Donation of the Month

Tobacco Tax Reports
1976.491.2
Donor: Tom Richards
 
 
Taxes on tobacco and tobacco products have been around almost as long as tobacco has been grown in the United States.  Taxes on goods have been a long standing way for governments to raise revenue and pay down war debts.  Great Britain tried the idea first with her colonies, but here in America it was a short lived venture. Taxes on tobacco have been tried twice by the United States government, and since the second instance in 1862 they have remained.
 
Tobacco growing and selling has been a large part of the United States economy and to that end taxes on the selling of the product has been around a long time.  The first tax on tobacco was enacted in 1794, but was quickly repealed.  In 1862, rising war debts caused the government to enact taxes on several items including tobacco.  All but the tobacco tax was repealed after the war, and by 1868 tobacco tax revenues were the main source of government income.  It remained exclusively a Federal tax until 1921 when Iowa became the first state to issue a state tax on tobacco.  By 1969 every state had tax on tobacco.  A few cities even have added their own tax, causing tobacco to be one of the highest taxed products.
 
In Arkansas, the state tax is $1.15 per pack, or for those who buy in bulk $11.50 a carton.  This tax is on top of the Federal tax of $1.01.  Due to state tobacco tax coupled with the large amount of tobacco sales, the state of Arkansas received $171,038 thousand in tobacco tax revenue in 2009.
 
To report the revenue for sale of tobacco products each cigarette carton or individual pack has a stamp.  These small stickers provide proof of purchase and include the state in which they were issued.  Through the wonders of technology all this information is fed to the state and Federal governments; however, in 1937 a monthly report of number of cigarettes purchased and number of stamps purchased needed to be written out and a copy sent off to the Department of Revenues.  Shown here are examples of the November 1937 report by the J.O. Rand Wholesale Grocery Company.
 
While the method of tracking taxes has changed the necessity of paying them hasn’t.  Each state, city and the Federal government relies on those taxes to pay for other projects; so as much as we bemoan paying them they are here to stay.