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Please be advised the
Attorney General of the State of California has approved the language as
amended for an initiative measure titled: ‘The Tobacco Tax Act of 2006”.
The proponents can now begin gathering signatures in order to qualify
the same to go on the November 2006 ballot in California. The Tobacco
Tax Act of 2006 initiative calls for a $2.60 per pack tax increase and
therefore a tax increase on all other tobacco products. If the
initiative were to pass today the tax rate on other tobacco products
would be 135%.
Details of this proposed initiative were outlined in my newsletter dated
December 15, 2005. Refer to it if you have any questions.
The proponents have until July 10, 2006 to submit 600,000 signatures to
the Secretary of State in order for the proposed initiative to move onto
the November ballot.
Obviously, this is not good news for any of us in the tobacco industry.
There is little standing in the way of the proponents from gathering the
required signatures.
Industry leaders will need to formulate their strategy to counter this
initiative now! Unfortunately, everyone will be looking to Altria
(Philip Morris USA) to take the lead in any counter measures since they
have the deep pockets.
You can count on a continuing aggressive media campaign by the
proponents wherein they will attack all things related to tobacco and
second hand smoke as they prepare the voters for their initiative. This
will be an all out attack of epic proportions due to the jackpot at the
end of this rainbow - $2.4 billion annually if they are successful.
The proposed tax increase is to go into effect on January 1, 2007 with
the floor stock tax to be based on inventory levels at 12:01 a.m. on
January 1, 2007
We will keep our due paying members updated by email as any new
developments take place.
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