Coin Machine Review (& Pacific ...)
Issue: 1947 September - Page 87
Soutb Carolina
So uth Dako t a
Ten nessee
Texas
Utah
Vermont
W'ashing\on
""est Virginia
Wisconsin
l.'nited S l a tes
r .
3
3
3
3
2
2
. 2
1
2
7
1787
1640
1660
1953
1290
2680
2250
(new)
1830
2332
Manv interesting speculations could be
made as to the whys and wherefores of
these variations in per capi ta use of cig-
arettes in the different states. Tobacco
tax authorities say that in states having
a high rate, there is a tendency to patron-
izemail order firms that have sprung up
recently to sell cigarettes. It will be no-
ticed also that only six states in the above
list have a per capita cigarette consump-
tion higher than the national rate. There
are other factors that enter to the national
rate that are not considered in estimating
rates in the various states.
With a federal tax rate of seven cents
per pack on cigarettes, it will be seen
that the product bears a pretty h eavy tax
load. For years now there has been an
increasing complaint against this overlap-
ping taxation and in time something may
be done about it.
Tn recent years some of the federal com-
mittees that have been appointed to study
various tax questions have recommended
that cigarettes be dropped from the federal
tax list and left to the states. as an ex-
elusive source of revenue. The outlook at
present, of course, shows no signs that
Congress will - drop the federal tax on
cigarettes. But the idea h as been planted
in some important tax studies and the states
may eventually demand the cigarette tax
as an exclusive field.
But while the state cigarette avalanche
has been under way, some cities have also
placed local fees on cigarettes. Kansas City
is usually given credit for starting the
idea when- it adopted a local tall< in 1938.
By t.he end of 1946 as many as 35 cities
had adopted a local cigarette tax of one
or two cents per pack. New York City is
an outstanding example, having made its
two-cent local rate a permanent law. In
1946 Kansas City and St. Louis each col-
lected more than a million dollars in local
cigarette revenue, which gives some idea
of what cities may get by taxing cigarettes.
That cigarettes can pay considerable rev-
enue into state treasuries is shown by th e
following list of states and the cigarette
revenue totals in round numbers received
for the year 1946:
Florida, $ll,lOO,OOO; Illinois, $17,200,-
000; Louisiana, $11,200,000; Massachu-
setts, $20,100,000; New York, $32,600,000 ;
Ohio, $15,500,000; Oklahoma, $8,800,000 ;
Pennsylvania, $1.9,300,000; and Texas, $19,-
900.000.
These are the top nine states in amount
of revenue received last year. Th e grand
total in 1946 received by all the states that
collected a tax on cigarettes amounted to
$236,000,000, a gain of about 45 per cen t
over the preceding year. Most of the states
issue monthly reports on revenue receipts
and they show consistent increases from
month to month. These monthly reports
are a good index to saleS and also show
variations in different territories. Since
there is a possibility th at cigarette co n-
sumption may finally reach a peak and
begin to show declines here and there, the
state revenue reports will be watched with
keener interest during the next few ' years.
The fact that cigarette taxes prove such
good revenue producers makes it difficult
for the makers and sellers of the product
to oppose the tax trend. Tobacco jobbers
and distributors are well organized in most
states, and are represented nationally in
such organizations as the National Assn.
of Tobacco Distributors, and manufacturers
of cigarettes also try to hel p delay the tide.
The best that operators of cigarette ma-
chines can do is to cooperate with the to-
hacco trade in its fight against taxes.
Because of the growing importance of
cigarette vendors, the more recent trend
in stat~ legislation is to include cigarette
machines and their operators or owners in
the statute setting up cigarette tax regu-
lations. Frequently, the question arises
about classification of the operator of cig-
arette -machines, ~hether he will be classed
as a jobber or retailer. The more recent
laws in Connecticut and Michigan show
what prablems this question may bring for
operators. For example the new Conn.
statute classes an operator who owns more
than 25 machines as a distributor and
the state license for a distributor is $150;
Michigan also imposes a flat fee .
One of the most interesting cases of
classification of operators arose under the
Wisconsin law; here they were classed as
sub-jobbers. Most of the state laws give
distributors and jobbers the authority to
affix revenue stamps and operators gain
hy being classified as ;obbers in such cases.
Many operators say they can make a profit
on the operation when the allowance for
affixing stamps is five per cent or more.
The big problem for operators, when a
new cigarette tax goes into effect or the
present tax is increased. is the price changes
made necessary. Not only maya mechan ical
problem be involved but operators must
also adjust prices in relation to prices in
chain and independent stores.
A more detailed discussion of operators'
problems and differences of opinion on
the price question may be found in the
July issue of THE REVIEW, beginning on
page 69. When Illinois increased its cig-
arette tax to three cents, so me operators
hegan to sell at · 22 cents, while there
were others who absorbed the extra tax
with the location and argued strongly for
selling at 20 cen ts.
When the Michigan tax went into effect,
operators also fa ced the price problem.
The selling price before the tax was 18
eents. With the 3-cent tax in effect the
retail price would go to ' 21 cents, which is
an awkward price for vendors. Many opera-
tors in Michigan and other states where
a similar situation arises, prefer to sell at
20 cents and absorb the tax. In some cases
the penny tax can be absorbed equally by
operator and location.
