Senators look to improve cigar tax collections
By WALTER C. JONESMorris News Service
ATLANTA — More than a dozen lobbyists for retailers and tobacco companies argued Tuesday before senators considering whether to seek an estimated $15 million or more in improved tax collections by changing how cigars are taxed.
The Department of Revenue testified before the Tax Collection Technology Subcommittee of the Senate Finance Committee that 7-23 percent of tobacco sold in the state is not taxed as required by law. That’s because cigars are usually sold separately, unlike cigarettes and chewing tobacco which come in packages that carry a tax stamp.
“If you are buying from another state with a lower tax than Georgia, then you are scamming the system,” said Sen. Hardie Davis, D-Augusta.
But that’s all the witnesses agreed on.
Lobbyists for retailers and wholesalers that mostly market just in Georgia advocated some type of digital stamp on individual cigars. They figure their sales will increase when the crooks aren’t competing with them.
But lobbyists for wholesalers who distribute in multiple states objected that requiring them to stamp cigars would increase their costs and wouldn’t be effective anyway.
“This is additional regulations on these businesses,” said Bruce Bowers, lobbyist for the Southern Association of Wholesale Distributors. They argued for more tax auditors instead.Meanwhile, smoking opponents call for both the individual stamps and added auditors.Subcommittee Chairman David Shafer, R-Duluth, predicted his committee would yield to the administration.
“The action has to be at the Department of Revenue level,” he said.
Also, any tax legislation has to begin in the House of Representatives. Smoking foes are hoping there will be a bill because it could be amended to include a one-dollar increase in the cigarette tax they have been pushing for years as a way to raise money for medical treatment and discourage cash-strapped teens from buying enough packs to pick up the smoking habit.
