NECSEMA Speaks Out on Massachusetts' 'Increasingly Absurd' Flavored Tobacco Ban
STOUGHTON, Mass. — Massachusetts is losing millions of dollars in excise tax revenue six months after the state implemented a ban on the sale of flavored tobacco products, according to a retail association.
Excise tax losses from menthol cigarettes continued to mount at a rate of more than $10 million per month since the legislation went into effect in June. The state's loss is neighboring New Hampshire's and Rhode Island's gain, added the New England Convenience Store & Energy Marketers Association (NECSEMA).
"With every month that passes, the state's ban on flavored tobacco becomes increasingly absurd," said Jonathan Shaer, executive director of NECSEMA. "All anyone needs to do is look at the excise tax stamp numbers from June through November to understand how ineffective and ridiculous this ban is. Rhode Island and New Hampshire have combined to sell 18.9 million more stamps than they did over the same period in 2019 while Massachusetts has sold 17.7 million fewer.
"Indisputably, menthol cigarettes are purchased in neighboring states and then brought back into Massachusetts for personal consumption or illicit market sales," he added.
According to updated cigarette numbers from June through November 2020 vs. the same period in 2019:
Massachusetts cigarette excise tax stamp sales were down 17,656,000 or 23.9 percent; cigarette excise tax loss equaled $61,972,560; and the estimated loss including sales tax equaled $73,008,000.
Rhode Island cigarette excise tax stamp sales were up 2,847,000 or 18.2 percent; cigarette excise tax gain equaled $12,100,000; and the estimated gain including sales tax equaled $14,066,740.
New Hampshire cigarette excise tax stamp sales were up 16,053,000 or 29.7 percent; and cigarette excise tax gain equaled $28,574,340.
According to actual retail sales information from NECSEMA members during the last six months:
Non-flavored cigarette sales in Massachusetts have increased 15 percent, and non-flavored smokeless sales have increased 350 percent vs. the same period in 2019;
Total cigarette sales in New Hampshire have increased 46 percent, menthol cigarette sales are up 90 percent, and mint/wintergreen smokeless sales are up 105 percent vs. the same period in 2019;
Total cigarette sales in Rhode Island have increased 20 percent, menthol cigarette sales are up 29 percent, and mint/wintergreen smokeless sales are up 59 percent vs. the same period in 2019; and
Total in-store sales in Massachusetts are down 10 percent while they are up 93 percent in New Hampshire and 15 percent in Rhode Island.
"I challenge anyone to demonstrate how this ban has been effective," Shaer said. "New Hampshire and Rhode Island imports have replaced sales once made in Massachusetts by licensed retailers. In fact, the latest data shows an uptick in cigarette sales when you combine the increases for non-flavored cigarettes in Massachusetts with total cigarette sales gains in New Hampshire and Rhode Island.
"Massachusetts small businesses have lost, the Massachusetts budget has lost, public health has lost, and youth who this law was allegedly intended to protect have lost since prevention revenue has greatly diminished," he added.