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Developments in Federal Tobacco Tax Legislation - 2005

Developments in Federal Tobacco Tax Legislation - 2005. Celeste Drake Office of U.S. Rep. Lloyd Doggett. Coble Amendment SToP Act (H.R. 1377) Non-Mailable Tobacco Act (H.R. 1328) Non-Reintroduced Bills Other Congressional Priorities. Coble Amendment.

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Developments in Federal Tobacco Tax Legislation - 2005

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  1. Developments in Federal Tobacco Tax Legislation - 2005 Celeste Drake Office of U.S. Rep. Lloyd Doggett

  2. Coble Amendment • SToP Act (H.R. 1377) • Non-Mailable Tobacco Act (H.R. 1328) • Non-Reintroduced Bills • Other Congressional Priorities

  3. Coble Amendment • Attached to the Patriot Act Reauthorization (H.R. 3199) during the House floor debate • Nearly identical to Section 4 of the PACT Act, which has not been reintroduced for the 109th Congress • Supported by the tobacco industry (Philip Morris)

  4. Coble Amendment • Amends the CCTA by: • lowering threshold to 10,000 from 60,000 cigarettes • covering smokeless tobacco in excess of 500 single-unit cans or packages

  5. Coble Amendment • Amends the CCTA by: • Requiring sellers, shippers, and distributors who reach the 10K threshold in a single month to submit detailed reports to the US AG, Treasury Secretary, and state and tribal AGs and tax administrators

  6. Coble Amendment • Defines a “delivery sale” as a sale in interstate commerce if consumer is not in the same physical location as seller when the order is placed (e.g., phone or internet order); and not in the same place as the seller when delivery is made (e.g., delivery through mail or common carrier).

  7. Coble Amendment • Directs that seized products be destroyed or used for undercover operations • Authorizes state AGs and local governments to bring actions in federal court to prevent and restrain violations of the CCTA and obtain other appropriate relief • Exempts tribal entities from legal action

  8. Coble Amendment • Contains a non-preemption provision that makes clear that the law is not intended to modify or restrict the right of state or local governments to pursue other remedies • Floor Statement was a good sign • Amdmt removed from Senate version • Fate unclear

  9. Smuggled Tobacco Prevention Act (H.R. 1377 - Doggett) • Basic purpose is to change labeling and reporting requirements to make smuggled cigarettes easier to identify • Amends: • The Internal Revenue Code • The Jenkins Act • Contraband Cigarette Trafficking Act • Whistleblower provisions of Labor Code

  10. Smuggled Tobacco Prevention Act (Labeling Requirements) • All tobacco product packages must have a unique serial number • Products manufactured for export must state nation of final destination • Products to be sold on Indian Reservations must so state

  11. Smuggled Tobacco Prevention Act (CCTA Amendments) • Applies to quantities in excess of 2,000 cigarettes (Compare: 10,000 in Coble Amendment) • Makes it unlawful to alter markings, interfere with inspections, transport under false or no bill of lading, or to fail to maintain reports

  12. H.R. 2813, to make tobacco products non-mailable (Rep. McHugh) • Introduced in June w/3 cosponsors • Makes it unlawful to mail cigarettes, smokeless, pipe, and roll-your-own tobacco • Allows USPS discretion regarding how to dispose of prohibited products • Violations are civil, not criminal

  13. Bills Not Yet Reintroduced • PACT Act (Senators Kohl and Hatch) • Internet Tobacco Sales Enforcement Act (Green and Meehan)

  14. PACT Act • Stalled because of common carrier (e.g., UPS and FedEx) opposition to the requirement that they use compliant and non-compliant seller lists • But these provisions form the heart of the legislation; without the lists, impact of bill would be mild to moderate, at best

  15. PACT Act • Tobacco health groups are working with Kohl and Hatch offices and other interested parties to reach a compromise • If you are interested in seeing the PACT Act progress, please contact Senators Kohl, Hatch, or other members of the Senate Judiciary Committee to express your interest

  16. Green-Meehan Act • Green was leading force behind this bill, but may have lost interest due to difficulty of negotiating the “tribal sovereignty maze” • Convenience stores, leading supporters of this bill, want to eliminate competition from tribal sales, but any changes that affect tribal sovereignty add opposition • PACT, SToP Acts leave tribal sovereignty as is

  17. Green-Meehan Act • Meehan and Platts, Chairs of the House Task Force on Tobacco and Health, have new tobacco staffers since my last presentation; this seems to have affected the activity of the Task Force

  18. What is Congress working on if not tobacco taxation issues?

  19. Hurricane Katrina

  20. Appropriations & Budget Reconciliation

  21. Social Security Privatization

  22. Energy Prices and Oil Drilling

  23. Estate Tax Repeal and Other Tax Cuts

  24. Outlook • Coble Amendment has best chance of becoming law, and would provide an opening for the PACT Act if the parties can reach an agreement • Without the support of more committee chairpersons, the Doggett and McHugh bills have smaller chance of success this Congress

  25. Questions? • Call 202-225-4865 or e-mail celeste.drake@mail.house.gov

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