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How TaxRight MSA can help your State comply with its MSA obligations and avoid challenges from the cigarette manufacturers


What is the MSA:

In 1998, 46 States settled their health care claims against the cigarette manufacturers (Philip Morris, Reynolds, Lorillard and Brown and Williamson) by entering into the Master Settlement Agreement or MSA.  Participating manufacturers agreed to pay over $200 billion dollars to the States by 2025 and accept restrictive rules on how they could market cigarettes.


In return, participating States agreed to protect the participating manufacturer’s sales and establish statutes that documented how sales of cigarettes by non-participating manufacturers would be managed in their State.  The States agreed to

      a) Restrict unauthorized brands from being distributed in their State

      b) Report on sales of all authorized brands from manufacturers that

          did not participate in the settlement and

      c) Require escrow payments from these non-participating manufacturers.   


In 2003, the participating manufacturers began alleging that the States were not abiding by the guidelines set forth in their statutes.  The cigarette manufacturers redirected over $7 billion dollars of State payments into disputed escrow accounts.   Future payments are still at risk of further funding being diverted to these disputed escrow accounts.



To effectively stop the challenges from Participating Manufacturers in the future, States need to produce evidence for Auditors and Manufacturers that the States abide by and “diligently enforce” their Model Statute and are in compliance with their MSA obligations.


 How TaxRight's Technology can help your State:

TaxRight scans cigarette carton UPC codes as they are entering the stamping machine before tax stamps are applied to the packs.





Check1 Carton UPC codes are electronically checked against the State Tobacco Products Directory

    (TPD), which lists brands that are approved for distribution in the State

Check1 If a brand is not on the TPD list the carton is ejected from the stamping machine and no tax

    stamps are affixed to the packs

Check1 Restricting brands that are not in the TPD from being stamped is a core requirement of the

     MSA and the States’ Model Statutes.

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TaxRight MSA can provide accurate reports to the states from the stamping agents supporting compliance with the MSA


Check1 Because there is a record of every carton UPC code that is scanned, Tax-Right can give

    accurate reporting on the number of cartons that each manufacturer has had stamped

    and distributed within a State 

Check1 Reporting the NPM brands and quantities that are stamped in each State is a core

     requirement of the MSA and the States’ Model Statutes

TaxRight MSA can help prevent Participating Cigarette Manufacturers from disputing the State’s diligent enforcement of its Model Statute


Check1 Automatically prevent unauthorized brands from being stamped and distributed

Check1 Produce monthly, quarterly, and annual reports to substantiate required NPM payments

Check1 Provide documentation for Auditors

 TaxRight MSA interfaces with traditional thermal stamping and the latest digital stamping equipment


Check1 Integrates with all stamping machine manufacturers (REDStamp & United Silicone)


TaxRight's MSA - Proven Technology

Since 2001, TaxRight’s technology has been helping cigarette stamping agents verify the accuracy of customer cigarette orders by scanning the cigarette carton UPC barcodes.  This same patented scanning technology can Restrict unauthorized brands from being stamped and Report on the brands that have been stamped helping to secure millions of dollars in potentially lost revenue for the State. TaxRight’s technology is ready to be implemented today.


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