Tax Increase on Tobacco Is Snuffed Out

By Ashley McLeod
Capital News Service

Richmond, Va. — Smokers can breathe – or wheeze – a sigh of relief after legislation to raise the state tax on tobacco products died in a House subcommittee on Friday.

House Bill 160, introduced by Delegate Patrick A. Hope, D-Arlington, would have increased Virginia’s tax on cigarettes from 30 cents per pack to $1.45 per pack – a 383 percent boost.

That increase would have brought Virginia’s tax up to the national average. The bill also called for raising the tax on other tobacco products from 10 percent of the wholesale price to 50 percent.

HB 160 had been referred to the House Finance Committee. On a voice vote Friday, a subcommittee of that panel recommended that the bill be tabled.

“I’m disappointed, but I can tell you I’m not surprised,” Hope said.

Virginia has the second-lowest tax on cigarettes in the country. Only Missouri’s tax, at 17 cents per pack, is lower. New York has the highest state tax on cigarettes – $4.35 per pack. In addition to the state taxes, the federal cigarette tax is $1.01 per pack.

Hope introduced similar legislation during last year’s session of the Virginia General Assembly. It suffered a similar fate.

Under Hope’s 2011 measure, revenues from the proposed tax increase on cigarettes would have helped fund Medicaid as well as tobacco cessation programs.

Hope designed HB 160 differently: 8 percent of the additional tax revenues would have gone to programs to help smokers quit or help prevent smoking among young people. The remaining 92 percent would have been directed to local governments to help them reduce their personal property taxes on private vehicles.

“What I was doing this time was trading one tax for another,” Hope said. “I’m trying to increase revenue, and at the same time trying to get people to stop smoking.”

Hope said the proposed cigarette tax increase would have generated about $23 million for tobacco prevention and cessation programs and $265 million for car tax relief. The additional revenues would have cut the amount Virginians pay in car taxes by nearly half.

Proponents say higher cigarette taxes have an added benefit: They discourage people from smoking.

Other states, such as New York and Washington, have raised their tobacco taxes in the past 10 years and have witnessed a drop in the number of youth and adult smokers.

According to the Campaign for Tobacco-Free Kids, 56,700 adults in Virginia would stop smoking, and 53,900 children would never start to smoke, under the cigarette tax increase proposed by Hope.

Hope said he will introduce similar legislation again next year.

How Virginia Compares

Virginia has a lower tax on cigarettes than neighboring states.

State Tax per pack Rank among 50 states and D.C.

Kentucky $0.60 40

Maryland $2.00 11

North Carolina $0.45 45

South Carolina $0.57 42

Tennessee $0.62 39

Virginia $0.30 50

West Virginia $0.55 44

Washington, D.C. $2.50 10