Counties seek power to tax cigarettes
Warren County has joined a growing number of other counties that want the power to tax cigarettes.
Whether or not counties get that authority remains up to state legislators when they begin their session next week. State code allows cities and towns to tax cigarettes. The state also grants Arlington and Fairfax counties the same power. Virginia, a Dillon Rule state, limits the powers of its municipalities to those granted to them by the General Assembly. Arlington and Fairfax counties can collect 30 cents per pack under state law. State Sen. Barbara Favola, D-Arlington, also has filed a bill seeking to allow Arlington and Fairfax counties the authority to double the levy. The bill calls for any revenue gained by increasing the levy to go to elementary or secondary education.
The effort gained support by one legislator this year. Del. Jeffrey L. Campbell, R-Marion, introduced a bill last month for the 2016 General Assembly session that, if passed, would grant authority to all counties to tax cigarettes at a rate not to exceed 5 cents per pack or the amount allowed by state law, whichever is greater.
If passed, Warren County and other counties still would need to add ordinances setting up the tax, which requires public hearings.
Wythe County adopted a resolution last month seeking this taxing authority. The Warren County Board of Supervisors adopted a similar version of the resolution Tuesday.
“Whereas, the County of Warren … requests that all counties in Virginia have equal rights … has been required to fund shortfalls in state and federal funding … has identified a means to lessen the burden on property taxes by implementing a cigarette tax previously approved by state legislative action.” the resolution states.
Warren County Board of Supervisors Chairwoman Linda Glavis said Wednesday the power to tax cigarettes could help the locality.
“Well, I just think it’s a good opportunity for localities to have some income, to make it available for all counties and not just a few,” Glavis said. “We’re always looking for some source of revenue to take it off the backs of the taxpayers, like the real estate and personal property.”
The board hasn’t considered seeking the power to tax cigarettes in at least the past eight years, Glavis said.
Happy Creek District Supervisor Tony Carter agreed with Glavis that cigarettes could serve as another source of revenue. The county would need to further study the option if granted, he said.
“I think it’s just something we have to look at even if we get the approval,” Carter said. “Even if we get the approval (it) doesn’t mean we’d actually adopt it. I think we’d have to look at it and see how much revenue it may generate.”
Many of the towns in the Northern Shenandoah Valley levy a tax on cigarettes. Front Royal does not impose a cigarette tax. An effort to consider a tax on cigarettes in Front Royal fizzled out over fears that customers would go to Warren County, which could not impose the levy, to buy tobacco products.
Carter said Front Royal likely would try to impose a cigarette tax if the county had that power and used it. If the county imposed the tax, it could earmark the funds for specific purposes.
The Shenandoah County Board of Supervisors is expected to consider adopting a resolution about the tax at its meeting Tuesday. Chairman Conrad Helsley said Wednesday he’d support the idea.
“I think the counties ought to have the same taxing power as the cities and towns,” Helsley said. “It doesn’t make sense to me that they don’t so I see nothing wrong with it. It doesn’t mean you’re going to enact it, one way or the other, but I think we ought to have that.”
The county lacks alternative ways to collect revenue to cover increased costs of doing business, especially when the General Assembly hands down “unfunded mandates,” Helsley added. Instead, the county must increase its real estate tax rate, Helsley said.
“I think another avenue such as this would be fine,” Helsley said.
The Virginia Association of Counties lobbies the General Assembly on behalf of its member localities such as Shenandoah and Warren. Dean Lynch, deputy executive director at VACo, said Wednesday the association backs efforts to grant powers to counties afforded to cities and towns.
“We, at VACo, are very supportive of our counties getting equal taxing authority,” Lynch said. “We have always hesitated to pick out certain taxes, you know, that would benefit certain counties.”
The counties of Pulaski, James City and Montgomery have joined Wythe County in the effort, Lynch said.
Del. C. Todd Gilbert, R. Woodstock, stated in an email Thursday that he had not read Campbell’s bill but he would not back the counties’ request. Gilbert represents Shenandoah County as well as part of Warren County and Front Royal.
“I do not support granting additional taxing authority to localities unless there is some offsetting tax relief elsewhere, such as for property taxes,” Gilbert states.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org