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2004 SESSION

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SB 465 Cigarettes and tobacco products; tax increased revenue deposited in Health Care Fund.

Introduced by: John H. Chichester | all patrons    ...    notes | add to my profiles | history

SUMMARY AS PASSED SENATE:

Taxation; cigarettes and tobacco products. Increases the state excise tax on cigarettes from two and one-half cents to 20 cents per pack on July 1, 2004, and 35 cents per pack beginning July 1, 2005. The bill also provides for a 10 percent tax on other tobacco products at the wholesale level. The tax on other tobacco products is paid monthly through the filing of returns.

All revenue from cigarette and other tobacco products taxes would be deposited into a special fund known as the Virginia Health Care Fund. Moneys deposited to the fund would be used solely for the provision of health care services including, but not limited to Medicaid payments, disease diagnosis, prevention and control, and community health services.

SUMMARY AS INTRODUCED:

Taxation; cigarettes and tobacco products. Increases the state excise tax on cigarettes from two and one-half cents to 35 cents per pack and imposes a 10 percent tax on other tobacco products at the wholesale level. The tax on other tobacco products is paid monthly through the filing of returns.

The bill also authorizes all counties to impose local cigarette taxes beginning July 1, 2005. The bill provides for a maximum local cigarette tax rate of 55 cents per pack. Any city or town that had a higher cigarette tax rate in effect prior to January 1, 2004, is grandfathered to charge the higher rate. However, the maximum cigarette tax that may be imposed by any county would be fixed at 10 cents per pack for the period July 1, 2005, through June 30, 2006, and the maximum rate of 55 cents per pack would be phased in over a four-year period.