Barbour's Tax Study Commission on Tobacco

With all the back and forth on tobacco taxes, lets take a look at what Governor Haley Barbour's "Mississippi Tax Study Commission Report" said about tobacco taxes.

6.7 Tobacco Taxes

6.7.1 Increase the Taxes on Cigarettes - The excise tax on cigarettes is lower in Mississippi than most other states in the nation. (see Table 7 on next page, Source: Federal Tax Administrators) A number of proposed changes were submitted to increase this tax. The Commission recommends an increase in the excise tax from 18 cents to 50 cents per pack, which would reflect the average of the four adjoining states.

6.7.2 Create a New Tax to Provide Equal Taxation for All Cigarette Manufacturers - Create a new tax on all tobacco manufacturers and give credit against this tax for payments made under the settlement agreement in the State’s tobacco lawsuit. The burden of this new tax applies to manufacturers not participating in the Mississippi settlement agreement.

6.7.3 Maintain All Increases in Tobacco Taxes for General Fund Use - Any revenue increase should not be tied to a specific use or other recommendation, but should be general fund revenue.

6.7.4 Tax Smokeless Tobacco Based on Weight - Implement a unit excise tax based on weight.

And what did the man who holds the veto pen say recently?

“The preliminary figures I shared with the legislative leadership today are based on a least-change model that would make the fewest and smallest cuts for departments and agencies allowed under the stimulus rules as we understand them. I cautioned the leadership that these calculations are still subject to approval by the federal government in certain areas; in addition, these figures assume restoration of the $90 million hospital tax and a tax increase of 42 cents per pack on cigarettes, making a total state tax of 60 cents per pack. I hope the Legislature will also enact tax increases on smokeless tobacco products and non-participating cigarette companies.”