AN ACT TO AMEND SECTION 75-23-5, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF THE TERM "COST TO WHOLESALER" UNDER THE UNFAIR CIGARETTE SALES LAW TO PHASE IN AN INCREASE IN THE PRESUMED COST OF DOING BUSINESS BY THE WHOLESALER; TO REVISE THE DEFINITION OF THE TERM "COST TO THE RETAILER" UNDER THE UNFAIR CIGARETTE SALES LAW TO PHASE IN AN INCREASE IN THE PRESUMED COST OF DOING BUSINESS BY THE RETAILER; AND FOR RELATED PURPOSES.
HB 1688 amends Mississippi’s Unfair Cigarette Sales Law, specifically the definitions of “cost to wholesaler” and “cost to retailer” in Section 75-23-5 of the Mississippi Code. The bill does not change the basic framework of the law, which is designed to prevent cigarette sales below cost, but it does change the presumed cost of doing business used to calculate minimum lawful prices.
Under the bill, the presumed markup for wholesalers would increase in stages from 2% to 3% beginning July 1, 2026, then to 4% beginning July 1, 2027, and to 5% beginning July 1, 2028. For retailers, the presumed markup would increase from 6% to 8%, then 10%, and finally 12% on the same schedule. The bill also retains the existing cartage presumption for wholesalers and keeps the ability for businesses to prove a different actual cost of doing business.
The practical effect is to raise the statutory floor for cigarette pricing over time, making it harder for wholesalers and retailers to sell cigarettes at very low margins or below the presumed cost thresholds. This would affect cigarette wholesalers, retailers, vending machine operators, and the Department of Revenue, which administers the law. Because the bill amends an existing pricing and anti-discount statute, it would likely influence competitive pricing practices in the cigarette market and enforcement of unfair sales provisions.
The available context shows no recorded committee discussion or votes, so there is no documented public debate in the provided materials. Based on the bill’s substance, the likely policy sentiment is supportive of stronger minimum-price protections for cigarette sellers and against predatory pricing, but the bill could also draw concern from retailers and wholesalers who may face higher compliance costs or reduced pricing flexibility. The main point of contention is the phased increase in presumed business costs, which effectively raises minimum cigarette prices and may be viewed as either a fair adjustment to operating costs or an artificial price floor that benefits established sellers.
HB 1688 would amend Section 75-23-5 of the Mississippi Code, changing the statutory presumptions used to calculate the “cost to wholesaler” and “cost to retailer” under the Unfair Cigarette Sales Law. The bill phases in higher presumed operating-cost percentages for both wholesalers and retailers, which would increase the minimum lawful price at which cigarettes may be sold unless a seller proves a different actual cost. It would affect cigarette wholesalers, retailers, vending machine operators, and enforcement by the Department of Revenue, while leaving the overall anti-below-cost sales structure intact.
No committee transcripts or votes were provided, so there is no direct record of legislative debate or formal support/opposition in the materials. The bill’s structure suggests a generally pro-regulation, pro-minimum-price approach, likely intended to strengthen enforcement of the Unfair Cigarette Sales Law. At the same time, the phased increases may be viewed negatively by some in the cigarette distribution and retail sectors because they reduce pricing flexibility and could raise consumer prices.
The main contention is the bill’s staged increase in the presumed cost of doing business for cigarette wholesalers and retailers. Supporters would likely argue that the higher presumptions better reflect real operating costs and help prevent unfair below-cost sales, while opponents may argue that the bill artificially raises cigarette prices, burdens small retailers and wholesalers, and could reduce competitiveness. Another possible point of concern is that the bill changes the default presumptions without changing the underlying ability to prove actual costs, which may still leave businesses disputing how the law is applied in practice.