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The first two of these strategies also have the benefit of counteracting industry attempts to subvert tax increases through price discounts paid to retailers or wholesalers, which, according to the Federal Trade Commission, accounted for nearly 86% of the industrys advertising and promotional expenditures for cigarettes and smokeless tobacco in 2022

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If your Houston cigar lounge generates 55% of revenue from tobacco and 45% from drinks and merchandise, you don't qualify for the exemption