Senators Respond to New Data on Tobacco Tax Loophole

[WASHINGTON, D.C.] - Senators Dick Durbin (D-IL), Tom Harkin (D-IA), Frank Lautenberg (D-NJ) and Richard Blumenthal (D-CT) expressed concern about the findings of a study released today by the Centers for Disease Control and Prevention (CDC) revealing more than $1.3 billion in lost state and federal revenue by tobacco manufacturers relabeling roll-your-own tobacco as pipe tobacco.  The lower tax rate for pipe tobacco encourages its use as a source of cheap cigarettes and diminishes the impact federal taxes on cigarettes and roll-your-own tobacco would otherwise have on reducing tobacco use.  Last month, a Government Accountability Office report found that cases of roll-your-own tobacco are being sold in packages labeled as pipe tobacco, with no change to the product.

 

The Senators released the following statement:

 

“Tobacco manufacturers have once again found a way to skirt the law in order to continue peddling their dangerous product.  Congress instituted tax increases and established tobacco cessation programs to help encourage Americans to quit this harmful habit, and these efforts have proven effective. However, due to this tax loophole, tobacco companies are still able to make cheap tobacco products available, which may discourage some smokers from quitting.  We commend the CDC and the GAO for their attention to this issue, remain committed to closing this loophole and will continue our efforts to help Americans quit tobacco.”