Big Tobacco Wins, Texas Constitution Loses
The Legislature has passed House Bill 3536, forcing small tobacco companies to pay the penalties that big tobacco companies have paid since the 1998 Texas Tobacco Settlement. That case found that Philip Morris, R.J. Reynolds and Lorillard Tobacco Company were misrepresenting and manipulating nicotine content, advertising to minors, and lying about their knowledge of tobacco's effects. Equalizing these penalties gives Big Tobacco an undeserved sales advantage by raising all cigarette prices in the state.
You don't have to be a fan of tobacco to understand that this is wrong. A company not involved in a lawsuit settlement should not have to pay the penalties of companies that are involved. That's common sense. The bill now threatens to put small tobacco companies out of business in Texas because they can't afford to pay the penalties dealt out to the big companies. Many tobacco stores that rely heavily on small tobacco sales may have to close their doors. Jeff Cotton, owner of three such stores in East Texas, told me, "This bill could possibly put me out of business. And I don't think it's fair."
The bill blatantly violates the Texas Constitution. The Equal and Uniform Clause requires reasons other than nature of the business to impose different taxes on the same kind of business. The Texas Tobacco Settlement clearly meets the "other" reason requirement. Former Texas Supreme Court Justice Craig Enoch testified in August: "Because a statute that would only tax tobacco manufacturers that were not parties to the Texas Tobacco Settlement (while exempting those that were part of the settlement) has no reasonable basis in the nature of the business and does not apply equally across all members of the class of tobacco manufacturers, it must be rejected as unconstitutional."
More at http://www.burntorangereport.com/diary/13580/big-tobacco-wins-texas-constitution-loses .
