New Mexico legislation (HB 428) would impose a 53% tax on e-cigarettes

[Bill Godshall]

New Mexico legislation (HB 428) would redefine “tobacco product” for tax purposes to include e-cigarettes and dissolvables, and would increase the tax rate for OTP (i.e. all tobacco products except cigarettes) from 25% to 53% of manufacturer's price.
HB0428
New Mexico Legislature

HB 428 was referred to the House Health, Govt and Indian Affairs Cmte and to the Taxation and Revenue Cmte
New Mexico Legislature
New Mexico Legislature

There is only one bill sponsor (Mimi Stewart-D) out of 70 House members, and she isn't on either one of the committees (but she chairs the Education Committee). Democrats control the NM House.

The key (but deeply flawed) argument Stewart will make in support of her bill is that establishes equal taxation of all tobacco products (as CTFK estimated that NM's $1.66/pack cigarette tax is 53% of the manufacturer's price for cigs).
http://www.tobaccofreekids.org/research/factsheets/pdf/0169.pdf

In fact, tobacco products should be taxed according to the product's risk and to the amount of state expenditures are spent to treat problems caused by usage of the products.

Since cigarettes are at least 100 times more hazardous than e-cigarettes and smokeless tobacco products, and since cigarette smoking imposes at least 100 times more healthcare expenditures on NM taxpayers than e-cigarettes and smokeless tobacco, cigarettes should be taxed at a much higher rate.

 

[Placebo Effect]

CASAA is currently working on a Call to Action. In the meantime, here is the contact list for the House Health, Government, and Indian Affairs Committee.

We need to come out strong against this and all other tax bills.

Rep. James Roger Madalena (D-Chair)
373 Buffalo Hill Road
Jemez Pueblo, NM 87024
Capitol Phone: (505) 986-4840
Home Phone: (575) 834-7005
Email: james.madalena@nmlegis.gov

Rep. Nick L. Salazar (D-Vice Chair)
PO Box 1076
Ohkay Owingeh, NM 87566
Capitol Phone: (505) 986-4433
Office Phone: (505) 663-5849
Home Phone: (505) 852-4178
Email: nick.salazar@nmlegis.gov

Rep. Alonzo Baldonado (R)
PO Box 370
Los Lunas, NM 87031
Capitol Phone: (505) 986-4227
Office Phone: (505) 363-6214
Email: alonzo.baldonado@nmlegis.gov

Rep. Kelly K. Fajardo (R)
1125 North Molina
Belen, NM 87002
Capitol Phone: (505) 986-4220
Home Phone: (505) 573-0471
Email: kelly.fajardo@nmlegis.gov

Rep. Nate Gentry (R)
3716 Andrew Drive NE
Albuquerque, NM 87110
Capitol Phone: (505) 986-4757
Home Phone: (505) 508-0782
Email: natefornm@gmail.com

Rep. Yvette Herrell (R)
PO Box 4338
Alamogordo, NM 88311
Capitol Phone: (505) 986-4248
Home Phone: (575) 430-2113
Email: yherrell@yahoo.com

Rep. Emily Kane (D)
9817 Riverside Drive NW
Albuquerque, NM 87114
Capitol Phone: (505) 986-4464
Home Phone: (505) 890-4319
Email: emilykane4nm@gmail.com

Rep. Rodolpho "Rudy" S. Martinez (D)
PO Box 164
Bayard, NM 88023
Capitol Phone: (505) 986-4235
Office Phone: (575) 537-8609
Home Phone: (575)537-3105
Email: rodolpho.martinez@nmlegis.gov

Rep. Terry H. McMillan (R)
2001 E. Lohman Avenue No. 282
Las Cruces, NM 88001
Capitol Phone: (505) 986-4450
Office Phone: (575) 635-0534
Email: docmcmillan@gmail.com

Rep. Elizabeth "Liz" Thomson (D)
1216 Westerfeld Drive NE
Albuquerque, NM 87112
Capitol Phone: (505) 986-4255
Home Phone: (505) 239-1781
Email: liz.thomson@nmlegis.gov

