Legislation would ease tobacco tax stamp trouble
Smokers are often the target of tax increases. Every year, cities and counties across Virginia are increasing their local taxes on cigarettes.
Republican Senator Frank Ruff of Mecklenburg County says the inelastic demand allows city council and boards of supervisors to constantly see a new source of revenue. "That's an easy target. The fewer people smoking taxes, there's fewer resistance to raising taxes," Ruff argues. "So you can keep raising taxes until the last person smoking pays a billion dollars a pack."
That tax isn't a billion dollars a pack, of course. But every time a local government changes the local tax, retailers have to get new stamps for each and every cigarette pack -- an effort to prevent black market sales.
Ruff says retailers should be able to pay the new higher tax without having to get new stamps on all their existing inventory, at least for the first year. Jodi Roth at the Retail Federation says it's a way to simplify things for businesses that are struggling. "In a time when they are all hurting for workers this is a very cumbersome process for them. So this kind of gives them more time and simplifies the process," Roth says.
Ruff says smokers would still be hit with the higher taxes if his bill passes. But retailers wouldn’t be hit with the headache of getting new stamps for all the cigarette packs they already have sitting on their shelves.