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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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| | | Black Hawk State Trivia and Facts:Originally Indian Territory, the state of Oklahoma was opened to settlers in a "Land Rush" in 1889. On a given date, prospective settlers would be allowed into the territory to claim plots of land by grabbing the stakes marking each plot. A few of these settlers entered to claim land before the official start of the land run; these cheaters were called "Sooners". |
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| |  | | Tobacco History: Cigarettes and Literature | The Social History of SmokingGeorge Latimer AppersonChapter 14:In remote English and Welsh parishes men seem occasionally to have smoked in churches without any intention of being irreverent, and without any consciousness that they were doing anything unusual. Canon Atkinson, in his delightful book "Forty Years in a Moorland Parish," tells how, when he first went to Danby in Cleveland—then very remote from the great world—and had to take his first funeral, he found inside the church the parish clerk, who was also parish schoolmaster by the way, sitting in the sunny embrasure of the west window with his hat on and comfortably smoking his pipe. A correspondent of the Times in 1895 mentioned that his mother had told him how she remembered seeing smoking in a Welsh church about 1850—"The Communion table stood in the aisle, and the farmers were in the habit of putting their hats upon it, and when the sermon began they lit their pipes and smoked, but without any idea of irreverence." In an Essex church about 1861, a visitor had pointed out to him various nooks in the gallery where short pipes were stowed away, which he was informed the old men smoked during service; and several of the pews in the body of the church contained triangular wooden spittoons filled with sawdust.
Read More | The Social History of SmokingGeorge Latimer AppersonChapter 9:Other illustrations of folk who smoked, not cigars, but pipes, may be drawn from "Pickwick," which was published in 1836. At the very beginning, when Mr. Pickwick calls a cab at Saint Martin's-le-Grand, the first cab is "fetched from the public-house, where he had been smoking his first pipe." At Rochester, Mr. Pickwick makes notes on the four towns of Strood, Rochester, Chatham and Brompton, where the military were present in strength, and hence the observant gentleman noted—"The consumption of tobacco in these towns must be very great: and the smell which pervades the streets must be exceedingly delicious to those who are extremely fond of smoking." On the evening of the election at Eatanswill, Tupman and Snodgrass resort to the commercial room of the Peacock Inn, where "the atmosphere was redolent of tobacco-smoke, the fumes of which had communicated a rather dingy hue to the whole room, and more especially to the dusty red curtains which shaded the windows." Here, among others, were the dirty-faced man with a clay pipe, the very red-faced man behind a cigar, and the man with a black eye, who slowly filled a large Dutch pipe with most capacious bowl. Tupman and Snodgrass were of the company and smoked cigars. Sam Weller's father smoked his pipe philosophically. If Sam's "mother-in-law" "flies in a passion, and breaks his pipe, he steps out and gets another. Then she screams wery loud, and falls into 'sterics; and he smokes wery comfortably 'till she comes to agin." What better example could there be of pipe-engendered philosophy? When Mr. Pickwick and Sam look in at old Weller's house of call off Cheapside, they find the boxes full of stage coachmen, drinking and smoking, and among them is the old gentleman himself, "smoking with great vehemence." After having given his son valuable parental advice, "Mr. Weller, senior, refilled his pipe from a tin box he carried in his pocket, and, lighting his fresh pipe from the ashes of the old one, commenced smoking at a great rate."
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