There is not much hope that operators
will be able to impress state legislatures
by the mechanical problems which taxes
on cigarettes bring to them. But operators
should be prepared to fight hi gh rates on
individual machines and to get proper
classifica tion under all statutes. In some
('ases, operators may prefer to be classed
as retailers but the veneral trend seems
1.0 be to class operators as jobbers or
distributors under cigarette tax laws.
Jud gi ng ' from legislative trends in 1945
and 1947-most state legislatures convene
every other year-the remaining eleven
states will have cigarette tax proposals in
the next legislative sessions and will likely
pass them. The trend.is to include cigarette
operators and machirtes In such statutes,
and operators in th e- states still to come
lip should be prepared.
"Electro" Produdion Up,
Sales Continuing Strong
LOS ANGELES-Production of the Elec-
tro all electric cigarette vendin g machine,
manufactured by Eastern Electric Vending
Machine Corp., is increasing every day
desoite material shortages, according to
Cliff Blake who has just returned from a
trip to New Yark where he got a first-hand
view of the production and delivery picture.
Blake, president of Blake Sales Co., Pa-
cific Coast distributor of the Electro, states
that his company and the manufacturer are
confi dent that within a few months their
tremendous backlog of orders will be
sharply reduced. Shipments are said to be
arriving daily in the West Coast territory.
"Our electric cigarette vendors have
proved their worth ," Blake comments. "The
large volume of orders we have placed for
this equipment is ample evidence that
operators everywhere find the publi c and
location owners enthusiastic about a ma-
chine which dispenses cigarettes with th e
unfailing operation and lack of effort that
characterizes the Electro.
"When this machine was first an-
nounced," Blake remarks, "it was regarded
with' some skepti cism, but trial orders soon
convinced the most unbelieving that here is
a machine miles ahead of th e old type
manually operated vendor."
PACIFIC COAST HEADQUARTERS
FOR
TELECOIN CORPORA nON
LAUNl>rERETUS
COIN· OPERATED BENDIX LAU NDRY EQUIPMENT
T~UECOIN C O!N·OPERATE D RADIOS
PACI FIC TELECOIN CORP.
For Northern Calif .• Oregon. W ash. :
For Sou th e rn Calif. and Arizona :
35 Po lk Street
San Frand sco 2. Calif.
Phone MArket 1·5656
1.0.3 Ang eles 4, Calif.
P~one NOrmandy 9036
422 1 Beverly Blvd.
87
FOR'
SEPTEMBER
1947
So uth Dako t a
Ten nessee
Texas
Utah
Vermont
W'ashing\on
""est Virginia
Wisconsin
l.'nited S l a tes
r .
3
3
3
3
2
2
. 2
1
2
7
1787
1640
1660
1953
1290
2680
2250
(new)
1830
2332
Manv interesting speculations could be
made as to the whys and wherefores of
these variations in per capi ta use of cig-
arettes in the different states. Tobacco
tax authorities say that in states having
a high rate, there is a tendency to patron-
izemail order firms that have sprung up
recently to sell cigarettes. It will be no-
ticed also that only six states in the above
list have a per capita cigarette consump-
tion higher than the national rate. There
are other factors that enter to the national
rate that are not considered in estimating
rates in the various states.
With a federal tax rate of seven cents
per pack on cigarettes, it will be seen
that the product bears a pretty h eavy tax
load. For years now there has been an
increasing complaint against this overlap-
ping taxation and in time something may
be done about it.
Tn recent years some of the federal com-
mittees that have been appointed to study
various tax questions have recommended
that cigarettes be dropped from the federal
tax list and left to the states. as an ex-
elusive source of revenue. The outlook at
present, of course, shows no signs that
Congress will - drop the federal tax on
cigarettes. But the idea h as been planted
in some important tax studies and the states
may eventually demand the cigarette tax
as an exclusive field.
But while the state cigarette avalanche
has been under way, some cities have also
placed local fees on cigarettes. Kansas City
is usually given credit for starting the
idea when- it adopted a local tall< in 1938.
By t.he end of 1946 as many as 35 cities
had adopted a local cigarette tax of one
or two cents per pack. New York City is
an outstanding example, having made its
two-cent local rate a permanent law. In
1946 Kansas City and St. Louis each col-
lected more than a million dollars in local
cigarette revenue, which gives some idea
of what cities may get by taxing cigarettes.
That cigarettes can pay considerable rev-
enue into state treasuries is shown by th e
following list of states and the cigarette
revenue totals in round numbers received
for the year 1946:
Florida, $ll,lOO,OOO; Illinois, $17,200,-
000; Louisiana, $11,200,000; Massachu-
setts, $20,100,000; New York, $32,600,000 ;
Ohio, $15,500,000; Oklahoma, $8,800,000 ;
Pennsylvania, $1.9,300,000; and Texas, $19,-
900.000.
