Public Comments for 01/16/2023 Finance - Subcommittee #1
HB1369 - Income tax, state; installment agreements for payment of taxes.
HB1405 - Income tax, corporate; returns, affiliated corporations.
HB1405 /SB796 would give additional needed flexibility to companies to choose the method of filing after waiting 12 years and agreeing to pay the higher tax amount for the first two years under the new election. This would give Virginia corporations greater filing flexibility while preserving the protections on near-term impact to state corporate income tax collections. The VMA supports this bill. It will improve Virginia’s economic competitiveness.
The Roanoke Regional Chamber of Commerce supports HB 1405. Thank you for your consideration.
HB1417 - Cigars; modifies the statutory tax rate imposed on selling or distributing, etc.
As usual, we are hearing the scare tactics from the American Lung Association and other prohibitionists about the dangers of smoking cigars by using negative statistics that are related to cigarette studies and NOT cigar smoking. The often-quoted CDC Study is incorrectly cited by ALA in their comments related to HB1417. The CDC concluded that "Cigarette smoking remains the leading cause of preventable disease and death in the United States, killing an estimated 480,000 Americans each year". This is an accepted scientific study, however, ALA has decided to swap out CDC's statement on "Cigarette" to use instead the word "Tobacco" smoking remains the leading cause....." so they could lump cigar use as the equivalent as cigarette usage. As they state in their comments: "cigars as are other tobacco products are essentially the same as cigarettes and carry the same health risks with their usage". Any honest researcher (and cigar smoker) can tell you that cigar usage, from frequency to non-inhalation, is completely different from the cigarette smoker and comparing the two is like saying an apple is essentially an orange. The only "current" scientific study which was based on 2010 data (and published in 2014) estimates that number of annual deaths attributable to cigar usage is 9,000. And this was based on combining users of cigarillo and little cigars (which are smoked frequently like cigarettes) with large cigar usage which is not. The study included in the "fatal cigar smoker data pool" anyone that smoked a cigar almost every day for 30 days. This is not the profile of your average casual Virginian cigar smoker. Heart disease is the leading cause of death in America with an individual's weight, i.e. food consumption, a significant factor impacting coronary heart disease. So I question why the Commonwealth reduced state taxation on groceries last year if government intervention via legislation is desired to curb a citizen's unhealthy habits? Isn't then ALA's logic and other higher tax advocates on cigars comparable in that further reduction in food taxation will cause increased consumption and further unhealthy habits while making food cheaper for teenagers, endangering their long-term health? Shouldn't we be increasing government intervention in all our life and why is individual freedom and decision making necessary? JK The bottom line is that when the Virginia legislature doubled the taxation on cigars it hurt small, family owned businesses across the Commonwealth and added to inflation. It is time to pass HB1417 and SB922 in support of small business retailers in our state.
