Tobacco groups sue to block new state cigarette taxes
July 31, 2012 2:36AM
Two tobacco-industry trade groups are suing to block recent changes to Illinois’ cigarette tax, signed into law in June to help plug a $2.7 billion hole in the state’s ailing Medicaid program.
The Cigar Association of America and the National Association of Tobacco Outlets, along with north suburban Northbrook’s Arango Cigar Co., filed the suit Monday in Cook County Circuit Court.
They claim the new definition of “cigarette” in the laws — especially as it relates to so-called “little cigars” — is so “unconstitutionally vague” that it leaves storeowners at risk of seeing their products seized if they incorrectly guess whether certain products are taxable.
Other sellers who do comply could end up overpaying, by affixing 20-cigarette tax stamps to packages containing as few as two “little cigars,” the suit argues.
The package Gov. Pat Quinn enacted in June includes a $1-a-pack increase in cigarettes that and a $1.6 billion series of cuts to Medicaid programs, all meant to save the state’s health care program for the poor, elderly and disabled “from the brink of collapse,” as Quinn put it.
In addition to cigarettes, the legislation increased the tax on packs of “roll-your-own” cigarettes, “little cigars” and moist snuff from 18 percent to 36 percent of the product’s price.
The Washington, D.C.-based Cigar Association, and Minneapolis-based National Association of Tobacco Outlets say they filed suit because the new laws will affect their member businesses in Illinois who have until August 1 to comply.
The five-count suit seeks an injunction that rolls back the recent changes to the state’s cigarette tax laws, and prohibits enforcing them against storeowners.