1. TM Annette K. McClave Health Scientist, Epidemiology Branch Michael A. Tynan Public Health Analyst, Policy Unit CDC, Office on Smoking and Health Smokeless Tax Policies Differences in Taxes on Cigarettes and Smokeless Tobacco 5 th National Summit on Smokeless & Spit Tobacco September 21, 2009

2. TM Health Consequences of Smokeless Tobacco Use  Smokeless tobacco use can lead to nicotine addiction and other serious health consequences –Oral, pancreatic cancer –Possible acute cardiovascular effects (e.g. Heart Rate, Blood Pressure) –Adverse Pregnancy Outcomes –Periodontal Disease –May lead to cigarette smoking, delay quitting Adolescents who use smokeless tobacco are more likely to become cigarette smokers

3. TM Smokeless Tobacco Use in the U.S.  More than 8.1 million Americans aged 12 or older (3.2%) are current smokeless tobacco users  Smokeless use has not declined since 2002 Past month use of smokeless tobacco among persons age 12 and older in the U.S. – 2002 to 2007 Source: SAMHSA, National Survey on Drug Use and Health (2002-2007)

4. TM Excise Taxes as a Policy Tool  Excise tax increases are a policy intervention recommended to reduce tobacco consumption by raising the price of tobacco products –Surgeon General –Institute of Medicine –Community Guide –World Health Organization

5. TM Review from 2000 SGR  Economic studies tend to focus on the impact of cigarette taxes on consumption –10% increase in price reduces use by 4%  Very little research exists on the impact tax increases may have on smokeless tobacco use  However, the existing research (though limited) shows higher smokeless tobacco prices are associated with lower smokeless tobacco use Source: Reducing Tobacco Use: A Report of The Surgeon General (2000)

6. TM Tax Imbalance  Historically, cigarette taxes have increased at a greater rate than smokeless taxes –Price of cigarettes rise more rapidly than smokeless  This imbalance may also impact smokeless –Previous results show an imbalance in cigarette and smokeless tax increases potentially results in higher smokeless tobacco use  If cigarette taxes continue to increase disproportionately, the gap between cigarette and smokeless prices will potentially increase Source: Reducing Tobacco Use: A Report of The Surgeon General (2000)

7. TM Indentifying Tax Imbalances  We reviewed state excise tax data available from Center for Disease Control and Prevention (CDC) and National Cancer Institute (NCI) legislative databases –CDC’s State Tobacco Activities Tracking and Evaluation (STATE) System –NCI’s State Cancer Legislative Database (SCLD) Program  Through Library of Congress research, we reviewed recent legislation to update the history of Federal excise tax increases contained in 2000 Surgeon General’s Report

8. TM 19171901 History of Federal Excise Tax Imbalance Cigarette Excise Tax Enactment Sources: Reducing Tobacco Use: A Report of The Surgeon General (2000); Children’s Health Insurance Program Reauthorization Act of 2009. 1864 2009 2002 2000 1865 1866 1867 18681875 1883 1897 189819101919 1940 1942 1951 1983 1991 1993

9. TM 19171901 History of Federal Excise Tax Imbalance Cigarette Excise Tax Enactment Smokeless Excise Tax Enactment Sources: Reducing Tobacco Use: A Report of The Surgeon General (2000); Children’s Health Insurance Program Reauthorization Act of 2009. 1864 2009 2002 2000 1865 1866 1867 18681875 1883 1897 189819101919 1940 1942 1951 1983 1991 1993 1986 1991 1993

10. TM Recent Federal Tax Increases ProductPrevious TaxNew Tax Percent Increase Cigars20.719%52.75%154% Cigarettes (pack of 20) $0.39$1.0066158% Snuff (per pound) $0.585$1.51158% Chewing Tobacco (per pound) $0.195$0.5033158% Pipe Tobacco (per pound) $1.0969$2.831158% Roll Your Own (per pound) $1.0969$24.782159%  Federal tax increased on April 1, 2009  Most products increased by the same percentage as cigarettes, except for roll your own tobacco Source: Children’s Health Insurance Program Reauthorization Act of 2009.

11. TM History of State Excise Tax Enactments  By 1949, 43 states had established a cigarette tax  By 1969 every state had a cigarette tax  By 1949, only 12 states had a smokeless tax  Half of smokeless taxes were established after 1980 –7 states established a tax in last 10 years –No smokeless tax in Pennsylvania  Took an average of 31 years after a state established a cigarette tax to establish a smokeless tax State Cigarette TaxesState Smokeless Taxes Sources: National Cancer Institute’s State Cancer Legislative Database Program; Centers for Disease Control and Prevention’s State Tobacco Activities Tracking and Evaluation System.

12. TM State Excise Tax Increases 1995-2008  Between 1995 and 2008 there were 107 separate state cigarette excise tax increases  Between 1995 and 2008 there were only 24 state smokeless excise tax increases State Cigarette TaxesState Smokeless Taxes Source: Centers for Disease Control and Prevention’s State Tobacco Activities Tracking and Evaluation System.

13. TM State Tax Increases in 2009  So far this year, 12 states have enacted tax increases on cigarettes  10 of these states have also increased the tax on smokeless products  4 other states have increased the smokeless tax without increasing the cigarette tax State Cigarette TaxesState Smokeless Taxes  A promising start?

14. TM AZ WY OR ID MT UT NV WA CA TX AR OK ND LA KS IA NE SD CO NM MO MN TN AL KY OH MS MI IN GA FL PA ME NY WV VA NC SC VT CT D.C. RI NJ MD DE NH MA IL WI AK HI Cigarette Tax Increased (n=2) Smokeless Tax Increased (n=4) No Change in Tobacco Taxes (n=35) Both Cigarette and Smokeless Tax Increased (n=10) Note: DC is included among results for states. 2009 State Tobacco Excise Tax Increases

15. TM Issues with Smokeless Excise Taxes  There is no uniform method to tax smokeless products –Federal smokeless tax is based on weight –States smokeless taxes are based on: percentage of price (most common for smokeless) –sales price/purchase price –wholesale price –manufacturer sales, list or invoice price by weight (most common for snuff) percentage of product value or gross receipt of sales  Various methods in taxation complicate evaluation Source: Centers for Disease Control and Prevention’s State Tobacco Activities Tracking and Evaluation System.

16. TM Other Policy Gaps: Graphic Warning Labels  By June 2010 new text warnings will be required for smokeless – comprise 30% of package  By September 2012, new graphic warnings required for cigarettes –comprise the top 50% of the front and back of a pack  Graphics allowed, but not required for smokeless Source: Family Smoking Prevention and Tobacco Control Act of 2009 Image: Health Canada

17. TM Annette K. McClave AMcClave@cdc.gov Health Scientist, Epidemiology Branch Michael A. Tynan MTynan@cdc.gov Public Health Analyst, Policy Unit CDC, Office on Smoking and Health Smokeless Tax Policies Differences in Taxes on Cigarettes and Smokeless Tobacco The findings and conclusions in this presentation are those of the author and do not necessarily represent the official position of the Centers for Disease Control and Prevention.