31 Dec

Senate Finance raises tobacco tax by 80 cents, restores cloud moratorium

first_imgby Anne Galloway May 7, 2013 vtdigger.org In a 7-0 voice vote on Tuesday, a Vermont Senate panel approved an 80 cent tobacco tax increase. Lawmakers initially considered a $1.25 placeholder tax that Sen. Tim Ashe, chair of the Senate Finance Committee, described as a health care bill not a tax measure.Advocates say the tipping point for smokers who are having trouble kicking the habit is a 10 percent increase, and 80 cents is roughly that percentage. The tax increase would also apply to snuff.The hike was added to H.107, a health care insurance bill that includes provisions regarding the states new health care exchange under the Affordable Care Act.The House approved a 50-cent-per-pack additional tax on cigarettes in the miscellaneous tax bill.Its not clear at this point how the tax conference will resolve the differences between the House and Senate versions of the tobacco tax. The miscellaneous tax bill passed both the House and Senate; the health insurance bill has yet to be approved by the Senate.Ashe has said the tax is designed to curb tobacco use, and so it is more appropriate to attach it to a health care bill. Though it would generate roughly $8 million for the state in additional revenue, he says the impetus for pursuing the assessment is related to encourage healthier behavior its not just about raising money.Gov. Peter Shumlin is opposed to any increase in the tobacco tax. He says its too soon to raise the tobacco tax; the state passed a 38-cent hike two years ago.The panel also restored a moratorium on the cloud tax that extends gives software companies a 10-year pass on the sales tax. The moratorium provision begins in 2006 and ends in 2016, effectively extending retroactive forgiveness to companies that could be subject to the 6 percent assessment.last_img

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