By Alex Bridges -- email@example.com
Warren County and Front Royal could join most localities in the region and start charging a tax on cigarettes.
But such a levy faces a number of hurdles -- including a public hearing -- before either jurisdiction could implement a tax.
Front Royal officials warned that both jurisdictions would need to set up such a tax simultaneously and for the same rate or risk driving cigarette buyers into either of the localities that did not charge the levy.
Front Royal Town Council on Monday discussed the possibility of adding a tax on cigarettes as another way to raise revenue beyond the usual property taxes. The issue came up as a discussion item at the town-county liaison meeting in May. At that session the representatives decided to take the matter back to their respective elected bodies for further discussion, according to Town Manager Steven Burke. The matter then could come back at the next liaison committee meeting, Burke said.
"The understanding was that if the town or the county independently adopted a tobacco tax it would simply drive sales out of that jurisdiction and into the other," Burke said. "So if there was any consideration [of the tax] it would have to be a joint consideration.
"Right now we're in the exploratory state, just going through and simply getting consensus by both the town and the county to see if it's worth staff investing further time into what types of tobacco taxes could be adopted by both jurisdictions," Burke added.
Staff provided a list of all towns in Virginia which had adopted a tobacco taxes and identified how much in revenue each collected in fiscal 2011. The discussion focused more on the potential revenue from a tax, Burke said. As Burke recalled the representatives recognized several localities in the region who had already adopted a tax were looking at raising their levies.
Information provided by staff showed that Woodstock collected $89,186 and Strasburg $124,705 in cigarette tax revenue in fiscal 2011.
New Market Town Council voted in May to raise the jurisdiction's cigarette tax from 10 cents to 15 cents and the new rate takes effect July 1. Woodstock Town Council met Tuesday and voted to adopt an ordinance setting the fiscal 2013 budget. The action also raises the town's cigarette tax rate from 10 cents to 25 cents -- largest increase put into effect in any of the region's localities.
Most localities in the area that impose a cigarette tax set the rate at 25 cents per pack. Mt. Jackson charges the highest levy at 35 cents.
Whether the tax rates in other localities play a role in what Front Royal and Warren County set as their levy remains uncertain.
Douglas Stanley, county administrator for Warren County, said Tuesday he received correspondence from Burke indicating council wants to talk with the Board of Supervisors about the tax possibility.
"For the most part the town has asked us whether we're interested in or not," Stanley said. "The Board of Supervisors has not formally discussed the matter to say yes or no so at this time [it's] a little premature.
"It would be months away if we were to do something like that," Stanley said. "You have stamps, implementation issues, those types of things you have to look into as well."
The issue likely will come up at the next Town-County liaison committee meeting in July, Stanley said.
Some cigarette tax rates in the region
Mt. Jackson - 35 cents
New Market - 10 cents (15 cents starting July 1)
Strasburg - 25 cents
Stephens City - 25 cents
Winchester - 25 cents
Woodstock - 10 cents (25 cents starting July 1)