distribute tobacco products including cigars, cigarettes, smokeless tobacco, or smoking tobacco to persons under age 18. Retailers found in violation will be fined $50 for the first offense, $100 for the second offense, $250 for the third offense and up to $400 for subsequent offenses. The sale of tobacco products to a minor by an employee shall be considered an act of the retail dealer for purposes of suspension, revocation, or assessment of civil penalties unless: the employer requires employees to attend a commission-approved seller training program; the employee actually attends the program; the employer does not directly or indirectly encourage the employee to violate the prohibited sales provisions. The retail dealer will also not be liable if it is within the first 180 days of employment and an application has been made for the employee to attend a training program. The Louisiana Responsible Vendor Program is designed to educate vendors and their employees and customers about selling, serving, and consuming alcoholic beverages in a responsible manner and selling and serving tobacco products. The training courses shall include but not be limited to state and federal laws and regulations related to the lawful age to purchase tobacco products and age verification procedures and requirements and the health risks and consequences associated with the consumption of tobacco products, including but not limited to their addictive nature. To qualify for, and maintain certification under the Responsible Vendor Program, the retailer shall: (i) enroll in the program and verify to the Commissioner that the retailer has read and understands the responsible vendor handbook; (ii) require that each employee selling tobacco successfully complete a server training course offered by an approved training provider within 45 days of being hired; (iii) require each employee selling tobacco to take a refresher course at least once every two years; (iv) maintain training verification records for each employee; and (v) post signs on the retailers premises informing customers of the retailer’s policy against selling tobacco products to underage persons. The commissioner may suspend or revoke a permit or impose a fine for any violation of tobacco product laws, rules, and regulations. The tobacco products permit of a vendor certified as a responsible vendor in accordance with the provisions of this Chapter shall not be suspended or revoked for the first illegal sale of a tobacco product to an underage person in any twelve-month period. No vendor may use as a defense to suspension or revocation the fact that he was absent from the licensed premises at the time a violation occurred if the violations are flagrant, persistent, repeated, or recurring. Certification as a responsible vendor shall be considered in mitigation of a vendor's administrative penalties or fines for a server's illegal sale of a tobacco product to an underage person. Effective January 1, 2000, all vendors shall participate in the program.
Affirmative Defense	None.
Minor Possession	It is unlawful for any person under age 18 to buy any tobacco product. Violation is punishable by a fine of up to $50 for the first offense, up to $100 for the second offense, up to $250 for the third offense, and up to $400 for any subsequent offense. It is unlawful for any person under age 18 to possess any tobacco product unless the minor is accompanied by a parent, spouse, or legal guardian 21 years of age or older, or the minor is in a private residence, or the tobacco product is handled during the course and scope of employment. Violation is punishable by a fine of up to $50 for each offense.
Sign Requirement	Retailers are required by law to post signs at each point of purchase in not less than 30-point type that state: LAW PROHIBITS THE SALE OF TOBACCO TO PERSONS UNDER AGE 18. Violators of the signage requirements will be fined up to $50 for the first offense, up to $100 for the second offense, up to $250 for the third offense, and up to $500 for subsequent offenses.
Compliance Checks	As a condition of receiving federal substance abuse block grant funds, federal law requires the State of Louisiana to conduct random, unannounced inspections of tobacco outlets to determine compliance rates. Persons under the age of 18 may be enlisted to test compliance, provided parental consent has been given and minors are under the direct supervision of law enforcement officers. The Commissioner of Alcoholic Beverage Control, acting through local law enforcement officials, coordinates the inspections.
Visual Characteristics of a State-Issued License	A red "M" appears in the minor box of a license holder under the age of 17.
DISCLAIMER: This information summary is provided as a service of the Coalition, but is not intended to provide legal advice or analysis. These summaries are not intended to be complete representations of state law, which may contain additional rules and restrictions relating to tobacco products not mentioned in this summary, as well as retailing prohibitions related to matters including, but not limited to, state required training, minimum pack size, the sale of loose cigarettes and other restrictions. Retailers should not rely on these summaries as complete or accurate descriptions of applicable federal, state or local law. Users with questions about the law should seek the advice of counsel. Each state law is unique and possibly represents multiple legislative or regulatory acts. Local laws may differ. Check with local authorities for variations from state law. These summaries are not intended to be complete representations of state law.

The reprinting of this information from the Coalition, does not constitute a representation or admission by RJRT that such information is accurate, complete, or a proper characterization of the laws concerned. The Coalition for Responsible Tobacco Retailing is a cooperative effort among retailers, wholesalers and manufacturers who share a common goal: to do all they can to prevent tobacco sales to minors.

Information

Copyright © by The Smokers Club, Inc. - (2892 reads)