The tobacco industry’s bid to secure billions in state and federal tax breaks in a deal to avoid losing its competitive position in the black market is in its final stages, as the U.S. House of Representatives is poised to approve legislation that could bring back some of the tax breaks it took in 2013.
In a statement, the industry said it’s working hard to get the tax break, but there are concerns the legislation will not provide enough relief to the industry.
The House of Representative is expected to vote Thursday on the legislation, which would add $500 billion to the tax bills, but the bill faces an uphill battle in the Senate.
Democrats in the chamber are expected to oppose the legislation.
Under the legislation being considered by the House, cigarette makers would get a $500 tax break if they can demonstrate that they can make a product in the United States that’s produced using a single tobacco plant and that’s sold in that country for at least $500 per pack.
That’s up from the $250 tax break the industry has enjoyed under the 2013 legislation.
The tax breaks would expire in 2025.
If passed, the bill would bring back an estimated $9 billion to $12 billion in tax breaks that expired last year.
The tobacco industry, which has lost nearly a quarter of its market share since the repeal of the cigarette tax, has been seeking to preserve its competitive advantage in the American marketplace by pursuing a series of strategies to avoid being forced to close its plants.
The U.K. and Canada, for example, both have their own tobacco companies.
The U. S. and Japan, where the industry’s profits have been growing, have been considering a similar tax deal, but it hasn’t materialized.
The European Union has been the only major economy where the cigarette industry has a competitive advantage.
The bill also seeks to bring back a tax break for small manufacturers of tobacco, such as pipe makers, but that has been blocked by a U.N. trade agency.
The American Tobacco Institute, which represents tobacco makers in the country, said Thursday it’s not certain the legislation would pass.
The group also said it is concerned that some tax breaks could be eliminated.
The industry is also trying to negotiate a $1.2 billion tax break it received last year from the U to offset costs associated with the repeal.