New Bill Introduced to Close 'Little Cigars' Loophole

ST. PAUL, Minn., Feb. 28, 2011 /PRNewswire/ -- Today Senator Julie Rosen (R – Fairmont) and Representative Jenifer Loon (R – Eden Prairie) introduced the Cigarette Uniformity Act to address a problematic loophole that allows "little cigars" to skirt the same regulations placed on cigarettes. Already gaining bipartisan support at the Minnesota Legislature, this bill will help keep cheap and candy-flavored tobacco products out of the hands of kids and ensure proper compliance with state law.

"These little cigar products look, smoke and are marketed like cigarettes, but they aren't regulated like cigarettes because of a technicality in state law," said Representative Loon. "This bill closes the loophole that has allowed these tobacco products to be miscategorized – undermining the integrity of our tax code and putting our kids at risk."

Little cigars are filtered and usually come in packs of 20. However, because they are wrapped in brown paper, they have been incorrectly classified as an "other tobacco product" in law. This loophole unfairly gives favorable tax and regulatory treatment to little cigars. The Cigarette Uniformity Act broadens the statutory definition of cigarettes to include little cigars that have cellulose acetate or other cigarette-like filters and are of a similar size and weight as cigarettes. This change means little cigars:

• will be subject to the same taxes and fees as cigarettes,
• will be required to have Department of Revenue tax stamps to ensure tax compliance and reduce tax evasion, and
• will be subject to the state's minimum price law.

"Little cigars that come in peach, grape, strawberry and chocolate flavors and can be purchased for less than $2 are attractive to youth and that greatly concerns me," said Senator Rosen. "Makers of little cigars can no longer have it both ways. If they want to compete directly with cigarettes then they should have to play by the same rules. This is a common sense step to address a problem that should have been fixed decades ago."

The bill also directs the Minnesota Department of Revenue to study how to extend tax stamps to all tobacco products sold in Minnesota.

"We applaud Representative Loon and Senator Rosen for their leadership on this issue," said David Willoughby, Chief Executive Officer of ClearWay Minnesota(SM). "This is smart legislation that benefits Minnesotans by reducing access to cheap, kid-friendly flavored tobacco, while also ensuring proper regulation and taxation of a product that is highly addictive and deadly."

The Cigarette Uniformity Act is supported by a coalition of health organizations, including AARP Minnesota, Allina Hospitals & Clinics, the American Cancer Society, the American Heart Association, the American Lung Association, Association for Nonsmokers – Minnesota, Blue Cross and Blue Shield of Minnesota, Catalyst, Children's Hospitals and Clinics of Minnesota, ClearWay Minnesota, Courage Center, HealthPartners, the LAAMPP Institute, the Local Public Health Association, MAATEN, Medica, the Minnesota Academy of Family Physicians, Minnesota Cancer Alliance, the Minnesota Chapter of the American Academy of Pediatrics, the Minnesota Council of Health Plans, the Minnesota Medical Association, the Minnesota Public Health Association, Park Nicollet, the School Nurse Organization of Minnesota and the Twin Cities Medical Society.

ClearWay Minnesota(SM) is an independent, non-profit organization that improves the health of Minnesotans by reducing the harm caused by tobacco. ClearWay Minnesota serves Minnesota through its grant-making program, through QUITPLAN® Services and through statewide outreach activities. It is funded with 3 percent of the state's 1998 tobacco settlement.

SOURCE ClearWay Minnesota