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5/18/2017 Rep. Phillips bill would create 15 percent markup for cigarettes to even playing field for retailers
STATE HOUSE — Rep. Robert D. Phillips (D-Dist. 51, Woonsocket, Cumberland) has introduced legislation that would improve fair sales practices in the selling of cigarettes by mandating a price markup to the total retail cost of cigarettes.

A minimum markup law is a general trade practice regulation that prohibits businesses from selling merchandise to customers at prices less than what it cost them. The law’s intent is to protect small business owners from large corporate retailers who want to enter an area and compete for business.

The legislation (2017-H 5506) would amend the existing Unfair Sales Practices law, which currently mandates a 6 percent markup on all retail costs, by requiring a 15 percent markup in the sale of cigarettes.

“This legislation is an advantage to small businesses,” said Representative Phillips. “It protects them from large businesses because they don’t have the scale that the larger retailers do. In the sale of cigarettes, just the fees for accepting a debit card can wipe out any profits a retailer makes, and that’s unfair.”

Most states with minimum price laws also require the addition of a minimum percentage markup by the cigarette retailer. The minimum percentage by which states require a markup on the retail price of cigarettes ranges from 6 percent in six states (Alaska, Louisiana, Mississippi, Oklahoma, Pennsylvania, and Wisconsin) to 25 percent in Massachusetts.

The legislation, which is cosponsored by Representatives Michael A. Morin (D-Dist. 49, Woonsocket), Arthur J. Corvese (D-Dist. 55, North Providence), Samuel A. Azzinaro (D-Dist. 37, Westerly) and Gregory J. Costantino (D-Dist. 44, Lincoln, Smithfield, Johnston), has been referred to the House Finance Committee. Similar legislation (2017-S 0470) has been introduced in the Senate by Sen. Frank S. Lombardo III (D-Dist. 25, Johnston).

For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903