Rep. Luciano "Lucky" Varela (D)
1709 Callejon Zenaida
Santa Fe, NM 87501
Capitol Phone: (505) 986-4320
Home Phone: (505) 982-1292
Email: lucky4st@msn.com

Comma delimited list:
james.madalena@nmlegis.gov, nick.salazar@nmlegis.gov, alonzo.baldonado@nmlegis.gov, kelly.fajardo@nmlegis.gov, natefornm@gmail.com, yherrell@yahoo.com, emilykane4nm@gmail.com, rodolpho.martinez@nmlegis.gov, docmcmillan@gmail.com, liz.thomson@nmlegis.gov, lucky4st@msn.com

Semicolon delimited list:
james.madalena@nmlegis.gov; nick.salazar@nmlegis.gov; alonzo.baldonado@nmlegis.gov; kelly.fajardo@nmlegis.gov; natefornm@gmail.com; yherrell@yahoo.com; emilykane4nm@gmail.com; rodolpho.martinez@nmlegis.gov; docmcmillan@gmail.com; liz.thomson@nmlegis.gov; lucky4st@msn.com

 

[Placebo Effect]

CASAA: Call to Action! New Mexico Tax on E-Cigarettes -- HB428

 

[Placebo Effect]

This bill passed out of the Health Committee earlier this week.

It is scheduled for a vote tomorrow in the House Taxation & Revenue Committee -- New Mexico Legislature

CASAA did just send a letter to all the members of the Taxation & Revenue Committee asking them to vote NO on the bill

 

[Fiamma]

I see the bulk of the estimated tax revenues are going to the general fund. It figures.

Sending emails, my budget for the phone is used up until my next Social Security check arrives.

Hard to believe that in this day and age a representative has no email. The rest have all received an emailed letter.

 

[brupow]

Sent an email to each of the legislators on the list (thanks to copy/paste), with smatterings of Bill's reasoning...so much better than my own. Hope they'll take heed to someone from SE New Mexico.

 

[Bill Godshall]

Just sent the following e-mail to NM House Taxation and Revenue Committee Members
edward.sandoval@nmlegis.gov, jimtrujillo@msn.com, anna.crook@nmlegis.gov, george.dodgejr@nmlegis.gov, stephen.easley@nmlegis.gov, JasonHarperNM@gmail.com, lewisfornm@gmail.com, bill.mccamley@nmlegis.gov, denroch@hotmail.com, jeff.steinborn@nmlegis.gov, jamesstrickler@msn.com, tom@tomtaylor.net, carl.trujillo@nmlegis.gov, bobwooley66@gmail.com

To: New Mexico House Taxation and Revenue Committee Members
From: Bill Godshall, Executive Director, Smokefree Pennsylvania
RE: Please reject HB 428

As one who has successfully campaigned to reduce cigarette consumption since 1986 at local, state and federal levels, I strongly urge you to reject HB 428 because it threatens consumer and public health by imposing unwarranted punitive taxes (instead of protecting public health as Rep. Mimi Stewart falsely claims).

Cigarette smoking causes >99% of all tobacco attributable morbidity, mortality and healthcare costs, while the use of Other Tobacco Products causes <1%. So there is no public health or fiscal justification for increasing the tax rate on Other Tobacco Products from 25% to 53% of manufacturer’s price, nor is there any justification for changing the definition of “tobacco product” to impose an outrageous 53% tax on electronic cigarettes (e-cigarettes), which have helped several million cigarette smokers quit and/or sharply reduce cigarette consumption during the past several years.

Scientific and empirical evidence has consistently confirmed that smokeless tobacco products and e-cigarettes are >99% less hazardous than cigarettes. Smokers who switch to e-cigarettes and/or smokeless tobacco products reduce their mortality risks nearly as much as smokers who quit all tobacco/nicotine use. Several million smokers have already quit smoking and/or sharply reduced cigarette consumption by switching to e-cigarettes and/or smokeless tobacco.

The only way to further reduce tobacco disease and death is to continue reducing daily cigarette smoking and overall cigarette consumption.

Far from protecting public health, HB 428’s outrageous 53% punitive tax on these least hazardous tobacco/nicotine products would encourage some e-cigarette and smokeless tobacco consumers to switch back to far more hazardous cigarettes, while discouraging cigarette smokers in New Mexico from switching to these exponentially less hazardous smokefree alternatives.

