I am in favor of this bill which reforms the taxation of cigars in Virginia. Here's why: Tax Fairness: By capping the cigar tax at the lower of 20% of the manufacturer's sales price or $0.30 per cigar, this bill introduces a fairer taxation system, preventing disproportionately high taxes on premium or more expensive cigars, which supports equity in taxation. Support for Local Businesses: This tax cap could benefit local tobacconists and distributors by making premium cigars more competitively priced, potentially increasing sales and supporting small businesses within the state. Data-Driven Policy Making: Requiring the Department of Taxation to collect specific data on premium cigar sales allows for more informed policy decisions. This data will help understand market dynamics, aiding in crafting future tax policies that are both effective and fair. Economic Analysis: The directive for the Department to report on the fiscal impacts of the proposed tax cap or alternative rates by December 1, 2025, ensures that any changes to the tax structure are based on solid economic analysis, promoting fiscal responsibility. Consumer Choice: Lowering the potential tax burden on premium cigars could enhance consumer choice, making a broader range of products accessible to enthusiasts and collectors, boosting consumer satisfaction and market diversity. Simplification of Tax Compliance: By setting a clear cap, this legislation simplifies tax compliance for distributors and sellers, reducing the complexity of calculating taxes on varying cigar prices. Encourages Legal Sales: A reasonable tax structure might discourage the black market for cigars by making legal purchases more attractive, thereby supporting legal trade and tax collection. I support this legislation for its approach to equitable taxation, support for local businesses, data-driven policy making, fiscal analysis, enhancement of consumer choice, simplification of tax compliance, and its potential to encourage legal sales, all contributing to a more balanced and informed market for tobacco products in Virginia. No file chosen

Comments Document

The American Lung Association strongly opposes this bill. As drafted, House Bill 1572 would impose a cap in the tax rate of cigars of 20% of the manufacturer’s sale price or $0.30 per cigar, whichever is less. The American Lung Association is concerned as the proposed language is capping and decreasing the current tax rate, making premium cigars more accessible and decreasing revenue that is invested in healthcare, and tobacco cessation and prevention efforts in our state. This bill undermines the current tax structure in place and 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.

Anything to curb my tobacco allergies!

Newport News is opposed to any legislation that results in the elimination or reduction of local revenue streams. This bill, if enacted, will have a negative fiscal impact to the locality. BPOL accounts for about $23 million in city revenue, about two-thirds of which comes from a flat fee. However, a third of city businesses pay BPOL based on their business activity. This proposal needs to be studied more closely before this is implemented.

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Comments Document

On behalf of the Council On State Taxation (COST), I respectfully submit these comments in support of H.B. 1743. Virginia’s current business, professional, occupation, and license tax (BPOL) is a gross receipts tax imposed at the local level. Currently, the tax allows a deduction from gross receipts for any receipts attributable to business conducted in another state or foreign country in which the taxpayer is liable for an income tax but not in states where the taxpayer is liable for a gross receipts tax or taxes imposed in lieu of an income tax. H.B. 1743 would correct that discrepancy