These are the top nine states in amount
of revenue received last year. Th e grand
total in 1946 received by all the states that
collected a tax on cigarettes amounted to
$236,000,000, a gain of about 45 per cen t
over the preceding year. Most of the states
issue monthly reports on revenue receipts
and they show consistent increases from
month to month. These monthly reports
are a good index to saleS and also show
variations in different territories. Since
there is a possibility th at cigarette co n-
sumption may finally reach a peak and
begin to show declines here and there, the
state revenue reports will be watched with
keener interest during the next few ' years.
The fact that cigarette taxes prove such
good revenue producers makes it difficult
for the makers and sellers of the product
to oppose the tax trend. Tobacco jobbers
and distributors are well organized in most
states, and are represented nationally in
such organizations as the National Assn.
of Tobacco Distributors, and manufacturers
of cigarettes also try to hel p delay the tide.
The best that operators of cigarette ma-
chines can do is to cooperate with the to-
hacco trade in its fight against taxes.
Because of the growing importance of
cigarette vendors, the more recent trend
in stat~ legislation is to include cigarette
machines and their operators or owners in
the statute setting up cigarette tax regu-
lations. Frequently, the question arises
about classification of the operator of cig-
arette -machines, ~hether he will be classed
as a jobber or retailer. The more recent
laws in Connecticut and Michigan show
what prablems this question may bring for
operators. For example the new Conn.
statute classes an operator who owns more
than 25 machines as a distributor and
the state license for a distributor is $150;
Michigan also imposes a flat fee .
One of the most interesting cases of
classification of operators arose under the
Wisconsin law; here they were classed as
sub-jobbers. Most of the state laws give
distributors and jobbers the authority to
affix revenue stamps and operators gain
hy being classified as ;obbers in such cases.
Many operators say they can make a profit
on the operation when the allowance for
affixing stamps is five per cent or more.
The big problem for operators, when a
new cigarette tax goes into effect or the
present tax is increased. is the price changes
made necessary. Not only maya mechan ical
problem be involved but operators must
also adjust prices in relation to prices in
chain and independent stores.
A more detailed discussion of operators'
problems and differences of opinion on
the price question may be found in the
July issue of THE REVIEW, beginning on
page 69. When Illinois increased its cig-
arette tax to three cents, so me operators
hegan to sell at · 22 cents, while there
were others who absorbed the extra tax
with the location and argued strongly for
selling at 20 cen ts.
When the Michigan tax went into effect,
operators also fa ced the price problem.
The selling price before the tax was 18
eents. With the 3-cent tax in effect the
retail price would go to ' 21 cents, which is
an awkward price for vendors. Many opera-
tors in Michigan and other states where
a similar situation arises, prefer to sell at
20 cents and absorb the tax. In some cases
the penny tax can be absorbed equally by
operator and location.
There is not much hope that operators
will be able to impress state legislatures
by the mechanical problems which taxes
on cigarettes bring to them. But operators
should be prepared to fight hi gh rates on
individual machines and to get proper
classifica tion under all statutes. In some
('ases, operators may prefer to be classed
as retailers but the veneral trend seems
1.0 be to class operators as jobbers or
distributors under cigarette tax laws.
Jud gi ng ' from legislative trends in 1945
and 1947-most state legislatures convene
every other year-the remaining eleven
states will have cigarette tax proposals in
the next legislative sessions and will likely
pass them. The trend.is to include cigarette
operators and machirtes In such statutes,
and operators in th e- states still to come
lip should be prepared.
"Electro" Produdion Up,
Sales Continuing Strong
LOS ANGELES-Production of the Elec-
tro all electric cigarette vendin g machine,
manufactured by Eastern Electric Vending
Machine Corp., is increasing every day
desoite material shortages, according to
Cliff Blake who has just returned from a
trip to New Yark where he got a first-hand
view of the production and delivery picture.
Blake, president of Blake Sales Co., Pa-
cific Coast distributor of the Electro, states
that his company and the manufacturer are
confi dent that within a few months their
tremendous backlog of orders will be
sharply reduced. Shipments are said to be
arriving daily in the West Coast territory.
"Our electric cigarette vendors have
proved their worth ," Blake comments. "The
large volume of orders we have placed for
this equipment is ample evidence that
operators everywhere find the publi c and
location owners enthusiastic about a ma-
chine which dispenses cigarettes with th e
unfailing operation and lack of effort that
characterizes the Electro.
"When this machine was first an-
nounced," Blake remarks, "it was regarded
with' some skepti cism, but trial orders soon
convinced the most unbelieving that here is
a machine miles ahead of th e old type
manually operated vendor."
PACIFIC COAST HEADQUARTERS
FOR
TELECOIN CORPORA nON
LAUNl>rERETUS
COIN· OPERATED BENDIX LAU NDRY EQUIPMENT
T~UECOIN C O!N·OPERATE D RADIOS
PACI FIC TELECOIN CORP.
For Northern Calif .• Oregon. W ash. :
For Sou th e rn Calif. and Arizona :
35 Po lk Street
San Frand sco 2. Calif.
Phone MArket 1·5656
1.0.3 Ang eles 4, Calif.
P~one NOrmandy 9036
422 1 Beverly Blvd.
87
FOR'
SEPTEMBER
1947
Future scanning projects are planned by the International Arcade Museum Library (IAML).