HB 428 also would unfairly tax cigars at 53% even though cigars are also significantly less hazardous than cigarettes (as most cigar smokers don’t inhale the smoke, and most don’t smoke daily). Besides, youth consume <1% of all tobacco products, and youth cigarette smoking has sharply declined since 1998.

Since many/most e-cigarettes and premium cigars are now sold via the Internet, HB 428 would encourage many/most consumers who buy e-cigarettes and premium cigars at brick-and-mortar stores in New Mexico to buy them via the Internet to avoid paying the unwarranted 53% tax, which would generate far less tax revenue for NM than HB 428’s Fiscal Impact Report projects.

The purpose for state lawsuits and increasing cigarette taxes was to hold smokers fiscally accountable for governmental expenditures to treat cigarette diseases and disabilities. New Mexico’s $1.66/pack tax and MSA payments already reimburse the state for its expenditures to treat cigarette diseases and disabilities. If Other Tobacco Products were as hazardous and as costly for taxpayers as cigarettes, they should be taxed at a similar rate as cigarettes. But as previously delineated, OTP are far less hazardous than cigarettes and impose negligible (if any) costs upon New Mexico.

Once again, please reject HB 428.

Since I founded Smokefree Pennsylvania in 1990, we’ve advocated local, state and federal policies to reduce indoor tobacco smoke pollution, reduce tobacco marketing to youth, increase cigarette tax rates, hold cigarette companies accountable in civil courts, and in 2007 I convinced US Senator Mike Enzi to amend the FSPTCA to require graphic warnings on all cigarette packs, which is now in federal litigation.

Feel free to contact me anytime for more information or assistance.

Sincerely,

William T. Godshall, MPH
Executive Director
Smokefree Pennsylvania
1926 Monongahela Avenue
Pittsburgh, PA 15218
412-351-5880
smokefree@compuserve.com

 

[Placebo Effect]

CASAA CTA has been updated to reflect the correct e-mail address.

Three New Mexico vendors committed to making phone calls to legislators on the Tax and Revenue Committee, and one said he would attend tomorrow's meeting at 1:30 pm MST (3:30 pm Eastern)

 

[Kayte]

Really sad that it passed out of the Health Committee. I wrote to those on the committee and didn't hear back from a single person.

Wish I could be at the meeting today, but thanks to you guys, I was at least able to write.

 

[DC2]

Three New Mexico vendors committed to making phone calls to legislators on the Tax and Revenue Committee, and one said he would attend tomorrow's meeting at 1:30 pm MST (3:30 pm Eastern)

That's the ticket.

In the end, vendor involvement is the thing that can turn the tide.
Not so much because of their own involvement, but more so by rallying their customer base.

 

[Placebo Effect]

There may be positive news to report later this evening.

A CASAA member received a response from a member of the Health Committee (which already passed HB428) saying Rep. Stewart's intention was *NOT* to tax e-cigarettes.

I called Rep. Stewart's legislative aide to see if Rep. Stewart would sponsor an amendment to remove e-cigarettes. I wrote a quick amendment ("For the purposes of this section, 'tobacco product' shall not electronic cigarettes, which create a vapor in any form, and any electronic cigarette cartridges, liquid, or other accessories") and e-mailed it to her. She is now seeking Rep. Stewart's approval so that it can be introduced at the Taxation & Revenue Committee meeting at 1:30 pm MST.

The bad news is that this bill would still arbitrarily tax dissolvables and smokeless at a far higher rate than deserved, but we'll have several more opportunities to fight this.

 

[Fiamma]

Fingers crossed.

 

[Placebo Effect]

UPDATE (3/1/13): The Taxation & Revenue Committee removed the bill's modification of the definition of "tobacco products."

Therefore, e-cigarettes will not be taxed in New Mexico. Dissolvables may also not be taxed, although that may be open for interpretation.

UPDATE #2: HB482 was tabled by a vote of 8-7. This likely means that it is dead.

 

[Fiamma]

Good job to everyone who pushed Thanks for the update.

 

[Kayte]

That's great! Thanks for the update!