PCA Magazine Winter 2020

PREMIUMCIGARS.ORG WINTER 2020 | PCA The Magazine 15 S T A T E B R I E F I N G 2019 YEAR IN REVIEW: STATE HIGHLIGHTS Anti-Tobacco Legislation In 2019 the premium tobacco industry encountered more legislative and regulatory challenges at the state level than any other year in recent history. PCA monitored 898 state bills, up 50 percent from recent years, including smoking bans, tax increases, flavor bans, licensing schemes and more. For example, in Colorado, House Bill 1076, in its initial form, would have prohibited the consumption of premium cigars and pipe tobacco in retail tobacconist establishments. PCA initiated a successful effort to amend the legislation to protect member businesses. The amended version of the legislation was eventually passed and signed into law. In Oklahoma, PCA halted an effort led by a Republican member of leadership to significantly restrict cigar smoking in the state, including shutting down most cigar bars and limiting the ability of new tobacco shops and cigar lounges to open. The bill was stopped before it could come to the floor of the Oklahoma House of Representatives after a strong lobbying effort led by a member of the PCA Board of Directors. After the 2018 midterm elections, seven gubernatorial seats and five legislative chambers flipped from Republican to Democrat. Democrats also took control of the tied Connecticut Senate and fully functional control of the New York Senate. Due in part to these shake-ups, our industry no longer has many of the backstops we previously relied on since 2010. Even so, less than one percent of bills that are harmful to PCA members were enacted despite unyielding and renewed effort from the opposition, particularly in regard to tax increases. Thank you to our partner state associations and all Premium Cigar Association members who contacted elected officials and conducted meetings regarding the impact of proposed legislation on small businesses. Proactive Measures This year PCA pursued 175 percent more proactive legislation than our next best session, which included bills in 10 states. Fifty percent more proactive legislation was enacted than our next best session. In collaboration with the state associations and/or retail members in New Mexico, Arizona and Maryland, we successfully passed proactive legislation that makes a significant positive impact on local brick-and-mortar businesses. For example, in Arizona, PCA spearheaded Senate Bill 1347 which defines cavendish for purposes of taxation. The legislation originated from a complaint by a PCA member who was being charged a higher tax rate due to the incorrect classification of cavendish products by the Dept. of Revenue. The measure was signed into law by Governor Doug Ducey with an effective date of July 26. In New Mexico, a PCA member wanted to pursue a cigar tax cap and coordinated with PCA to work towards its adoption. House Bill 6, sponsored by Representative Trujillo, was amended by Senator Clemente Sanchez to include a $0.50 per cigar tax cap. The measure was signed into law by New Mexico Governor Michelle Lujan Grisham, effective July 1, giving members relief from the 25 percent other tobacco products (OTP) tax. In Maryland, after several years of working toward tax relief, our message that local small businesses cannot compete with national retailers that sell premium cigars and pipe tobacco into Maryland from out of state locations tax-free, resonated with legislators. An amendment to House Bill 1310 created equal tax treatment for in-state retailers and out-of-state retailers of premium cigars and pipe tobacco, effective Oct. 1. We are working with all stakeholders to finalize a fair and equitable resolution for all channels of retail. In Michigan, Senate Bill 58 has been introduced to eliminate the sunset on Michigan’s $0.50 cigar tax cap, which is set to expire late 2021. Grassroots efforts were ongoing throughout the year to connect PCA State Briefing