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January 30, 2015

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Lawmakers debate tax hike on cigarettes, alcohol to raise revenue

CARSON CITY – The tax on a $10 cigar would rise from $3 to $5.50 under a bill debated in the Nevada Legislature on Tuesday.

The tax on a bottle of wine would inch up 6 cents, according to Assemblywoman Peggy Pierce, D-Las Vegas, who has introduced a package of bills to raise taxes.

Pierce told the Assembly Taxation Committee that Nevada is in its worst economic situation in 70 years and there are major cuts in education and other social services that she couldn't support.

“The state will be devastated if we do not raise revenue,” Pierce said.

She got support from a variety of health groups, including the American Lung Association, the American Heart Society, March of Dimes, Nevada Cancer Institute and the American Cancer Society.

But representatives from convenience stores, cigar businesses, and the cigarette and liquor industry argued such a tax hike would result in lower collections of revenue and hurt the economy.

Michael Frey testified he operates six stores that sell cigars in Las Vegas. If this tax is passed, he testified he would have to close four of the stores and lay off 35 of his 50 employees.

Peter Krueger, representing convenience stores and cigar businesses, argued that when taxes are raised, the tax revenue actually declines. He said such a tax hike would result in an "Internet black market" of cigarettes and liquor.

He acknowledged Nevada might need increased revenue and he said he would back a tax on services as long as it is not filled with exemptions.

Amy Bealieu of the American Lung Association said the proposed 80 cent increase on a pack of cigarettes would bring in an additional $63.4 million a year in taxes, while the proposed hike on other tobacco products would produce an additional $5.8 million.

Committee Chairwoman Marilyn Kirkpatrick, D-North Las Vegas, said Assembly Bill 333 would generate $235 million over the next two fiscal years.

Tom McCoy of the American Cancer Society said the last time cigarette taxes were raised was in 2003. An increase would mean a reduction in smoking, he said.

Other health representatives argued it would cut down on teen smoking and cut medical costs in Nevada.

Assemblyman John Ellison, R-Elko, suggested an increase in liquor taxes would have a big effect on the casino industry, where resorts sometimes give free drinks.

But Pierce noted that no casino representatives appeared at the Legislature to testify.

AB333 would raise the tax on a pack of cigarettes to $1.70 and the tax on hard liquor would increase from $3.60 to $4.50 per gallon. The tax on wine would jump from 70 cents to $1 per gallon; the beer tax would rise from 16 to 25 cents a gallon and cordials would be raised from $1.30 to $1.75 per gallon.

The committee didn't take action on the bill.

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  1. Remember the tobacco lawsuit? The one that was going to cover the health care costs in Nevada? The one they did not use for Health Care costs?

    Keep going after the sin taxes and when people stop sinning who is going to pay those bills?

    Be sure to thank smokers when you get the scholarship for your kid to go to UNLV. ;-)

  2. "The tax on a $10 cigar would rise from $3 to $5.50 under a bill debated in the Nevada Legislature on Tuesday."

    I'm an avid cigar smoker and this is exactly why I order all my cigars online from a Florida company instead of buying them at a local cigar store.

    The dirty little secret is it's the politicians who are the tobacco tax revenue!

    I'm not sure what they would do if everybody gave up alcohol and tobacco....but I guarantee you they would NOT be celebrating.

  3. Why not raise the sales tax 1/4% and let everyone pay their fair share ?

  4. Lawmakers always want to go after smokers and drinkers, but the sea-cows keep getting a pass. It has now been said that about 20% of the population are smokers (1 out of 5 people) and 67% of the population are either overweight or obese (more than 3 out of 5 people).

    It would seem to me that you would have a much broader target going after junk food, rather than to keep piling on more taxes on tobacco and alcohol; wouldn't you think?

    Lawmakers justify their position by stating tobacco causes all kinds of dreaded diseases, which is true and by taxing it, will deters smoking and that is good for the health of the country and generates revenue, etc. but obesity is just as dangerous to the health of the country and is also a huge burden to healthcare costs. Obesity causes diabetes, heart disease, circulatory diseases such as hypertension, strokes, heart failure, etc. So to be fair, why isn't the government taxing junk food, like they tax tobacco and alcohol?

  5. Chunky says:

    We have enough taxes on everything; what we need is less spending!

    Our taxes are already overburdened with expenses created by people with unhealthy habits and lifestyles. But more importantly the addiction to government programs, support and handouts has to stop.

    Cut expenses across the board, balance the budget and then require that all new taxes and programs be approved by the voters.

    The majority of our populace voted for candidates who promised fiscal responsibility and that is what they expect. Nobody ever said it would easy!

    That's what Chunky thinks!

  6. What is Pierce thinking? Why is she not addressing the lack of taxes paid by big business, casinos and mining? She can say goodbye to her next campaign.

  7. Chunky asks:

    How do you tax obesity? It's definitely costing billions in healthcare expenses but Chunky isn't chunky so he has no idea how a fat tax would work. Besides Chunky says NO NEW TAXES!

    That's what Chunky thinks!

  8. The old sin tax. Ah yes. And when no one buys tobacco? Hike liquor taxes. And when no one buys liquor? Raise the gas tax? And when no one buys gas? Tax whatever 'sin' you can.

    I gave up smoking long ago and don't drink enough to bother, but, just because of nit wits like those who feel compelled to tax the very lives of others. Some of us will refuse to pay these onerous and unreasonable taxes. We will find a way to legally avoid these abuses of Americans and America.

    They spent and spent and spent and didn't prepare for the inevitable downturn and now they have to tax, tax and tax some more. Some of us remember the difference between government and private citizens and who works for who.

    I may just bring in some cigars and alcohol from other lower tax states, for personal use only. It can be done legally. I have no urge to smoke or drink but a good glass of scotch and a good cigar on my patio, all free from unjustified and abusive taxes will sure feel good.

    And they wonder where the Tea Party came from. Same place it did 236 years ago. I'm an independent with no affiliation to the Tea Party but that may change. And my wallet may open up to fight the anti-American tax and spend crowd.

  9. Look guys, higher taxes are coming and you will not be able to stop them. We have two wars going on and the Chinese to pay back. Don't buy in to the pretend war between the Democrats and Republicans.

  10. How about a tax on breathing? Using up air everyday should be taxable..Runners would have to pay double because they breath more per minute..

  11. There's such a huge underground black market in this city, it's ridiculous! I was at Cox cable on Rancho and was ASTONISHED at how many people were paying their monthly bill in cash. Hmmm, maybe they don't want Uncle Sam to get his cut of unreported income?

    Let's identify some black market items that can legalized, e.g. marijuana, then slap a sales tax on it like everything else we already have. The deficit may not be eliminated, but it will increase the state's income and maybe put a few lowlife scumbags out of business.

  12. Here is another source of revenue no one wants to talk about but would solve Nevada's money problems for the foreseeable future...Yucca Mountain Nuclear Waste Repository.

    Everyone is so worried about the radiation leaking. Give me a break! It's right there near the Nevada Test Site, the most radiated place in America already. Why not have the Feds re-open the dump and start transporting America's nuclear waste there? Then have the Feds pay Nevada big bucks just like the Alaskan Pipeline? But no that's a big political no no. Pinky won't like that idea.