The Senate Local Government & Tax Committee voted this morning to amend the bill extending Idaho’s cigarette tax rate of 57 cents a pack for two more years. Without the bill, the rate would drop back down to 28 cents a pack.
Senators want to consider making the rate permanent. But that’s not the only amendment that could be in the works. Anti-cancer advocates told the committee this morning that Rep. Jim Clark’s bill lowers the distribution to two health funds by one percentage point each, and that change would lose them just enough money that they’d lose their federal grants – worth over a million dollars. They want the point added back in.
And Jerry Deckard, a lobbyist for tobacco wholesalers, told the committee that his industry wants its 2.61 percent cut for the cost of affixing tax stamps on cigarettes to be raised back up to 5 percent, its level before the tax increase two years ago. “We believed at that point in time it was appropriate for everyone to share in the pain,” Deckard told the committee, but no more. “We think we’re due.”
The only problem with that: The reason the percentage was lowered was to keep the wholesalers’ revenue even, as the tax rate nearly doubled. Clark, R-Hayden Lake, said by his calculations, kicking the wholesalers’ cut back up to 5 percent would give them “about a million-dollar windfall” – and that’s per year. His House bill as originally drafted didn’t mention the wholesalers’ rate, and House GOP Caucus Chairman Julie Ellsworth, R-Boise, caught the omission and wrote it into the bill before it was introduced to avoid handing an extra million dollars a year in state money over to the wholesalers.
After hearing from Clark, the Senate committee wasn’t looking very excited about Deckard’s pitch, but any senator can offer amendments to the bill when it comes up for amending. Some still want to use the bill to lash out at Indian tribes by attempting to tax reservation sales. The bill could be amended in the Senate as soon as this afternoon.