BOWLING GREEN, Ky., Oct. 9 /PRNewswire/ -- Commonwealth Brands, Inc. has today joined with The Corr-Williams Company, a Mississippi tobacco and grocery wholesale distributor, in filing an action in Mississippi state court challenging a recently enacted amendment to the Mississippi tobacco tax law. The challenged portion of the law imposes a tax on cigarettes manufactured by companies, such as Commonwealth Brands, that are not parties to a Tobacco Settlement Agreement with Mississippi. The tax is applied not only to cigarettes sold in Mississippi, but also to cigarettes held by Mississippi distributors for shipment into retail stores in other states.
Commonwealth Brands maintains that the legislation, as passed in the 2009 legislative session, violates the US Constitution by imposing an unfair burden on tobacco products in interstate commerce. The new law threatens jobs in Mississippi by penalizing those manufacturers and distributors who choose to use Mississippi-based facilities to distribute cigarettes for retail sales in other states. The action does not challenge the fee insofar as it is imposed on cigarette sales in Mississippi.
Jonathan Cox, CEO and President of Commonwealth Brands, Inc. said:
"Commonwealth Brands believes that the tax unfairly burdens sales outside Mississippi. Approximately 80% of the cigarettes Commonwealth Brands ships to Mississippi distributors are actually destined for retail sales in other states. The new tax applies to these out of state sales even though the products will only be held in Mississippi for a short period and will never be sold by a Mississippi retail establishment."
"The Mississippi legislature overstepped its authority when it imposed a Mississippi tax on cigarettes sold to consumers in other states and penalized Mississippi-based distributors and the tobacco manufacturers who use them."
Steve Carmody, Legal Counsel for the Corr-Williams Company said:
"The Corr-Williams Company is a Mississippi based distribution company that has been doing business in the State of Mississippi for over 108 years. Corr-Williams employs over 150 employees and pays millions of dollars in state tobacco taxes each year. The new law severely impairs Corr-Williams' ability to operate and conduct business as a Mississippi corporation in other states."
Commonwealth Brands, Inc. is the fourth largest tobacco manufacturer in the United States. Its cigarettes include Davidoff, Sonoma, Montclair and USA Gold, one of the nation's best selling brands*. Its portfolio of fine tobaccos consists of the Premier, McClintock, Rave and Bali Shag brands. The Company also manufactures a range of tobacco related products, which include Premier, Rizla, and El Rey cigarette tubes and E-Z Wider and Joker cigarette papers. Commonwealth Brands, Inc. is based in Bowling Green, Kentucky, and employs over 900 people across 50 States. The Company is committed to its employees, its brands and its consumers.
*Source: Management Science Associates, Inc.
SOURCE Commonwealth Brands, Inc.
Commonwealth Brands, Inc.
