Bill to Raise Tax on Bulk Tobacco Deferred

A bill that would have increased the state’s excise tax on bulk tobacco has apparently died in the state House of Representatives.

Senate Bill 492 was approved by the Senate and by the House Health Committee before being deferred Monday by the House Finance Committee.

The bill aimed at roll-your-own cigarette smokers would assess a tax of $3.20 on each ounce of tobacco, which is roughly equivalent to a pack of cigarettes. It is designed to tax bulk tobacco, as well as chewing tobacco, at approximately the same rate as cigarettes.

The bill noted that increases in the price of tobacco products tend to reduce smoking rates. It describes tobacco use as “the single most preventable cause of disease, disability and death in the United States.”

The bill said smoking causes approximately 1,100 deaths annually in Hawaii, and “poses a heavy burden on the state’s health care system and economy.” It said that translates to $336 million in health care expenditures and $320 million in lost productivity in Hawaii each year.

The latest version of the bill would have allocated about a third of the tax’s revenues to various entities including special funds for cancer research, community health and emergency medical services, with the remainder going into the state’s general fund.

The bill had the support of the American Cancer Society, various other health groups and the state departments of health and taxation.

Among those critical of the bill was RAI Services Co., an affiliate of the R.J. Reynolds Tobacco Co., which argued that “smokeless” tobacco products are “largely devoid of combustion-related toxicants” and shouldn’t be lumped in with smoking products.

Also testifying against the bill were several dozen individuals, some of whom argued that the tax was unfair. A few said that bulk tobacco should not be compared to cigarettes because, they said, it causes fewer health problems because it contains fewer additives.

Several dozen individuals also submitted testimony in support of the measure.