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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 8:More than one writer of recent days has absurdly misrepresented Johnson as a smoker. The author of a book on tobacco published a few years ago wrote—"Dr. Johnson smoked like a furnace"—a grotesquely untrue statement—and "all his friends, Goldsmith, Reynolds, Garrick, were his companions in tobacco-worship." Reynolds, we know— When they talk'd of their Raphaels, Corregios, and stuff, He shifted his trumpet, and only took snuff. Johnson and all his company took snuff, as every one in the fashionable world, and a great many others outside that charmed circle, did; but Johnson did not smoke, and I doubt whether any of the others did.
Read More | The Social History of SmokingGeorge Latimer AppersonChapter 11: When life was all a summer day, And I was under twenty, Three loves were scattered in my way- And three at once are plenty. Three hearts, if offered with a grace, One thinks not of refusing. The task in this especial case Was only that of choosing. I knew not which to make my pet- My pipe, cigar, or cigarette. - Henry S. Leigh.
The social history of smoking in later Victorian days is marked by the triumph of the cigarette. The introduction of the cigar, as we have seen, brought about the revival of smoking, from the point of view of fashion, in the early decades of the nineteenth century; and the coming of the cigarette completed what the cigar had begun.
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