Thank you for the opportunity to provide comments on House Bill 1417 a bill to lower the tax on cigars in Virginia sponsored by Delegate Ware. The American Lung Association strongly opposes this bill. The American Lung Association is the leading organization working to save lives by improving lung health and preventing lung disease, through research, education and advocacy. The work of the American Lung Association is focused on four strategic imperatives: to defeat lung cancer; to improve the air we breathe; to reduce the burden of lung disease on individuals and their families; and to eliminate tobacco use and tobacco-related diseases. As drafted, House Bill 1417 would impose a decrease in the tax rate of cigars from 20% to 10% of the manufacturer’s sale price or $0.30 per cigar, whicever is less. The American Lung Association is concerned as the proposed language is decreasing the current tax rate, making premium cigars more accessible and decreasing revenue that is invested in tobacco cessation and prevention efforts in our state. This undermines the current tax structure in place. This bill could also set a precedent which would allow other tobacco products to request similar exemptions or “carve outs” from policies and ultimately increase access and use of these dangerous products. Tobacco use remains the leading cause of preventable death in the United States, killing an estimated 480,000 Americans each year.1 Research is clear that the most effective way to address smoking rates is to increase taxes on these products and invest those funds in a tobacco control programs including prevention and cessation efforts. The American Lung Association supports policies regarding increasing tobacco taxes on all tobacco products as part of a comprehensive tobacco control program and as an effective strategy to decrease smoking rates. The American Lung Association believes that all tobacco products should be considered similar and tied to the tax rates on cigarettes. House Bill 1417 is proposing a decreased tax rate for a certain type of tobacco product, namely cigars as referenced in the bill. However, cigars as are other tobacco products are essentially the same as cigarettes and carry the same health risks with their usage –including cancer and lung disease. In fact, the amount of tobacco in a large premium cigar in many cases equals the same amount of tobacco in an entire pack of cigarettes. The Lung Association is concerned that by lowering tax rates on certain products it might encourage smokers to turn to these lower-priced alternatives rather than focus on quitting. Finally, significant taxes on all tobacco products result in fewer kids starting to smoke, and in more adults quitting while at the same time providing substantial revenue to fund important health and tobacco prevention programs. While House Bill 1417 may seem to have a narrow focus, tobacco policy cannot be done in isolation and without concern for unintended consequences. Tobacco prevention and control requires a multifaceted approach and policy measures must be comprehensive and address all products to be effective. The American Lung Association thanks you for the opportunity to provide comments and express our concerns with House Bill 1417. We ask that you continue Virginia’s commitment to a healthier community and vote against House Bill 1417 which would take a step backwards in the fight to curb smoking in Virginia.
HB1442 - Transient occupancy tax; administration.
HB1578 - Income tax, state; manufactured home park sale.
January 14, 2023 Dear members of House Finance Subcommittee One I am writing in favor of HB1578/SB922, which provides an incentive for mobile home park owners to sell to non-profit housing providers or resident cooperatives rather than profit-making organizations by allowing them to deduct any gain from such a sale from their taxable income. The nonprofit maintain the land as a mobile home park for at least 30 years. The South County Task Force is a local organization that advocates for issues related to poverty and equity in South Fairfax County. We work with residents of four mobile home parks that are home to about 1,000 families. Mobile homes provide an important source of affordable housing and residents tell us they love living in their communities. Across the state, a number of parks have been stabilized and improved under the ownership of nonprofit organizations like Habitat for Humanity and Catholics for Housing, who run parks for the benefit of the residents. Yet more parks are being bought up by private equity firms that tend to raise rents and reduce maintenance. Others are being lost to development. Over the past year, two of our mobile home parks [Harmony Place Mobile Home Park and Engelside & Rays Mobile Home Park] were bought by private equity companies. In both cases a nonprofit was willing to purchase the park and the residents had formed an organization to represent themselves (as required in current state legislation) in order to partner with a nonprofit to make an offer. Yet the process assumed in the recent Manufactured Housing Lot Rental Act amendment has a fatal flaw that prevented the nonprofit from succeeding. The amendment assumes that a park will be put up for sale and bidders can make offers. In fact, there is usually no announcement that the park is up for sale because mobile home park owners are barraged by calls from equity firms. In both cases, tenants were notified only after a contract was signed between the park seller and the private buyer and the contracts included substantial penalties, as well as the threat of a lawsuit for breach of contract, if the seller backed out. In one case [Harmony Place], even when the nonprofit offered more than the contracted buyer, the seller would have lost money if he had accepted the offer and paid the penalties specified in the contract. Thus, offering the incentive of a tax break to park owners who sell to nonprofits gives nonprofits an advantage, especially if they make the first offer. Providing incentives to sell to nonprofits or resident cooperatives is the only way to level the playing field and preserve these valuable sources of market-rate affordable housing. The alternative of building more rental affordable housing is considerably more costly to state and local governments than allowing nonprofits to preserve and improve mobile home parks. Please vote yes to move HB1578 forward. Sincerely, Mary Paden Chair, South County Task Force