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Starting April Fool's Day there will be a 2400% increase in the tax on bulk
cigarette tobacco. This is to fund some children's health program by driving
down the potential income from this source of revenue. That or the
government is again taking advantage of the victims of the smokeing habit.
You be the judge.
Here is the bad news. The following table is lifted directly from the
website describing this tax increase. Notice this makes the federal tax on
rolling tobacco roughly the same as the tax on ready made cigarettes.
Tobacco Product |
Tax Rate effective March 31, 2009 |
Tax Rate effective
April 1, 2009 |
Floor Stocks Tax Rate
(difference between
the rates) |
Small Cigarettes - Class A
(Weigh 3 lbs. or less per 1,000) |
$19.50 per 1,000
equivalent to:
$3.90 per carton $0.39 per pack |
$50.33 per 1,000
equivalent to:
$10.066 per carton $1.0066 per pack |
$30.83 per 1,000
equivalent to:
$6.166 per carton $0.6166 per pack |
Large Cigarettes - Class B
(Weigh more than 3 lbs. per 1,000) |
Up to and including 6½” long: $40.95 per 1,000 |
Up to and including 6½” long: $105.69 per 1,000 |
$64.74 per 1,000 |
Over 6½ “ long: Each 2¾” counts as 1 paper, then $19.50 per 1,000 |
Over 6 ½ “ long: Each 2¾” counts as 1 paper, then $105.69 per 1,000 |
Over 6½” long: $64.74 per 1,000 |
Small Cigars
(Weigh 3 lbs. or less per 1,000) |
$1.828 per 1,000 |
$50.33 per 1,000 |
$48.502 per 1,000 |
Large Cigars
(Weigh more than 3 lbs. per 1,000) |
20.719% of sales price but not to exceed $48.75 per 1,000 |
52.75% of sales price but not to exceed $0.4026 cents per cigar (or $402.60 per 1,000) |
NOT PART OF FLOOR STOCKS TAX |
Chewing Tobacco* |
$0.195 per pound |
$0.5033 per pound |
$0.3083 per pound |
Snuff* |
$0.585 per pound |
$1.51 per pound |
$0.925 per pound |
Pipe tobacco* |
$1.0969 per pound |
$2.8311 per pound |
$1.7342 per pound |
Roll-your-own tobacco* |
$1.0969 per pound |
$24.78 per pound |
$23.6831 per pound |
Cigarette paper |
Up to and including 6 ½” long: $0.0122 per 50 |
Up to and including 6½” long: $0.0315 per 50 |
$0.0193 per 50 |
Over 6 1/2“ long: Each 2 ¾” counts as 1 paper, then $0.0122 per 50 |
Over 61/2“ long: Each 2 ¾” counts as 1 paper, then $0.0315 per 50 |
Over 6½” long: $0.0193 per 50 |
Cigarette tubes |
Up to and including 6½” long: $0.0244 per 50 |
Up to and including 6½” long: $0.0630 per 50 |
$0.0386 per 50 |
Over 6½ “ long: Each 2¾” counts as 1 tube, then $0.0244 per 50 |
Over 6½ “ long: Each 2¾” counts as 1 tube, then $0.0630 per 50 |
Over 6½” long: $0.0386 per 50 |
Here's the good news. It is still cheaper than store boughts.
About the cheapest price per carton in the country for the cheapest generic
cigarettes with floor sweepings tobacco dust before this increase is about
$20 and will be $26.00. Based upon 6 oz of tobacco per carton the cost per
carton's worth was $7.71. With the increase it will be $16.60 per carton's
worth. That reduces the savings from roughly 60% to 35%.
Keep in mind this is based upon what is perhaps the cheapest carton price in
the country. If you live in a state with low state taxes the minimum price
for a name brand will be about $33 and if blessed with living in a high tax
state the sky is the limit. Your savings increase accordingly.
Another reason it is still cheaper is this only makes the federal tax
roughly the same. State and local taxes remain the same. This does not
matter much if you live in a tobacco state like Virginia. In high tax states
like New York this remains a major cost saving.
Remember you still have two powerful benefits even if the price were the
same. People who roll their own report their smoking decreasing by about
half. Your doctor been hassling you about smoking? Roll your own and report
the decrease. It might get him off your back for a visit or two.
The other benefit is quality. You do not need filters to make this tobacco
taste good. This is all pure tobacco and in a great variety of flavors and
strengths. You can even blend your own such as burley (D&R Two Timer)
and turkish (D&R Ramback) a combination I have not found but do enjoy.
If blending your own is over the top for you there are a huge variety blends
readily available.
These blends are created by master blenders not by amateurs like you and me.
That means the varieties are thoroughly mixed and they have the same cut.
Doing the former at home is tedious and the latter impossible.
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