TOBACCO
New tobacco products
Lorillard Inc., the largest U.S. maker of menthol cigarettes, won the first two clearances to market new tobacco products among 500 requests, under authority given in 2009 to U.S. health regulators.
The Food and Drug Administration cleared two of Greensboro, N.C.-based Lorillard’s Gold Box cigarettes for sale in the United States. They are the first rulings handed down by the agency since lawmakers gave it the power to determine which current tobacco products can remain on the market and which new ones can be introduced. Lorillard rose in trading.
The FDA cleared the cigarettes through a “substantially equivalent” (SE) determination that makes a judgment as to whether products have the same characteristics as existing ones or raise new public-health questions. The agency denied four other requests for the determination, it said in a statement.
“It is important to emphasize that an SE decision does not mean that the agency considers a product to be safe,” wrote Mitch Zeller, head of the FDA’s Center for Tobacco Products, in a blog post on the agency’s website.
LEGAL
Credit union change?
Congress is looking at all tax-exempt organizations to consider whether their tax status is justified, as part of a push toward a sweeping tax-reform bill. The Credit Union National Association is on guard for possible changes in tax status.
The national association has mounted a public campaign to make its members and potential members aware of possible changes.
The credit union industry successfully has fended off previous taxation efforts that were initiated by the for-profit banking industry. For-profit banks don’t like the credit union’s competitive advantages of not paying a corporate income tax.
For credit unions, the argument is: When a defined group of people, by industry or location or other categories, come together to form a financial cooperative, they should not be taxed like a for-profit bank. Credit unions are owned by their members, not profit-seeking shareholders.
Credit union members believe they take on the same risks as bank owners and share any rewards among themselves in the form of deposit interest on which income taxes are paid. At banks, profits are paid to shareholders who may or may not be customers of the bank. Shifting credit unions to a different tax status would destroy that distinction.
Lower costs are why credit unions believe they rank as highly popular institutions in polls. The new threat of taxation is not coming from the for-profit banking industry, say Texas credit union officials.
Any momentum toward changing credit union taxation could devolve rapidly into a new credit union vs. banks war. Credit unions believe they are taxed as their members pay federal income taxes on their deposit earnings. They also say their members pay property, sales, unemployment and Social Security taxes as part of their operations.
— San Antonio Express-News