Board approves tobacco retail license fee increase

March 15, 2019

The Board of Commissioners approved an increase in the county’s annual tobacco retail license fee March 14, the first increase since the program went into effect in 2016.

Beginning July 1, 2019, the fee will rise $103, to $683 per license. The increase allows the county’s Tobacco Control and Prevention program to continue operating at the current level.

Public Health Director Rachael Banks asks Board of Commissioners to support tobacco retail oversight with increased license fee.

“Before the tobacco retail licensing, we had no way to track who was selling tobacco in our community. We had one of the highest rates of illegal sales to minors in Oregon and nationally,” Chair Deborah Kafoury said Thursday. “This allows us to provide education, to do inspection, trainings, compliance… Illegal sales to kids are down significantly, and that’s exactly the outcome we were looking for.”

Illegal tobacco sales

Youth advocates and public health experts in Multnomah County began advocating for a retail license program in 2015. At the time, the rate of illegal sales of tobacco to minors in Multnomah County was triple the national rate according to studies by the U.S. Substance Abuse and Mental Health Services Administration.  

Federal compliance checks the year before had found nearly one-in-three stores in Multnomah County illegally sold cigarettes to youth under 18. A study of 411 retail stores in Multnomah County described a landscape where tobacco was heavily advertised, discounted, and sometimes sold illegally, to boost sales to minors.

Yet Oregon, unlike most states, had no tobacco retail licensing. And without knowing where tobacco and nicotine products were sold, Oregon counties couldn’t systematically hold businesses accountable for illegal sales to minors. Most counties had no retail licensing program of their own; and those that did charged only a nominal fee that didn’t cover the cost of enforcing the law.

In 2015, the Multnomah County Board of Commissioners held six public meetings and convened a Tobacco Retail Licensing Committee that included vendors who sold tobacco. The county considered establishing a graduated fee for the license, based on sales volume. But such a fee could be considered a tax, they learned, and Oregon law preempts counties from levying tobacco taxes.

“It would be great if we were not preempted from taxing tobacco,” Commissioner Jessica Vega Pederson said Thursday as she considered whether to support the increase.

Instead the Committee in 2016 recommended each vendor apply for a license and pay a fixed fee, established at $580, that would allow the county to support retailers in complying with laws regarding tobacco marketing and sales to minors.

The license rule went into effect July 1, 2016, and within six months, 691 stores had obtained a license. Over the next 12 months, the tobacco control team conducted 129 Outreach visits, 886 routine inspections, held 3 in-person trainings, developed an online training, and levied 13 fines.

Raising the Sales Age

Multnomah County meanwhile lobbied the state to raise the age at which people could buy tobacco and nicotine, and in 2017, the Legislature did just that, increasing the legal purchase age to 21. When the law went into effect in January, 2018, Multnomah County hired a team of teens to pair up with inspectors and ensure vendors were following the rules.

The past year has shown how well the system works, Kari McFarlan, the tobacco control and prevention manager, said Thursday.

By August of 2018, her staff of inspectors and undercover teens had conducted 525 inspections. The youth would try to buy cigarettes, cigarillos, e-cigarettes or flavored e-liquids containing nicotine. The youth were ages 18 and 19 years old and carried their valid state-issued ID, which they would present if the store clerk asked. If asked their age, the youth couldn’t lie.

Of those inspections, 84 retailers failed, triggering a non-negotiable $500 fine and mandatory training. Of those who failed, 7 failed again, triggering another fine and a 30-day suspension of their tobacco retail license.

By March 2019, the tobacco control team had tallied 916 inspections, while the violation rate continues to hover at about 15 percent. That demonstrates how a healthy license fee supports healthy oversight.

“Our goal is to reduce youth access. Nationally, the evidence indicates that robust programs are associated with a reduction of teen smoking and vaping,” McFarlan said. “That’s our public health goal.”