WASHINGTON – Yesterday, members of the Coalition to Stop Contraband Tobacco were joined by members of Congress on Capitol Hill to urge the Senate (PDF) to pass its version of the Prevent All Cigarette Trafficking Act of 2009 (PACT Act).
This legislation, S. 1147, will help combat online cigarette sales that have robbed states of hundreds of millions of dollars in tax revenues and that undermine state laws that prevent youth access to tobacco products. The PACT Act closes gaps in current federal laws regulating “remote” or “delivery” sales of cigarettes and smokeless tobacco products.
The Senate Judiciary Committee is planning to markup the bill on Thursday. The House passed its version of the bill in May.
Sen. Herb Kohl (D-WI) and Rep. Anthony Weiner (D-NY), advocates of combating illegal cigarette sales, joined the organizations at the press conference.
“The PACT Act will strengthen our tobacco laws to ensure that law enforcement has the tools they need to investigate and prosecute cigarette traffickers,” said Kohl. “Each day we delay its passage, terrorists and criminals raise more money, states lose significant amounts of tax revenue, and kids have easy access to tobacco products sold over the Internet.”
“We must crack down on the illegal sale of tobacco, which gives terrorists and criminals the ability to raise more money,” said Weiner. “Every day we delay is another day that states lose significant amounts of tax revenue and kids have easy access to tobacco products sold over the Internet. I urge my colleagues in the Senate to pass the bipartisan PACT Act.”
Organizations represented at the press conference included NACS, New York Association of Convenience Stores (NYACS), American Wholesale Marketers Association (AWMA), National Black Police Association, American Legislative Exchange Council and Campaign for Tobacco-Free Kids.
“At the very time when states have undertaken extraordinary efforts to restrict minors’ access to cigarettes and continue to increase cigarette excise taxes, the Internet still offers minors a virtually risk-free and attractively priced means to easily obtain them,” said Hank Armour, NACS president and CEO. “The PACT Act addresses long-standing concerns that law-abiding neighborhood convenience stores have with respect to tax evasion and underage sales.”
“So pervasive is this tax evasion epidemic that today, more than half the cigarettes consumed by New Yorkers are purchased without payment of any state or local tax whatsoever,” added NYACS President Jim Calvin.
“For many smokers, tax avoidance has become a way of life. But it takes an enormous toll on the rest of us. It cripples tax-collecting stores by depriving us of legitimate retail trade. It thwarts public health initiatives by removing the financial incentive to quit smoking. And it squanders desperately needed tax revenue — $1.7 billion a year. That’s $4.6 million a day,” added Calvin.
AWMA also released its latest findings from a study (PDF) that examines the prevalence of illegal Internet cigarette sales and the cost to the country. The study, a follow up to a 2005 study, found that the cost to states in illegal cigarette sales could be upwards of $5 billion per year, and that with online sales there is almost no age verification at the time of purchase.
“The results of this updated study stunned us and the problem of illegal sales of cigarettes has gotten worse,” said Scott Ramminger, AWMA president and CEO. “This study is a clear indication that the PACT Act must be passed immediately so we can effectively combat illegal Internet sales of cigarettes and other tobacco products.”
For more information on the PACT Act, view the Remote Sales of Tobacco issue page in the Government Relations section.