JackTales

Tony Potts
03-10-2010

The Georgia House of Representatives is moving to increase state excise taxes on cigarettes by 270 percent and pipe and smokeless tobacco by 150 percent that the International Premium Cigar & Pipe Retailers Association and Americans for Tax Reform are having none of. The group of close to 100 people held a protest on Tuesday on the state Capitol`s steps.

House Bill 39 aims to increase state cigarette taxes from the current $.37 per pack to $1.37 per pack and state taxes on loose and smokeless tobacco would go up 150 percent from 10 percent of wholesale value to 25 percent of wholesale cost.

In a letter to Georgia House and Senate Taxpayer Protection Pledge signers, the ATR said, `A vote in favor of this tax hike would be a violation of the, commitment you made to your constituents to oppose any and all tax increases.`

The letter also pointed out that Georgia’s nearby states have an average cigarette tax of $.36 per pack. If the tax hike is passed, Georgians will have to pay $1.37 in state taxes per pack, nearly quadruple that of their neighbors. In a similar situation, Maryland raised the state’s tobacco tax last year to cover a projected budget shortfall. However, the problem was only made worse when tobacco sales fell 25% after consumers drove to nearby states with lower tax rates to make their tobacco purchases.

Chris McCalla, legislative director of the Columbus, Georgia-based IPCPR, agreed with the ATR’s position that, “It is critical to revitalize Georgia’s economy with tax cuts, not tax increases. We must lift the burden of larger government from the backs of hardworking taxpayers and consumers instead of further depressing economic activity.”

Although premium cigars are not included in the proposed tax hike, McCalla said the IPCPR’s position was preemptive and aimed at attempting to protect the long-range business interests of its members and the rights of Georgia consumers.

McCalla recounted a story told to him by Brett Chastain, owner of the Sweetbriar Smoke Shop in Columbus, Georgia. Chastain’s location serves the Ft. Benning area and many of his pipe tobacco customers are retired military on fixed income.

“These people, our heroes, are very sensitive to tax increases. The proposed state tax increase on pipe tobacco would further exacerbate the pricing issues brought on earlier this year by a 158 percent increase in the federal tax on pipe tobacco. It went from $1.10 per pound to $2.83 per pound. And Georgia wants to add to that an increase of 150 percent in state taxes? What are they thinking?” McCalla asked.