At present, certain cities can choose to have their own cigarette tax. Ashland, for example, has their own cigarette tax with their own separate stamp. If you purchase a pack of cigarettes in Ashland, you will see two stamps on the bottom of the pack, while if you purchase cigarettes in Bowling Green, you will only see one stamp on the bottom of the pack. Tonight, the Caroline County Board of Supervisors will take up a motion to consider passing a resolution requesting the Virginia General Assembly to amend Virginia Code to allow Counties to issue their own cigarette tax as well.
Virginia currently imposes a cigarette excise tax (Code of Virginia §58.1-1000 et seq.) in the amount of 1.5 cents per cigarette. This equates to 30-cents per pack for a standard pack of 20 cigarettes, or $3.00 per carton. Payment of the tax is evidenced by affixing a Virginia Revenue Stamp (cigarette stamp) to each pack of cigarettes.
Only suppliers who have applied for and received a Stamping Agent Permit from the Virginia Department of Taxation may purchase Virginia cigarette stamps. The Department is the only authorized dealer of cigarette stamps, and the stamps may neither be resold by, returned to, transferred to or purchased from, parties other than the Department.
Every stamping agent who sells, stores, or receives cigarettes for the purpose of distribution to any person, firm, corporation, or association within Virginia must pay the state excise tax on such cigarettes by affixing the stamps to the cigarette packs. There are only a few exceptions to this requirement, which are outlined under Exemptions to Stamping Requirements.
Other than exempt cigarettes, all cigarettes for sale in Virginia should have the revenue stamp affixed to each pack. Persons in possession of unstamped cigarettes are liable for the payment of the excise tax as well as a penalty of $2.50 per pack, up to $250,000.
This resolution was proposed to Caroline County by the Wythe County Board of Supervisors for our consideration. Currently, only Fairfax and Arlington Counties have the authority to tax cigarettes. These “sin taxes” are often popular, because the majority of citizens recognize that they will benefit from these taxes without having to pay them. Cigarette Smoking is associated with lung cancer and heart disease, as well as with increased costs to our healthcare system. Furthermore, the General Assembly has been, and is still currently looking at ways to reduce fees and taxes administered by localities, putting a great deal of pressure on localities to find other ways of raising revenue without raising property taxes.
On the other hand, are excise taxes of this kind virtuous? Are taxes directed toward one group of people, toward one product, really in the spirit of our laws? Obviously, with tool, meals, and BPOL taxes many counties are doing this already, so who’s going to complain about one more. The fact is, that BPOL and tool taxes are probably on their way out, so counties are looking at increasing property taxes, or they are going to have to find other creative ways of raising revenue.
Without having the data on Cigarette sales in Ladysmith and Carmel Church, I have no way of proving that a majority of our cigarette sales are sold to people who live elsewhere, but considering our interstate traffic, I believe that a majority of a cigarette tax in Caroline County would be paid by travelers. It could be a good idea and it is definitely something worth considering by the Board.
Obviously, even if the General Assembly opens up taxing authority to all counties in the Commonwealth, that does not necessarily mean that every county will decide to adopt a new cigarette tax. It would merely mean that such taxing authority is permitted.
What do you think? Our Board will be considering the matter this evening.