Tobacco Tax

Published 12:00 am Tuesday, May 5, 2009

After compromise, legislators expect vote on tobacco tax

By Billy Davis

A vote for a 50-cent cigarette tax hike is expected to pass when state legislators return to Jackson Wednesday to complete their session.

Legislators are also expected to tackle the state’s Car Tag Reduction Fund, which faces a $25 million shortfall in the new fiscal year.

Sign up for our daily email newsletter

Get the latest news sent to your inbox

Lawmakers have said the cigarette tax hike, if passed, can provide state revenue needed to continue the car tag funding.

Mississippi’s Car Tag Reduction Fund began in 1994 to help automobile owners save money when purchasing an annual car tag from the county tax collector. To offset the loss in county revenue, the State Tax Commission reimburses the counties each month with a “car tag credit.” 

The legislature plans to “convert” $25 million from the cigarette tax hike to fund the car tag program, state Rep. Warner McBride confirmed last week.

“We expect to wrap up the session by Friday,” he said.

The state’s Senate and House, unable to agree on the amount of the tax hike, wrangled over the issue during the current session. But a conference committee worked out a compromise last week.

If the increase is approved by the legislature and Gov. Haley Barbour, the state tax on a pack of cigarettes will jump from 18 cents to 68 cents. The tax increase would go into effect May 15.

The Senate had passed a 49-cent increase while the House passed an 82-cent increase. The 68-cent increase represents an almost-even split between the proposals. 

The state House and Senate recessed March 31 with a stated plan to return in May to wrap up their 90-day session.

McBride has said the recess gave legislators time to negotiate on the cigarette tax and also allowed time for the federal government to outline Mississippi’s spending guidelines for $3 billion in federal stimulus funds.

Gov. Barbour has also asked lawmakers to meet in a special session, during their current session, to address eminent domain.

Barbour vetoed a bill in March that eliminated eminent domain to take land for private development projects, The Clarion-Ledger reported.

Eminent domain is traditionally used for public uses, such as roadways and industrial parks.