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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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| | | Tobacco Trivia and Facts:In 1998, a life size statue of a cattle drive, titled "On the Chisholm Trail," was set in place in Duncan, Oklahoma as a monument to the American Cowboy. |
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| |  | | Tobacco History: Cigarettes and Literature | The Social History of SmokingGeorge Latimer AppersonChapter 14:Readers of Sir Walter Scott will remember in "The Heart of Midlothian" one curious instance of eighteenth-century smoking in church—in a Scottish Presbyterian church, too. Jeanie Deans's beloved Reuben Butler was about to be ordained to the charge of the parish of Knocktarlitie, Dumbartonshire; the congregation were duly seated, after prayers, douce David Deans occupying a seat among the elders, and the officiating minister had read his text preparatory to the delivery of his hour and a quarter sermon. The redoubtable Duncan of Knockdunder was making his preparations also for the sermon. "After rummaging the leathern purse which hung in front of his petticoat, he produced a short tobacco-pipe made of iron, and observed almost aloud, 'I hae forgotten my spleuchan—Lachlan, gang doon to the Clachan, and bring me up a pennyworth of twist.' Six arms, the nearest within reach, presented, with an obedient start, as many tobacco-pouches to the man of office. He made choice of one with a nod of acknowledgment, filled his pipe, lighted it with the assistance of his pistol-flint, and smoked with infinite composure during the whole time of the sermon. When the discourse was finished, he knocked the ashes out of his pipe, replaced it in his sporran, returned the tobacco-pouch or spleuchan to its owner, and joined in the prayers with decency and attention." David Deans, however, did not at all approve this irreverence. "It didna become a wild Indian," he said, "much less a Christian and a gentleman, to sit in the kirk puffing tobacco-reek, as if he were in a change-house." The date of the incident was 1737; but whether Sir Walter had any authority in fact for this characteristic performance of Knockdunder, or not, it is certain that any such occurrence in a Scottish kirk must have been extremely rare.
Read More | The Social History of SmokingGeorge Latimer AppersonChapter 15: Before the end of the seventeenth century, however, the signs were ceasing to have any necessary association with the trade carried on under them, and tobacconists are found with shop-signs which had no reference in any way to tobacco. For instance, to take a few examples from the late Mr. Hilton Price's lists of "Signs of Old London" from Cheapside and adjacent streets, in 1695 John Arundell, tobacconist, was at the "White Horse," Wood Street; in the same year J. Mumford, tobacconist, was at the "Faulcon," Laurence Lane; in 1699 Mr. Brutton, tobacconist, was to be found at the "Three Crowns," under the Royal Exchange; in 1702 Richard Bronas, tobacconist, was at the "Horse Shoe," Bread Street; and in 1766 Mr. Hoppie, of the "Oil Jar: Old Change, Watling Street End," advertised that he "sold a newly invented phosphorus powder for lighting pipes quickly in about half a minute. Ask for a Bottle of Thunder Powder."
Again, in Fleet Street, Mr. Townsend, tobacconist, traded in 1672 at the "Three Golden Balls," near St. Dunstan's Church; while at the end of Fetter Lane, a few years later, John Newland, tobacconist, was to be found at the "King's Head."
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