Friday, January 9, 2009

Cigarette Tax First Major House Issue

Yesterday, the House Ways & Means Committee passed out H.B. 364 by a vote of 13-11. This bill would increase the tax on cigarettes by 82 cents per pack for a total of $1.00 per pack. The House was expected to vote on the bill this morning, but it was put off until next week, probably because there were questions on whether enough votes were there to accomplish the required 3/5 margin.

The House will likely debate and vote on the issue early next week. Several amendments are likely to be offered. The only item of contention for House members is the exact amount of the increase; some are advocating for an increase of 82 cents per pack like H.B. 364 proposes. Others, especially those living in counties bordering neighboring states, are pressing for a more moderate increase of 42-50 cents per pack.

However, it's quite clear a cigarette tax will happen this year. With massive budget shortfalls, the cigarette tax is seen as an attempt to plug funding holes for such items as education and Medicaid. An additional possibility is that a cigarette tax increase could have an early "effective date," which would mean the increase would go into law well before the usual July 1 date of new laws.

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