Chewing tobacco tax going down

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Tax will drop from 41 cents to 19 cents per package

By Leslie Moore


Smokeless tobacco users who buy chewing or "spit" tobacco such as Kentucky-produced Red Man and Mammoth Cave, can expect to pay a bit less starting in August, when Kentucky's tax on chewing tobacco decreases from roughly 41 cents per pack to 19 cents.

House Bill 361, passed on March 22, is mostly remembered for establishing medical review panels that can potentially lower liability costs for long-term care facilities, but the bill also contains a provision that changes the tax on chewing tobacco from a percentage tax to a unit tax.

According to Sen. Jimmy Higdon, R-Lebanon, the reason for the tax cut is not special treatment by lawmakers, but to correct a "fairness" issue that stems from when changes were made to Kentucky's tax policies on tobacco products in 2008.

"There was an inequity in the amount of tax we charged on snuff tobacco, which is the biggest share of the smokeless tobacco market," Higdon said.

According to Higdon, the amount of chewing tobacco sold in Kentucky is a distant second to snuff tobacco.

"There were two choices. One was to raise the tax on other types of smokeless tobacco or to lower the rate on the pouch chewing tobacco," Higdon said.

After failed attempts to raise the tax on snuff-type tobacco products, Higdon said lowering the tax on chewing tobacco was the only solution lawmakers could agree on to make tobacco taxes fair.

Kerri Richardson, communications director in Gov. Steve Beshear's office, said, "There were positives and negatives in the bill, but from our perspective, the bill was revenue neutral."

But in the wake of recent failed attempts to raise taxes on all types of tobacco, and with 16 percent of Kentucky's youth currently using spit tobacco, according to statistics from the Lake Cumberland District Health Department, public health advocates across Kentucky are calling the health consequences anything but neutral.

"The decrease of tax on spit tobacco is a concern because research shows that an increase in price of tobacco products decreases youth usage rates," Jackie Hodges, health educator at the Taylor County Health Department, said.

Thirteen percent of Taylor County's youth use spit tobacco, Hodges said, and the earlier a person starts using tobacco, the more damaging its effects.

Although some tobacco users might consider smokeless tobacco a safe alternative to cigarettes, Hodges said there are numerous negative effects from using smokeless tobacco because it contains highly addictive nicotine and many of the same ingredients used in cigarettes.

According to Pat Hardesty, county extension agent for agriculture and natural resources, growers of dark tobacco, the type of tobacco used to make chewing tobacco, might experience some benefit from the tax decreases.

"Dark tobacco used to not be as profitable as burley tobacco on an acre-to-acre basis," Hardesty said. "But the last two or three years, that's turned around. I think folks growing dark tobacco are actually making more per acre than folks growing burley tobacco."

But Hardesty said local burley tobacco producers will not be affected by the tax cut because dark tobacco is not grown in Taylor County, but in the western part of the state, as well as in North Carolina, South Carolina and Maryland.

Though the popularity of chewing tobacco has waned in the last several decades, the effects of the tax decrease are yet to be seen.

"Kentucky already has the highest rates of tobacco use among teens and adults," Hodges said. "The lower the price, the more accessible tobacco is going to be to young people."

Rep. John "Bam" Carney, R-Campbellsville, and tobacco retailers Campbellsville Tobacco Shed, Bo's Smoke Shop and Puff & Chew Smoke Shop were not available for comment before press time.