Tackling Tobacco: Fall 2016 Legislative & Regulatory Roundup
NATIONAL REPORT — Tobacco legislation and regulation is constantly under review at the local, state and federal levels. In this monthly roundup, Convenience Store News highlights the latest proposals and approved changes happening across the United States.
Sacramento — California voters approved Proposition 56, a ballot measure that raises the state's cigarette excise tax by $2 per pack. Known as California Healthcare, Research and Prevention Tobacco Tax Act of 2016, the proposition will also place an equivalent tax increase on other tobacco products and electronic cigarettes containing nicotine.
Tax revenues from the higher levy are expected to range between $1 billion–$1.4 billion annually by 2017-2018, with revenues decreasing slightly in subsequent years, according to an analysis conducted by the Legislative Analyst's Office and Department of Finance.
A similar tax increase was defeated in 2012.
Yolo County — The county Board of Supervisors approved a ban on the sale of flavored tobacco products in Yolo County. The 3-1 vote reportedly closes the loophole on Food and Drug Administration regulations that prohibit the sale of flavored cigarettes but not other tobacco products. The new ban will go into effect May 1, giving retailers 180 days to sell their remaining inventory.
The board also gave initial approval to a proposal that would allow persons age 18 to 21 to sell tobacco products again. The minimum age was increased after California hiked the minimum age to purchase tobacco products from 18 to 21 this summer.
Denver — Voters in Colorado went to the polls to reject Amendment 72, which would have increased the state's tobacco tax. If approved, the measure would have hiked the tax on cigarettes by $1.75 per pack for a total tax of $2.59 per pack.
Amendment 72 also proposed raising the levy on other tobacco products from 40 percent to 60 percent of the manufacturer's price.
Naperville — The Naperville Liquor Commission has voted to recommend the Naperville City Council increase the age to purchase, possess, sell or use tobacco products from 18 to 21 years old. The issue has been under discussion since July. If the council approves the move, offenders will pay a fine of $100 to $500 if convicted. The recommendation includes possession and usage of all tobacco products.
Highland Park — The Highland Park City Council voted in favor of an ordinance to increase the minimum age for the sale of tobacco products and e-cigarettes to consumers 21 and older. The new regulation does not restrict the possession of these products to anyone between 18 and 21. The ordnance goes into effect Jan. 1.
Hamilton — A measure to prohibit the sale of tobacco products to consumers under 21 years old went into effect Oct. 1. The Hamilton Board of Health voted to increase the minimum age to buy cigarettes and other tobacco products in June.
The new regulations also prohibit the sale of "blunt wraps," which it defines as "any tobacco product manufactured or packaged as a wrap or as a hollow tube made wholly or in part from tobacco that is designed or intended to be filled by the consumer with loose tobacco or other fillers," and flavored tobacco products except in smoking bars and adult-only tobacco stores.
Rockport — The municipality officially joined the Tobacco 21 movement when the prohibition on the sale of tobacco and nicotine delivery products to consumers under 21 went into effect on Nov. 1. Businesses violating the regulations will be fined from $100 for a first violation up to $300, and could see their permits suspended for up to 30 days.
Southwick — The town became the latest in Massachusetts to set the minimum age to buy tobacco products at 21 years old. The new law went into effect Oct. 1. The change was approved by the Southwick Board of Health on Aug. 4. Retailers who violate will face a first offense fine of $100. A second violation within 36 months will result in a $200 fine and a suspension of the tobacco retailer permit for seven days.
A third violation within 36 months carries a $300 fine and 30 day suspension of the permit.
Jefferson City — An amendment to raise the state's cigarette tax survived the Missouri Supreme Court but it did not survive the general election. Voters rejected Amendment 3, which would have increased the cigarette tax by 60 cents per pack. It would have been phased in through 2020, and created a 67-cent-per-pack "equity" fee increasing annually for inflation on certain off-brand cigarettes.
Voters also turned down Proposition A, which would have gradually hiked the tax to additional 23 cents per pack by 2021. It also would have taxed non-cigarette tobacco products 5 percent of the manufacturer's invoice price, paid by the seller.
If both measures had passed, the one receiving the most votes would have been implemented.
Haledon — The Haledon Board of Health passed an ordinance prohibiting the sale of tobacco and nicotine products in the borough to anyone under 21 years old. New Jersey sets the minimum legal buying age at 19 years old.
Under the new rules, self-service displays or devices are prohibited, and tobacco retailers must post and maintain signs at all checkout counters notifying customers that proof of age is required to purchase. The signs must be a minimum of six by eight inches. Violations will result in a civil penalty of at least $250 for the first violation, at least $500 for a second violation and at least $1,000 for the third and subsequent violation.
Bismarck — The state's excise tax on tobacco products will remain the same after voters defeated Initiated Statutory Measure 4, The North Dakota Tobacco Tax Increase Initiative during the general election on Nov. 8. The measure would have increased the tax on cigarettes from 44 cents per pack to $2.20 per pack. The tax on other tobacco products, including liquid nicotine, would have gone from 28 percent to 56 percent of the wholesale purchase price.
The tax will remain at 44 cents for a pack of cigarettes and 28 percent on the wholesale purchase price of other products.
Cedar City — The Cedar City Council approved additional regulations on businesses selling tobacco and vape products. According to the new ordinance, any business with the words "tobacco" or "vapor" in the business name or any advertisements would automatically be classified as a retail tobacco specialty store. Any store dedicating 40 percent or more of the total floor and shelf space would also receive the designation according to the ordinance.
Other changes include stricter checks to ensure that any store carrying tobacco and vape products is not exceeding the state limits that require them to be classified as a retail tobacco specialty store. Business owners will now submit two quarterly gross receipts for at least two consecutive calendar quarters in order to prove that the sale of any tobacco products, including e-cigarettes or any items used for vaping, account for less than 35 percent of the total sales. Business that do not meet the requirements under the new ordinance will be denied a business license.
In addition, new stores moving into the area will also face additional limitations on potential locations to open their business. Any specialty shop would be required to be more than 1,000 feet away from any schools, daycare facilities, trade schools, churches, public libraries, playgrounds, parks, youth center, arcades, recreational facilities or "any other spaces primarily for youth oriented activities" in addition to 600 feet away from any residential areas.
Clallam County — The Clallam County Board of Health approved a resolution to ask the state Legislature to raise the legal age for tobacco and nicotine vapor product sales from 18 to 21. State Attorney General Bob Ferguson has led the statewide efforts to hike the age in a bid to reduce teen smoking, reduce the health care costs of smoking and save lives. Companion bills that would have raised the legal age to 21 stalled in state House and Senate committees during the last legislative session earlier this year.