Summary of Prop B

Summary of Prop B’s Outrageous & Unfair 760% Tax Increase!

I. Executive Summary. In 2002, common-sense, conservative Missouri voters defeated Prop A’s outrageous and unfair 324% tax increase. In 2006, common-sense, conservative Missouri voters defeated Amendment 3′s even more outrageous and unfair 470% tax increase.

Prop B, which will be on the 11/6/12 ballot, is the most outrageous and unfair tax increase yet.

Prop B increases the following taxes:

  • 760% tax increase on value cigarettes such as Decade, Echo and Edgefield (increase is $1.299 per pack, from 17¢ to $1.469 per pack).
  • 429% tax increase on all cigarettes (increase is 73¢ per pack, from 17¢ to 90¢ per pack).
  • 250% tax increase on “roll your own” tobacco (increase is from 10% to 35%).
  • 150% tax increase on “other tobacco products” such as cigars and chew (increase is from 10% to 25%).

The consequences of Prop B are staggering.

  • Prop B will decimate tobacco sales for every convenience store and retailer in Missouri.
  • Prop B will put every convenience store and retailer in Missouri at a significant competitive tax disadvantage with 4 of our 8 border states: Kansas (79¢ per pack), Nebraska (64¢ per pack), Tennessee (62¢ per pack), and Kentucky (60¢ per pack).
  • Prop B will drastically reduce the tax advantage Missouri retailers have over Oklahoma ($1.03 per pack), Arkansas ($1.15 per pack), Iowa ($1.36 per pack) and Illinois ($1.98 per pack).
  • This massive competitive tax disadvantage will decimate critical cross-border sales of gasoline, beer, alcohol, tobacco and all other products.
  • A decrease in critical cross-border sales of gasoline, beer, alcohol, tobacco and all other products will translate into dramatically reduced sales, motor fuel and other tax revenues for local and state coffers.

II. Ultimate Goal Of The Prop B Proponents. Never forget that the ultimate goal of the anti-tobacco zealots who support Prop B is to outlaw all tobacco products by initiating, supporting and pursuing outrageous and unfair taxation and regulation!

III. Analysis and Impact of Prop B:

  1. 429% Tax Increase On All Cigarette Brands. Increases per pack taxes on all brands by 73¢, from 17¢ to 90¢ per pack, or an outrageous and unfair 429% tax increase! [73¢ per pack divided by 17¢ per pack = 429%.]
  2. 335% Additional Tax Increase On NPM Cigarette Brands. NPMs (value brand cigarettes such as Decade, Echo, Edgefield, etc.) are taxed an additional 56.9¢ per pack by the allocable share repeal (ASR) included in Prop B. This is an additional outrageous and unfair 335% tax increase!

    [$5.82 per carton total MSA payment - 13¢ per carton the NPMs currently pay to Missouri = $5.69 per carton or 56.9¢ per pack. 56.9¢ per pack divided by 17¢ per pack, or $5.69 per carton divided by $1.70 per carton = 335%.]

  3. 760% Total Tax Increase On NPM Cigarette Brands. Prop B increases the total tax and fees on non-participating manufacturer (NPM – value brand cigarettes) brands by 764%, or $1.299, from 17¢ to $1.469 per pack. However, to make it easier for signage and message purposes MPCA has rounded-down to 760%.

    [73¢ per pack on all cig brands + 56.9¢ per pack on NPM brands = $1.299 per pack divided by 17¢ per pack = 764%.]

  4. 4. Will Devastate C-Stores and Retailers. Prop B will put every convenience store and retailer at a massive competitive tax disadvantage with Kentucky (60¢ per pack), Tennessee (62¢ per pack), Nebraska (64¢ per pack) and Kansas (79¢ per pack).

    Prop B will drastically reduce the advantage Missouri retailers have over Oklahoma ($1.03 per pack), Arkansas ($1.15 per pack), Iowa ($1.36 per pack) and Illinois ($1.98 per pack).

  5. 250% Tax Increase On RYO. Roll your own (RYO) tobacco is currently taxed at 10%. Prop B increases the tax by 25%, from 10% to 35%, or an outrageous and unfair 250% tax increase! [25% divided by 10% = 250%.]
  6. 150% Tax Increase On OTP. Other tobacco products (OTP) are currently taxed at 10%. Prop B increases the tax by 15%, from 10% to 25%, or an outrageous and unfair 150% tax increase! [15% divided by 10% = 150%.]
  7. Wholesaler Stamping Reduction. Reduces from 3% to 0.5% the compensation a tobacco wholesaler receives for tax stamping.
  8. Additional Taxes Apply To Inventory (Floor Tax). Massive new taxes apply to inventory on hand as of 12:01 AM on 1/1/13.

IV. Final Thoughts. MPCA continues to support a reasonable tax increase on tobacco products that will allow Missouri retailers to maintain their competitive tax advantage over our higher-taxed border-states.

However, all Missourians, smokers and non-smokers alike, can agree that while education deserves to be adequately funded and tobacco deserves to be fairly taxed, Prop B’s outrageous and unfair 760% tax increase is simply too big and too dangerous.

Enough is enough. Please “Vote “NO” on Prop B!”

V. How To Get Involved. To get involved and actively oppose Prop B, please contact:

Ronald J. Leone, Executive Director
Missouri Petroleum Marketers and Convenience Store Association (MPCA)
205 E. Capitol Avenue, Suite 200, Jefferson City, Missouri, 65101
573.864.5189 (cell), 573.635.7117, ext. 16 (work) or ron@mpca.org