XT 2002-06 - New Product Subject to the Other Tobacco
Products Tax and Restrictions on Cigarette Sales and
Packaging - September 3, 2002
New Product. There is a new product being
distributed in Ohio that is made from 100 percent tobacco and
is the form of a mint. The name of this product is "Ariva."
This product and any similar products are subject to the Ohio
other tobacco products tax at the rate of 17 percent of the
wholesale price.
Cigarette Sales Restriction. Tobacco product
distributors have reported sales in Ohio of the Kentucky
Blonde brand of cigarettes manufactured by Red Hawk Tobacco
Company. The Franklin County Court of Common Pleas has issued
a consent decree resolving a lawsuit between the Ohio
Attorney General's Office and Red Hawk Tobacco Company. The
lawsuit involved sales of Red Hawk's cigarettes and its
corresponding cigarette master settlement agreement escrow
obligations. Under the consent decree, Red Hawk is prohibited
from selling Kentucky Blonde, or any other brand of cigarette
it may distribute and/or manufacture, within the state of
Ohio, either directly or through a distributor, retailer, or
other intermediary, until June 26, 2004. Further, Red Hawk is
not permitted to sell cigarettes in Ohio, either directly or
through any intermediaries, after June 26, 2004, unless it
notifies the Ohio Attorney General's Office of its intent to
manufacture and/or distribute its products in Ohio and pays
all of its past, present, and then-owing escrow obligations.
Packaging Restriction. Amended Substitute
Senate Bill 242, 124th General Assembly, places
new restrictions on the packaging of cigarettes and
roll-your-own tobacco. Effective September 19, 2002, it will
be unlawful for anyone to manufacture, sell, or distribute in
Ohio any pack or other container of cigarettes containing
fewer than twenty cigarettes or any packages of roll-your-own
tobacco containing less than six-tenths of one ounce of
tobacco. It will also be unlawful to sell cigarettes in a
smaller quantity than the pack or container they were placed
in by the manufacturer. The package container limitations are
in Section 2927.02 (B) (4) and (5) of the Ohio Revised Code.
Violators may be charged with a fourth degree misdemeanor for
the first offense and a third degree misdemeanor for
subsequent offenses. These provisions are enforced by local
law enforcement departments.
Please contact us if you have any questions.
Ohio Department of Taxation
Fuel Use and Excise Tax Unit
P.O. Box 530
Columbus, Ohio 43216-0530
Telephone: (614) 466-3410
Fax: (614) 752-8644
Web site: http://tax.ohio.gov/