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| | | | Cigarette and Tobacco News:Border Zone Cigarette Taxation: Arkansas's Novel Solution to the Border Shopping ProblemFiscal Fact No. 168 Read complete article: Tax Foundation, 2009-04-09 Author: Mark Robyn
Summary: On February 12, the Arkansas General Assembly passed legislation to increase the state's excise rates on all tobacco products. As required by the bill, on March 1 the cigarette tax went from 59 cents to $1.15 per twenty-pack.1 But the same tax rate will not be enforced statewide. In a novel provision, the legislation, Act 180 of 2009, included a lower, variable rate for certain towns and stores located near the Arkansas border. . . .
Arkansas legislators are shrewdly acknowledging that cross-border shopping for low-tax cigarettes is a major problem for tax enforcement. To retain tax revenue and stop tax evasion, Arkansas has established a low-tax zone on its own side of the border. If this policy is successful in Arkansas other state legislatures may follow suit. To understand the rationale for this policy, the first of its kind among states, it is necessary to understand the problems that sometimes accompany cigarette taxation. . . .
It is important to note that this policy effectively shrinks the "tax border" of Arkansas. While there is still a minimum rate differential of three cents between Arkansas and any low-tax neighbor, this amount is small enough to provide almost no incentive for Arkansas residents to buy in other states. A significant tax differential does still exist however. The differential is now between different jurisdictions within the borders of Arkansas rather than between Arkansas and other states. . . .
Conclusion
Arkansas's border zone tax policy is a first in the world of cigarette excise taxation. This choice of policy is an acknowledgement of what many policy experts have been pointing out for a long time, that cigarette excise taxes are very susceptible to evasion through border shopping and other means, and that as tax differentials increase, these illegal activities become an increasing problem. Arkansas's policy may be successful enough that other states will consider similar policies in the future. While the policy will likely reduce border shopping and increase revenue to some degree, there are pros and cons that need to be weighed when states are considering whether to implement such a policy. The Arkansas experience will be instructive.
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| | | Tobacco Trivia and Facts:Springs, streams and lakes are the attractions at Chickasaw National Recreation Area, the first national park in the state of Oklahoma. Chickasaw lies in a transition zone where the Eastern deciduous forest and the Western prairies meet. |
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| |  | | Tobacco History: Cigarettes and Literature | The Social History of SmokingGeorge Latimer AppersonChapter 8:Says the Pipe to the Snuff-box, I can't understand What the ladies and gentlemen see in your face, That you are in fashion all over the land, And I am so much fallen into disgrace. - William Cowper. (From a letter to the Rev. John Newton, May 28, 1782.) "smoking has gone out," said Johnson in talk at St. Andrews, one day in 1773. "To be sure," he continued, "it is a shocking thing, blowing smoke out of our mouths into other people's mouths, eyes and noses, and having the same thing done to us; yet I cannot account why a thing which requires so little exertion, and yet preserves the mind from total vacuity, should have gone out." Johnson did not trouble himself to think of how much the vagaries of fashion account for stranger vicissitudes in manners and customs than the rise and fall of the smoking-habit; nor did he probably foresee how slowly but surely the taste for smoking, even in the circles most influenced by fashion, would revive. Boswell tells us that although the sage himself never smoked, yet he had a high opinion of the practice as a sedative influence; and Hawkins heard him say on one occasion that insanity had grown more frequent since smoking had gone out of fashion, which shows that even Johnson could fall a victim to the post hoc propter hoc fallacy.
Read More | The Social History of SmokingGeorge Latimer AppersonChapter 11: Laurence Oliphant, who was both a man of letters and a man of fashion, is generally credited with the introduction into English society of the cigarette; but it is difficult to suggest even an approximate date. Writing from Boulogne to W.H. Wills in September 1854, Dickens says, "I have nearly exhausted the cigarettes I brought here," and proceeds to give directions for some to be sent to him from London. This is the earliest reference I have found to cigarette-smoking in England; but it is possible that by "cigarettes" Dickens meant not what we now know as such, but simply small cigars. Mr. H.M. Hyndman, in his "Record of an Adventurous Life," says that when he was living as a pupil, about the year 1860, with the Rector of Oxburgh, his fellow-pupils included "Edward Abbott of Salonica, who, poor fellow, was battered to pieces by the Turks with iron staves torn from palings at the beginning of the Turco-Servian War. Cigarette-smoking, now so popular, was then almost unknown, and Abbott, who always smoked the finest Turkish tobacco which he rolled up into cigarettes for himself, was the first devotee of this habit I encountered."
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