Most firms shell out on new cig tax

A majority of the 20 companies billed for a new cigarette tax have paid.
Responding to a lawsuit, Hinds County Chancery Court Judge Patricia Wise issued a temporary restraining order in the case last month, preventing the state from collecting the tax.
The tax - which is typically 20 cents a pack - was due in mid-October. It's applied to cigarettes warehoused in Mississippi for sale in other states.
The state billed 20 manufacturers $537,499. Sixteen manufacturers paid a total of nearly $282,687, said Kathy Waterbury, spokeswoman for the state Tax Commission.
In a lawsuit, The Corr-Williams Co., a Pearl-based distributor, and Commonwealth Brands, a Bowling Green, Ky.-based cigarette manufacturer, are challenging the constitutionality of the state taxing goods for sale in other states.
This tax only applies to cigarette manufactures not included in the state's 1997 tobacco settlement.
The lawsuit does not involve cigarettes that are sold in the state.
Commonwealth paid the $56,000 tax bill in protest, said Rob Wilkey, the company's attorney. The company has said that about 80 percent of the cigarettes it sends to Mississippi are destined for sale in other states.
The temporary restraining order remains in effect until Tuesday, the day of the next hearing.
For bills due this month, manufacturers have been billed $458,701, Waterbury said.
In granting the order, Wise wrote the harm in this case would be greater for Corr-Williams than the state, "even considering the present economic condition of the State of Mississippi and the potential implications of up to $590,000 a month in reduced revenues," the order might cause to the state's budget.
The judge also said there might be a loss of jobs and tax revenue if distributors such as Corr-Williams leave or move part of their operations out of the state.
The state began assessing the 1.25-cent per cigarette tax in July. The first payments were due last month.
Commonwealth describes itself as the fourth largest cigarette manufacturer in the country. Its brands include Premier, McClintock and Rave, among several others.
In its effort to get state tax nixed, Commonwealth argues that it's being taxed twice if Mississippi is allowed to institute the tax against the non-settling manufacturers. The company voluntarily joined a settlement agreement with 46 other states, With that agreement, Commonwealth pays taxes based - in part - on its cigarette sales, including those in Mississippi.
The Corr-Williams Co. has argued that the additional tax would add to the price of its products, making it less competitive in the marketplace.