‘Big Beautiful Bill’ targeted NC tobacco industry. Tillis and Budd played defense.
AI-generated summary reviewed by our newsroom.
- Senate removed tobacco tax break repeal from bill amid pushback from NC senators, farmers.
- NC exports $668M in tobacco and leads US in production with 205.2M pounds.
- Tobacco giants Altria and Reynolds clashed over the impact of repeal.
Sen. Thom Tillis found himself under attack by MAGA personalities Charlie Kirk and Laura Loomer for defending North Carolina tobacco farmers against a provision in the One Big Beautiful Bill Act that Tillis said would be catastrophic for their businesses.
And one North Carolina farmer found himself mired in controversy after someone falsely used his name in an opinion article supporting the legislation.
It’s all part of a dispute that pits North Carolina-based R.J. Reynolds Tobacco Company against Virginia-based Altria — two tobacco giants with powerful lobbying arms.
Last month, when House Republicans advanced the bill meant to enact President Donald Trump’s agenda, they slipped in a provision that would repeal what is known as the duty drawback on tobacco taxes. The duty drawback allows companies importing tobacco to receive a tax break described as a refund, if that importer then exports the same amount of tobacco or destroys it.
Supporters of the bill say cutting the tax break would save the federal government $12.1 billion.
But members of North Carolina’s tobacco industry say the duty drawback allows farmers in North Carolina to sell their product internationally.
Our Ag Future, a program within the North Carolina Chamber of Commerce, is airing ads and video interviews calling for Tillis, a Republican from Huntersville, and Sen. Ted Budd, a Republican from Davie County, to withdraw the repeal from the bill and to thank them for their support.
This week, senators pulled the provision from their version of the bill.
North Carolina impact
Brandon Batten, a farmer from Johnston County, was among those spotlighted in the group’s videos.
“This is not just an attack on tobacco,” Batten says in one video. “This is an attack on our rural communities and economies.”
North Carolina exports more tobacco than any other state at $668 million worth of product in 2023. It’s also the largest producer of tobacco in the country, having produced 205.2 million pounds in 2024. Kentucky is the next largest producer at 75.4 million pounds.
The state is home to R.J. Reynolds Tobacco Company and Lorrilard Tobacco Company. Remnants of older factories, including for Lucky Strike and the American Tobacco Company, are still sprinkled throughout the state.
Even with adult cigarette smoking falling by 70% over the past 60 years, tobacco remains the leading cause of preventable death nationwide and the cause of $240 billion a year in health care costs, The News & Observer reported, citing data from the federal Office of Smoking and Health, which the Trump administration shut down.
Tobacco kills about 14,000 people a year in North Carolina, The N&O reported, citing a 2024 surgeon general’s report.
Supporting NC tobacco
Tillis and Budd were quick to call out the hidden provision buried in the more than 1,000-page bill that members of the House had less than a day to read and vote on.
On social media Tillis wrote: “One of the provisions tucked away in the House tax bill is a tax hike that would decimate North Carolina tobacco farmers. I stand with our hardworking growers and I’m pushing to get this hidden tax removed from the One Big Beautiful Bill.”
Budd reposted Tillis’ message.
Both senators have expressed concern about the provision and the impact it would have on farmers, as well as what they say is the unfair advantage it would give to companies that focus on domestic sales.
R.J. Reynolds, the second-largest tobacco company in the nation, is based in Winston-Salem.
“We believe the duty drawback provision poses a serious threat to North Carolina’s economy, with potentially devastating consequences for farmers,” R.J. Reynolds officials said in a written statement to McClatchy. “We have engaged with lawmakers and remain committed to ensuring that our concerns— and those of our growers and their communities — are heard.”
Reynolds is up against Altria, the biggest in the nation, which is focused on domestic products and supports the repeal.
Altria has spent $3.14 million on lobbying in 2025, and Reynolds American has spent $1.9 million, according to Open Secrets.
In support of the bill passing the House, the White House put out a statement quoting Todd Walker, Altria’s senior vice president of government affairs and public policy: “The bill also includes good policy, like the closing of the ‘double drawback loophole for tobacco,’ an accidental policy that allows foreign tobacco companies to avoid paying federal excise taxes on cigarettes.”
A form of duty drawback has been legal since 1789.
There’s been various arguments made through the years for getting rid of the duty drawback and Kirk and Loomer weighed in on the argument — with special attention to Tillis ahead of a potential GOP primary in his 2026 reelection bid.
Kirk reposted Tillis’ message and wrote, “President Trump fought for FAIR TRADE by trying to close the ‘double drawback loophole’ that allows foreign cigarette companies to rip off Americans for $12 BILLION over 10 yeras. Courts blocked him, but House GOP delivered in Trump’s ‘One Big Beautiful Bill!’ Senate, DON’T BOW DOWN TO FOREIGN LOBBYISTS!”
Loomer wrote in sharing Kirk’s message that Tillis is a Republican in name only, who has been censured by his own party.
“Now, Tillis is cozying up to foreign tobacco companies that are looking to profit more in North Carolina at the expense of American companies,” Loomer wrote. President Trump, a relentless champion of FAIR TRADE, always puts America First. These foreign tobacco giants rake in billions of dollars every year while exploiting loopholes.”
She urged senators to support the bill.
Meanwhile, an opinion piece attributed to North Carolina corn farmer John Pickler and supporting the repeal appeared in NC Political News, a politics website.
The article calls on Tillis and Budd to support the legislation, calling the tax break “a tax cheat” that allows foreign companies to collect a refund on federal excise taxes they never paid in the first place.
Pickler is president of the Corn Growers Association and wrote a letter, obtained by McClatchy, to the North Carolina agricultural community explaining he had nothing to do with this op-ed.
“... I was so disappointed by the confusion created by NC Political News publishing an editorial under my name espousing opinions that neither I, nor the Corn Growers Association of North Carolina, endorse,” Pickler wrote. “The op-ed ‘Double Drawback Loophole Harms North Carolina Farmers, Time to Close It, in no way reflects my views or the views of the Corner Growers Association of North Carolina.”
Picker said he and the association didn’t participate in the publication of the article.
NC Political News has since removed the op-ed from its website. Its publishers did not respond to submitted questions through its website. asking how this came about. Pickler did not respond to an email or message submitted through the Corn Growers Association website.
Drawback withdrawn
The bill is still working its way through the committee process in the Senate before it moves to the floor.
If the bill passes the Senate, it has to go back to the House for another vote because revisions have been made in the upper chamber.
Once it passes both chambers it would go to Trump for his signature.
On Wednesday, Trump told reporters outside the White House that anyone who votes against the bill, he thinks, “will be finished in politics.”