Hank Investigates: Filtered Cigar Tax - 7News Boston WHDH-TV

Hank Investigates: Filtered Cigar Tax

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This is not a package of cigarettes. Yes, it has the same shape. It has the same wrapping.

It has the surgeon general's tobacco warning. Yes, it contains 20 thin tobacco sticks, each with a filter, that you light with a match and inhale. But this is not a package of cigarettes. This one's labeled: cigars.

And that one difference is costing Massachusetts millions of dollars every year.

Eric Lindblom, Tobacco policy expert, http://www.tobaccofreekids.org/

"It's horrible. It's not illegal, but it is manipulating the system."  

This is a package of cigarettes.  On the side - it has this Massachusetts tax stamp.

Every pack of cigarettes sold here is required by law to have one. It means the manufacturer has paid $2.51 per pack to the Mass Department of Revenue. And that adds up to $580 million dollars a year in the state coffers.

Commissioner Navjeet Bal MA, Department of Revenue The general fund is used to pay for all the state's budget needs, including health care, education, public safety, a ll the state's budget needs."

Now look again at these packs of filtered cigars not one has a tax stamp. But their manufacturers are not breaking state law - they're taking advantage of it.  Because the legal definition of a "cigarette" in Massachusetts includes a specific weight--all manufacturers have to do is make these a tiny bit heavier and poof the tax requirement goes up in smoke.

Hank

"These things that are marked cigars--do they need a tax stamp?"

Commissioner Navjeet Bal MA, Department of Revenue

"No."

If these cigars needed tax stamps? Last year Massachusetts could have pulled in another ten million dollars!

Hank

"That's a lot of money!"

Commissioner Navjeet Bal MA, Department of Revenue

 "Obviously it's a lot of money and it would make a difference."

But since they're not taxed like cigarettes, the price for these is very cheap.This pack of cigarettes is $8.50. But we bought this pack of filtered cigars for $2.43! Because they were so much more affordable Jeffrey Cincotta of East Boston smoked two packs of them a day, his mother says. Until he died.

Madeline Cincotta, Mother of Smoker

"He thought he'd won the lottery. He thought he'd found something great! He thought he'd beat the system of taxes, because he was buying a two dollar pack of cigarettes!"

Filtered cigar makers say it's just smart business.  By increasing the products' weight by making a heavier filter, or a thicker wrapping they can charge a significantly lower price, and make significantly greater profits. The cigar association insists the cheap price is not an incentive to smoke--saying

"We have seen little evidence of this."

But the Centers for Disease Control say though lung cancer and heart disease and birth defects are absolutely the result of smoking, money is the number one reason people quit. They say by making these things cheap, they keep people smoking.

Eric Lindblom, Tobacco policy expert, http://www.tobaccofreekids.org/

"And that translates directly into more kids smoking, more adults smoking, and more people dying from smoking."

Does the low price mean higher sales? Yup Store clerks told us the much cheaper smokes fly off the shelves.

Though it's a big win for the manufacturers, it's a big financial loss for the state and a very personal one for people like Jeffrey's mother.

Madeline Cincotta, Mother of Smoker

"I guarantee there are a lot more people smoking these than we could ever imagine, because of the money."

The only way state lawmakers can change this is to tax these filtered cigars the same way they tax cigarettes.  

(Copyright (c) 2010 Sunbeam Television Corp. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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