IW cigarette tax up in smoke

Published 9:45 pm Wednesday, February 3, 2010

RICHMOND — Isle of Wight County won’t be instituting a cigarette tax, at least not this year. Legislation that would have allowed the county and others across the state to levy a tax on cigarettes was killed in the General Assembly.

Delegate William Barlow, D-Smithfield, argued that cigarette taxes, which he classified as “user fees,” could bring in significant revenue — especially considering state budget cuts.

“The localities are going to suffer tremendous cutbacks in state money coming back to the localities, and this would be a way of them getting some revenue to provide services for our citizens,” he said.

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Barlow said Isle of Wight officials asked him to sponsor the legislation. One bill would have allowed all counties in the state to tax cigarettes and the other would have given Isle of Wight special authority to levy the tax. Both bills were killed in subcommittee last month.

“Every city in Virginia can tax cigarettes, every town in Virginia can tax cigarettes and even two counties — Fairfax and Arlington — can tax cigarettes,” Barlow said. “It doesn’t seem like to me that’s fair.”

Barlow has introduced legislation in the General Assembly several times that would allow all counties to levy cigarette taxes, just like Fairfax and Arlington counties, but the proposal usually dies — as it did this year — before making it to the House floor for debate.

The argument for the Isle of Wight County-specific tax was underscored by the impending closure of International Paper Co.’s Franklin mill and the loss of millions of dollars in associated tax revenue.

Barlow said that a cigarette tax would allow counties to rely less on real estate taxes and could discourage young people from smoking and decrease health care costs.

“It seems like to me it should be a no-brainer, whether you want to tax cigarettes or you want to tax homes and businesses.”

The bills would not have mandated counties to tax cigarettes, it just would have given them the authority to do so, Barlow said.

Joel Bradshaw, who owns Bradshaw’s Country Store in Carrsville, said he had “a mixed opinion” about the tax. He said the county could use the increased revenue to help offset the loss of IP, but at the same time, the tax could be a disadvantage to small businesses that depend on tobacco sales, especially if neighboring counties didn’t impose cigarette taxes.

He said a statewide cigarette tax that returned a portion of the profits to the localities would be a better idea — and wouldn’t put small businesses at competitive disadvantage. Bradshaw said he e-mailed the state senators and delegates representing the region about his idea, but didn’t get a response.