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United for Missouri calls SB 1096 a big increase on small tobacco companies


JEFFERSON CITY, Mo. – United for Missouri urged its supporters to oppose Senate Bill 1096, the legislation that would force smaller tobacco manufacturers to pay into the tobacco settlement fund.

The group likened the legislation to a 400 percent tax increase on small tobacco companies that would be passed onto consumers and claimed senators supporting the legislation were helping big tobacco.

“Tobacco is harmful. It’s widely known that tobacco does cause  health problems. But we are not talking about reducing those risks by imposing this 400 percent tax increase,” wrote Carl Bearden, executive director of United for Missouri, in a letter to supporters. “We are talking about some Missouri senators who are doing Big Tobacco’s (sic) bidding and increasing the cost of their competitors’ products.”

The legislation is part of a settlement negotiated between Attorney General Chris Koster and large tobacco companies after Missouri lost a significant portion of its share of the Tobacco Master Settlement Agreement entered into in the 1990s.

Under that settlement, Missouri was required to make sure that the small tobacco companies did not gain an unfair market advantage through lower prices by not being part of the Master Settlement Agreement.

SB 1096, sponsored by Sen. Bob Dixon, R-Springfield, and co-sponsored by Sen. Joe Keaveny, D-St. Louis, would involve non-participating manufacturers into the settlement as well. Sen. Kurt Schaefer, R-Columbia, is one of the legislators pushing for the bill.

“You don’t think that dumping cheap cigarettes on Missouri is a behavior that’s analogous to what the larger manufacturers were doing?” Schaefer asked a representative for a smaller tobacco manufacturer during the committee hearing for the legislation last month. “You’re using your market advantage because you’re not participating and you’re not following the rules everyone else has to follow. We’re the dumping ground for cheap cigarettes in the United States because of this issue.”

However, United for Missouri maintains that enrolling these small tobacco companies into the Master Settlement Agreement amounts to a massive tax increase.

“Bottom line, SB 1096 will increase taxes on small tobacco companies by nearly 400 percent. Some senators claim this is not a ‘tax increase,’” Bearden wrote. “It’s pretty clear – that a government mandated fee on anything is a tax.”