Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-09-15
j. s. WILL TAX ALL
TYPES Of TOBACCO
Processing Levy to Finance
Campaign for Higher
Prices to Growers.
BY the Associated Press.


With the approval of President Roose-
welt, the Federal Farm Administration
last night announced that processing
taxes will be levied on virtually every
type of tobacco, effective October /. The
new taxes will finance the campaign for
higher prices to growers.
Regulations applying levies on cigar
leaf, f1ue-cured, Maryland hurley. fire.
cured and dark air-cured tobaccos were
approved personally by the President
before being announced by the Farm
Administration.
Each type of tobacco Is assessed on
the basis Of its farm sales weight. There
is a higher rate for each type, I'M
, stemmed when processed to allow for
loss OF moisture from the time it left
the growers hands and a still higher
tax on stemmed tobacco at the time Of
processing.
Tax Rates Announced.
In addition, conversion factors to
arrive at the tax on manufactured to-
baccos, or floor stocks were fixed. Re-
tailers are allowed 80 days after Octo-
Der l to dispose If stocks on hand and
after that the levy applies to them also
II the tax on their goods has not al
ready been paid elsewhere.
The tax rates for the various types
are: Cigar leaf, 3 cents pound farm
sales weight: unStemmed, 3.75, and
stemmed, cents pound Maryland,
IL, l8 and "a; hurley. 2, % and 81;
fire-cured, 90, 80 and Al; dark air
cured 3.3. 3.8 and 81; flue-cured, ~.
Al and 6.1
Theoretically. the tax is the differ
ence between the parity price and the
market price of the particular type of
tobacco. Parity price, as defined by
the farm adjustment act. is the price
at which tobacco must sell to have the
purchasing power it had on the av-
erage IN the period between 1919 and
1929.
In the case of cigar leaf tobacco, the
announcement said, however, the full
difference between market and parity
prices had not been applied because a
higher rate might result in accumula-
ton OF surplus stocks and consequent
depression of farm prices of the cigar
leaf
On the other kinds of tobacco the
tax is about the difference between its
selling price and parity, or the fair
exchange value"
All domestic and foreign-g grown kinds
OF tobacco when proceSsed into the
production of cigars, cheroots, stoeies
and scrap chewing tobacco" are de-
fined in the regulations as cigar-leaf
tobaccos
Foreign grown tobaccos other than
cigar leaf when processed into cigar
cites, smoking tobacco, chewing to-
bacco or snuff are defined as f1ue-cure
for tax purpose.
The tax must be returned, however,
on any tobaccos that are exported, and
approximately 60 per cent of fue-cured
is sent abroad.
In arriving at the tax on tobacco
already manufactured the Farm Admin
lstration decided that the actual weight
OF 1000 cigars. stogies or cheroots
should be us pounds for the purposes
OF fund collection
Conversion Factor Fixed.
This is multiplied by LAT to arrive
at the farm sales weight" the result
bein; approximately 20 pounds, on
which tax of cents, the farm sales
weight processing tax on cigar leaf,
would be collected
The actual weight of 1000 small
cigars was determined to be 275 pounds.
The conversion factor for scrap
chewing and smoking tobacco was fixed
at Ito for each 1000 cigarettes. The
AoeCoi 10 100 pei ceIlt OI Cne per pOunQ
processing tax on f1ue- cured; for each
pound of granulated smoking tobacco
30 per cent Of the per pound processing
tax on fue-cured; for smoking tobacco
other than granulated, SO per cent of
the per pound processing tax on hurley;
for each pound Of chewing tobacco
other than plug. 81 per cent Of the per
pound processing tax on dark air-cured.
The conversion factor for each pound
OF snuff is 102 per cent of the per
pound processing tax on fire-cured,