Tobacco Documents Online

PHILIIP MORRIS U.S.A. ~ECEtYEp ' INTER - OFFICE CORRESPONDENCE 100 Park Avrenue, New York, N.Y. 10017 UT To: Mr. J. P. Jeb Lee From: M. W. Murphy Subject: FLORIDA TAX STAMPING Date:: October 2(?; 41978 I have been advised that last week a representative from a Florida legislative committee visited an official of a public warehouse in Jacksonville to discuss the possibility of state personnel tax stamping cigarettes at this location. According to Mr. Tom Duke, President of the Laney & Duke Ware- house in Jacksonville, the legislative aide who visited him was seeking approval to allow the state to place four or five meters within his warehouse and stamp all cigarettes which would be shipped from this location. As explained by the aide, the state's motive in undertaking this activity would be to ultimately eliminate the payment of any discount to stamping wholesalers. The legislative aide reiterated to Mr. Duke the state's contention that they could perform this function cheaper than it is now being done. (In 1977, Florida paid out nearly $4,000,000 to wholesalers in stamping discounts.) The aide informed Mr. Duke that his warehouse had been select- ed as a test-site for this activity since it was the closest facility to state offices in Tallahassee and would thus allow for easier monitoring and control. If the results of this pilot program at Laney & Duke warehouse were deemed success- ful by the state, the aide said that this activity would thereafter be expanded to all public warehouses within Florida. Mr. Duke advised the aide that he would be opposed to the state initiating!a stamping operation within his warehouse for a number of reasons: * he would be reluctant to lease warehouse space to the state to conduct stamping. * he would not want to be liable for any claims which might arise due to loss or damage to cigarettes during stamping. If the state were to stamp cigarettes, they would first have to buy them. * due to potential labor problems, he would only allow union help to work in his warehouse. State personnel are not unionized.

-2- Mr. Duke attempted to dissuade the legislative aide from pursuing this matter further by explaining some of the logistical problems inherent in such a proposal. Mr. Duke advised the aide that a significant portion of his shipments are to out-of-state whole- salers. Further, his warehouse does not house all brands from all of the manufacturers. Mr. Duke subsequently received a phone call from this same leg- islative aide inquiring if Mr. Duke would like to assume respon- sibility for stamping. Mr. Duke's reply was that he was more opposed to this proposal than he was to the State's initial idea. Mr. Duke advised me, in confidence, that he was thoroughly opposed to any attempts by the state to make inroads in this area and would actively lobby against such proposals with fellow warehouse- men in Florida. MWM:md cc: A. Bissmeyer H. Coleman R. Cremin E. Grefe A. Holtzman J. Morgan R. E. Pruehsner ~ ~- -~~--~~~