Consumer advocacy group asks legislators to close tax loophole for tobacco company

The Consumer Federation of the Southeast, a nonprofit consumer advocacy group, released a statement yesterday asking Florida lawmakers to close a tax loophole for a Florida-based tobacco company.

The group is asking legislators to consider a bill currently sponsored by state Sen. Thad Altman, R-Melbourne, which he has said would close “a big tax loophole” for Dosal, a tobacco company based in Miami that was not part of the 1997 Florida Tobacco Settlement Agreement. Dosal has been exempt from certain taxes other tobacco companies pay because it was not part of that settlement. Altman’s bill would seek fees from the company, which by law would be used by the state “to ensure the financial security of vital health and human services programs in the state.”

Health advocates have stood by the attempts to levy the tax on Dosal. The issue has created a rare situation in which both health advocates and Big Tobacco, which has backed this measure in the past, have come together in support of a law. Big Tobacco has been a big proponent of legislation like Altman’s, because the companies argue that Dosal has an unfair advantage in the marketplace.

The Consumer Federation of the Southest said in a press release yesterday that “as Florida lawmakers consider budget proposals that raid the Lawton Chiles Endowment and propose deep cuts to health care services – threatening some of the Sunshine State’s most vulnerable citizens … lawmakers [should] impose an equity fee on cigarettes made by manufacturers who do not participate in the state’s historic tobacco settlement.”

The group said in a statement that:

Depending on federal matching dollars, the fee could generate anywhere from $50 million to $200 million to help protect vital services for at-risk Floridians.

“Another year brings another challenging budget situation for Florida, and lawmakers are leaving big money on the table,” said Walter Dartland, executive director of the Consumer Federation of the Southeast. “Safety net services for sick and vulnerable Floridians sit on the chopping block. It’s time to end the favored status some cigarette makers enjoy in Tallahassee. A cigarette is a cigarette and, as responsible corporate citizens, Dosal and other non-participating cigarette makers should be willing to do their share to contribute to the well-being of our citizens.”

The group also said that “Dosal has experienced huge growth and now manufactures nearly 20 percent of cigarettes sold in Florida,” since the settlement was made that left Dosal out.

A similar bill was introduced last year, but a threat that Gov. Rick Scott would veto the bill eventually killed it.

Altman’s bill still does not have a House sponsor. It has been referred to the regulated industries, judiciary, budget and rules committees, but has not been heard in either.