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PACT Act Q&A 

As tobacco product excise taxes increase, so do the prices of tobacco products. Criminal organizations exploit these increases by selling contraband or counterfeit tobacco products for their own financial gain and without regard to youth access prevention laws. This illicit activity deprives governments of tax revenue and hurts law-abiding businesses. Law enforcement groups, trade associations, health care advocates and the states have been advocating for the passage of legislation to combat illegal Internet sales of cigarettes and smokeless tobacco a number of years.

The Senate is currently considering S.1147 – the Prevent All Cigarette Trafficking Act (“PACT Act”), which would impose new restrictions on Internet cigarette and smokeless tobacco sales. This legislation will help States recover revenues at a time when they need it most, ensure appropriate age verification, and restore a level competitive environment for the law-abiding wholesalers and retailers throughout the United States who pay their taxes and play by the rules. The PACT Act is an important step in addressing the larger issue of stopping the trade of contraband tobacco.

The PACT Act is strongly supported by a broad array of advocates. Earlier this year, the House passed the PACT Act by an overwhelming bipartisan vote of 397 to 11. Since 2002, both houses have passed the PACT Act on multiple occasions.

Opposition to the PACT Act arises mainly from a few owners and operators of cigarette Internet sites – the sites that engage in the very activity that has robbed states of hundreds of millions of dollars in excise taxes and that has taken enormous business from legitimate retailers and wholesalers. Congress should reject these arguments, and do so based on a clear and accurate understanding of what the PACT Act will do for the states, for retailers and wholesalers, for law enforcement, and for the broad array of other stakeholders who strongly support it. Below are a series of questions and answers intended to clarify why the PACT Act should be enacted. [Top]

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