Vote Smart's Synopsis:

Vote to pass a bill that increases the tax imposed on cigarettes and other tobacco products from July 1, 2010 until June 30, 2013, and establishes formulas for determine the tax rate beginning July 1, 2013.

Highlights:

• Increases the tax on cigarettes weighing not more than 3 pounds per 1,000 cigarettes from 1.475 cents to 8.5 cents per cigarette from July 1, 2010 through June 30, 2013 (Sec. 1).

• Increases the tax on cigarettes weighing in excess of 3 pounds per 1,000 cigarettes from 4.075 cents to 9.963 cents per cigarette from July 1, 2010 through June 30, 2013 (Sec. 1).

• Requires the tax rate on cigarettes weighing not more than 3 pounds per 1,000 cigarettes be adjusted every third state fiscal year after fiscal year 2010-2011 to equal to the greater of the following (Sec. 1):
• The tax rate for the preceding state fiscal year; or
• 0.05 cents plus the average tax rate imposed by other states, except for Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and Virginia (rounded to the nearest 1,000th of 1 cent).

• Requires the tax on cigarettes weighing in excess of 3 pounds per 1,000 cigarettes be adjusted every third state fiscal year after fiscal year 2010-2011 to equal 0.05 cents plus the average tax rate imposed by other states, except for Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and Virginia (rounded to the nearest 1,000th of 1 cent), and multiplying such amount by 1.172 (rounded to the nearest 1,000th of 1 cent) (Sec. 1).

• Requires $250,000 of the revenue generate from the cigarette tax increase be annually appropriated to the Department of Health for use in the Gold Medal Schools Program (Sec. 1).

• Establishes an inventory tax on all cigarettes upon the sale, use, storage, or distribution of such cigarettes equal to the difference between the aforementioned tax on cigarettes beginning July 1, 2010 and the aforementioned tax on cigarettes on or before June 30, 2010, and specifies that such tax shall be paid by the manufacturer, jobber, importer, distributor, wholesaler, or retailer (Sec. 2).

• Increases the tax rate on tobacco products, other than moist snuff, from 35 percent to 86 percent of the manufacturer's sales price from July 1, 2010 through June 30, 2010 (Sec. 3).

• Requires the tax rate on tobacco products, other than moist snuff, be adjusted every third state fiscal year after fiscal year 2010-2011 to equal to the greater of the following (Sec. 3):
• The tax rate for the preceding state fiscal year; or
• 0.05 cents plus the average tax rate imposed by other states, except for Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and Virginia (rounded to the nearest 1,000th of 1 cent), and multiplying such amount by the tax rate for tobacco products, other than moist snuff, for the fiscal year that ended the day before July 1.

• Increases the tax rate on moist snuff from $0.75 to $1.83 per ounce from July 1, 2010 through June 30, 2010 (Sec. 3). -Requires the tax rate on moist snuff be adjusted every third state fiscal year after fiscal year 2010-2011 to equal to the greater of the following (Sec. 3):
• The tax rate for the preceding state fiscal year; or
• 0.05 cents plus the average tax rate imposed by other states, except for Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and Virginia (rounded to the nearest 1,000th of 1 cent), multiplied such amount by the tax rate for tobacco products, other than moist snuff, for the fiscal year that ended the day before July 1, and multiplied by the tax rate for moist snuff for the fiscal year that ended the day before July 1.

• This is a substitute bill sponsored by Rep. Paul Ray.

Full Bill Text