Friday, March 12, 2010
As the nation waits for the House of Representatives to pass health reform legislation, the US Senate took action yesterday to approve S. 1147, legislation to prevent tobacco smuggling and ensure the collection of all tobacco taxes. The vote on the bill, the “Prevent All Cigarette Trafficking Act of 2009 ” (PACT) was unanimous. Welcome news indeed since in recent months finding unanimity on any issue in the US Senate has been a tough task.
During Senate debate, chief sponsor Senator Herb Kohl of Wisconsin told fellow Senators: “Without innovative enforcement methods, law enforcement will not be able to effectively address the growing challenges facing them today. The PACT Act sets out to do just that by empowering states to go after out-of-state sellers who are violating their tax laws in Federal court.”
Kohl added that “the bill will keep tobacco out of the hands of kids…The PACT Act contains a strong age verification section that will prevent online sales of cigarettes by requiring sellers to use a method of shipment that includes a signature and photo ID check upon delivery.” The PACT Act also gives state and local governments direct rights to enforce the Act against illegal Internet sellers in federal court (while protecting State and Tribal sovereignty and immunity rights).
Partnership believes the most important impact of the legislation is closing a loophole that has allowed Internet tobacco sales to circumvent the payment of State sales taxes. Once the bill becomes law States will be free to increase their tobacco excise taxes without fear that out-of-state tobacco sellers can circumvent state tax requirements by selling cigarettes on the Internet.
The House bill HR 1676, passed back in May of 2009 on a vote of 397-11. The options ahead are for the House to either accept the Senate bill as passed or develop an amendment resolving minor differences between the two versions of the legislation. Given overwhelming support for the legislation there is reason to be hopeful final action will be completed so it can be forwarded to the President for his signature this Spring.
Ripley Forbes, Director, Government Affairs
Partnership for Prevention