PA Senate Bill Introduced To Increase Minimum Margin On Cigarette Sales


A bill (SB 837) that would significantly change the cigarette pricing system in Pennsylvania has been introduced in the state Senate. Entitled the Small Convenience Store Protection Act, the bill would increase the presumed cost of doing business by retailers (for cigarettes) from the current 7% to the following:

Section 234-A. Presumed Cost of Doing Business By Retailer.–The presumed cost of doing business by a retailer making the sale shall be the following per centum:
(1) Beginning July 1, 2023, through December 31, 2023, nine per centum.
(2) Beginning January 1, 2024, through December 31, 2024, ten per centum.
(3) Beginning January 1, 2025, through December 31, 2025, eleven per centum.
(4) Beginning January 1, 2026, and thereafter, twelve per centum. Section 3. This act shall take effect immediately.

The legislation -introduced by Senator Flynn (D-Lackawanna)- has been referred to the Senate Finance Committee. In his co-sponsorship memo, the Senator cited the negative impact COVID had on small convenience stores and also the continuing impact felt from previous general tobacco tax increases. The measure has engendered some early opposition, with some segments of the industry arguing that the plan would increase the price of cigarettes to consumers. As of this writing, the future of the bill is unclear.