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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:Oklahoma's state bird the Scissor-Tailed Flycatcher is a somewhat quiet bird with beautiful plumage and a long sleek tail that is twice as long as its body. The deeply-forked tail resembles a pair of scissors. |
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| |  | | Tobacco History: Cigarettes and Literature | The Social History of SmokingGeorge Latimer AppersonChapter 7:The most famous of country clergymen of the early Georgian period is, of course, Fielding's lovable and immortal Parson Adams. Throughout "Joseph Andrews" the parson smokes at every opportunity. At his first appearance on the scene, in the inn kitchen, he calls for a pipe of tobacco before taking his place at the fireside. The next morning, when he fails to obtain a desired loan from the landlord, Adams, extremely dejected at his disappointment, immediately applies to his pipe, "his constant friend and comfort in his affliction," and leans over the rails of the gallery overlooking the inn-yard, devoting himself to meditation, "assisted by the inspiring fumes of tobacco." Later on, in the parlour of the country Justice of the Peace, who condemned his prisoners before he had taken the depositions of the witnesses against them, and who, by the way, also lit his pipe while his clerk performed this necessary duty, Adams, when his character has been cleared, sits down with the company and takes a cheerful glass and applies himself vigorously to smoking. A few hours later, when the parson, Fanny, and their guide are driven by a storm of rain to take shelter in a wayside ale-house, Adams "immediately procured himself a good fire, a toast and ale, and a pipe, and began to smoke with great content, utterly forgetting everything that had happened." In the same inn, after Mrs. Slipslop has appeared and disappeared, Adams smokes three pipes and takes "a comfortable nap in a great chair," so leaving the lovers, Joseph and Fanny, to enjoy a delightful time together.
Read More | The Social History of SmokingGeorge Latimer AppersonChapter 6:The local authorities in our eastern counties seem to have had some curious ideas of their own as to where tobacco should or should not be smoked. In a previous chapter we have seen that at Norwich, ale-house keepers were fined for permitting smoking in their houses. At Methwold, Suffolk, the folk improved upon this. The court-books of the manor of Methwold contain the following entry made at a court held on October 4, 1695: "We agree that any person that is taken smoakeinge tobacco in the street shall forfitt one shillinge for every time so taken, and itt shall be lawfull for the petty constabbles to distrane for the same for to be putt to the uses abovesaid [i.e. "to the use of the town"]. Wee present Nicholas Baker for smoakeinge in the street, and doe amerce him 1s." The same rule is repeated at courts held in the years 1696 and 1699, but no other fine is mentioned at any subsequent courts. The good folk at Methwold may have been adepts at petty tyranny, but such an absurd regulation must soon have become a dead letter. While we are in the eastern counties we may note that in 1694 there died at Ely an apothecary named Henry Crofts, who owned, among some other unusual items in his inventory, casks of brandy and tobacco, which shows that even at that date, when regular tobacconists' shops for the sale of tobacco had long been common, the old business connexion between apothecaries and tobacco still occasionally existed.
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