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County backs off joining statewide Cigarette Tax initiative – for now

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At its final work session of 2016, the Warren County Board of Supervisors reviewed a statewide initiative to give ALL Virginia Counties the ability to charge a local cigarette tax – the consensus was to track activities in that regard but back off joining them for now.

The Virginia Tax Fairness Coalition is seeking counties to follow the lead of Wythe County in joining the group in lobbying efforts to expand cigarette-taxing authority to all Virginia Counties.  Currently only Arlington and Fairfax, of Virginia’s 95 counties, have that authority.

And it is a fundamental municipal taxing inequity that the VTFC is seeking to rectify – NOT with Arlington and Fairfax, but with ALL of Virginia’s Cities and Towns that already have cigarette taxing authority.

The VTFC was created by an alliance between the Virginia Association of Counties (VACO) and the lobbying group Advantus Strategies.  Its goal is to encourage VACO members to join in an effort to have legislation presented to the General Assembly in 2017 granting the remaining 93 Virginia Counties equal cigarette-taxing authority with the State’s cities and towns; as well as Arlington and Fairfax Counties, which unilaterally got ahead of the curve on this one.

Warren Supervisors, from left, Archie Fox, Linda Glavis, Dan Murray, Tom Sayre and Tony Carter ponder funding issues, including a statewide cigarette-tax initiative during their final work session of the year, Dec. 13. PHOTO/ROGER BIANCHINI

In his proposal to VACO members, Advantus’ Mark Flynn promises no funding of the initiative will be asked from individual Counties until a minimum of eight have joined the effort.  In early November Wythe’s Supervisors unanimously voted to become the first County to join the Coalition.  They estimated an annual cost of about $6,000 to propel the cigarette and other tax initiatives forward “if enough Counties agree to join”.

While the cigarette tax is at the forefront of the Tax Fairness Coalition’s lobbying effort before the General Assembly in the coming year, it notes plans to expand that effort to include equal municipal rights on meals, transient occupancy and admissions taxes.

Revenue potential

The State allows up to a 30-cent tax per pack, with 10 to 15-cents being about average.  Information in the agenda packet presented to Warren’s Supervisors noted that the Town of Wytheville takes in about $300,000 annually based on a 15-cent per pack tax.  Wytheville’s population was 8,235 in 2013, and has hovered around 8,000 for a quarter century.

Based on existing municipal cigarette tax revenues around the State, as well as its out-of-Town (Front Royal) population of around 23,000, Warren County Administrator Doug Stanley estimated $600,000 or more generated if Warren imposed an average cigarette tax on out-of-Town sales locations.

Statistics from nine Towns and smaller Cities, including Woodstock, Leesburg, Purcellville and Salem, indicated an average per-resident cigarette tax revenue of $26.05.  That average included a low end of $17.50 per resident in Abingdon, to a high of $40.82 in Woodstock.

If you consider those population numbers are non-specific, including non-smoking adults, as well as children and toddlers most of whom one would hope are NOT smoking, the actual per-smoking-person revenue is considerably higher.

As stated at the outset, the Warren Supervisors decision was “to hold tight for now” as the County Administrator voiced it; and follow the progress of the effort from its early stages before making a final decision on entering the fray.

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