As the 116th Congress came into session on January 8, 2019, a new bill was introduced by Rep. Rose DeLauro (D-CT) to House of Representatives that could have devastating consequences for the cigar industry. While H.R. 293 is called the “Youth Vaping Prevention Act of 2019”, it is a bill designed to take extreme actions aimed at reducing the use of all tobacco and e-tobacco products. Included in the bill is language that would ban Internet/mail-order sales, flavored tobacco, and increase taxes.
For banning Internet and mail-order sales, the bill proposes language to modify the Jenkins Act. In its current state, the Jenkins Act bans mail order and Internet sales of cigarettes and smokeless tobacco. Premium cigars, pipe tobacco, e-cigarettes, and other tobacco products are currently exempt to it. H.R. 293 proposes language to remove the exemption.
Late in 2018, DeLauro introduced H.R.7337, the “Stop Tobacco Sales to Youth Act of 2018”. This was a bill that was also aimed at modifying the Jenkins Act to Internet/mail-order sales. H.R. 293 goes further. It includes language to ban all flavored tobacco, including cigars. Meanwhile, there are proposals to the current tax code that would increase federal taxes on cigars. Currently, cigars weighing more than 3 pounds per thousand, are taxed at 52.75 percent of the price for which sold but not more than 40.26 cents per cigar. H.R. 293 would change it to “$24.78 per pound and a proportionate tax at the like rate on all fractional parts of a pound but not less than 5.033 cents per cigar.”.
DeLauro is a staunch anti-tobacco supporter. She is best remembered for trying to remove an exemption for premium cigars from a proposed Appropriations Bill back in 2016.
Mail Order/Internet sales and flavored tobacco are a large component of business for many retailers and cigar brands. Banning flavored tobacco is already something in the crosshairs of proposed regulations by the U.S. Food and Drug Administration.
At press time, the Trade Associations of the premium cigar industry have not issued a public statement on the proposed bill.
Photo Credit: U.S. Capitol Facebook Page