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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 7:Hogarth himself was a confirmed pipe-lover. When he and Thornhill and their three companions set out from Gravesend for the final stage, up the river, of their famous "Five Days Peregrination," we are told that they hired a boat with clean straw, and laid in a bottle of wine, pipes, tobacco, and light, and so came merrily up the river. The arm-chair in which Hogarth was wont to sit and smoke is still preserved in his house at Chiswick, which has been bought and preserved as a memorial of the moralist-painter; and in the garden of the house may still be seen the remains of the mulberry tree under which Mr. Austin Dobson suggests that Hogarth and Fielding may have sat and smoked their pipes together in the days when George was King.
Read More | The Social History of SmokingGeorge Latimer AppersonChapter 15:Where Mr. Lucas's second survivor may be is unknown to me. Not so many years ago a wooden highlander, as a tobacconist's sign, was a conspicuous figure in Knightsbridge, and there was another in the Westminster Bridge Road; but tempus edax rerum has consumed them with all their brethren. In a few provincial towns a wooden highlander may still be found at the door of tobacco shops, but they are probably destined to early disappearance. In 1907 one still stood guard-a tall figure in full costume-outside a tobacconist's shop in Cheltenham, and may still be there. There is a highlander of oak in the costume of the Black Watch still standing, I believe, in the doorway of a tobacco shop at St. Heliers, Jersey. It is traditionally said to have been originally the figure-head of a war vessel which was wrecked on the Alderney coast. Another survivor may be seen at the door of a shop belonging to Messrs. Churchman, tobacco manufacturers, in Westgate Street, Ipswich. A correspondent of "Notes and Queries" describes it as a very fine specimen in excellent condition, and adds: "Mr. W. Churchman informs me that it belonged to his grandfather, who established the business in Ipswich in 1790, and he believed it was quite 'a hundred' year old at that time."
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