to meet with their state legislators regarding concerns that a change in the way smokeless tobacco is taxed could cost jobs and hurt farmers in Kentucky. They also stressed that switching from a weight-based method to a price-based system for taxing smokeless tobacco would reduce revenue to state coffers.
Robey raises dark tobacco on his farm. The biggest buyer of Kentucky dark tobacco is U.S. Smokeless Tobacco Company (USSTC), an American company with a processing facility in Hopkinsville that employs about 100 full-time workers, and more than 200 seasonal workers. USSTC, maker of the well-known brands Copenhagen and Skoal, uses 100 percent American-grown tobacco, most of which is grown by more than 500 Kentucky farm families.
According to Robey, switching to a system where smokeless tobacco is taxed by price rather than by weight would give consumers an incentive to change to cheaper-quality products. The result would be a significantly negative economic impact on the Hopkinsville plant, Kentucky smokeless tobacco farmers, and state revenues.
During the last several years, as smokeless tobacco companies have been lowering their prices, more than a dozen states have switched to a weight-based tax method. And the federal government has always taxed smokeless tobacco products by weight. Kentucky's current system provides a steady stream of millions of dollars in annual tax revenue to the state.