ATLANTA – After years of failing to gain traction in the General Assembly, efforts to raise Georgia’s tobacco tax could get a boost this year from the budget crunch facing state lawmakers.
The legislature passed a bill early in the 2020 session to tax online purchases made through such “marketplace facilitators” as Amazon and Google. Supporters cited the need for more revenue to help offset sluggish state tax collections threatening to force painful spending cuts.
The revenue grab could move next to tobacco products. Legislation before the Georgia House of Representatives would increase the state’s tobacco tax, the nation’s third lowest, from 37 cents per pack of cigarettes to $1.87.
That higher rate, which would move Georgia’s tobacco tax above the national average, would generate $425.2 million a year in new revenue for the state, said Andy Freeman, government relations director for the Atlanta-based American Cancer Society’s Cancer Action Network.
“Resolving the budget deficit and addressing the highest tobacco use rate in 20 years … would mark a major health and fiscal win for our state,” Freeman said.
Rep. Ron Stephens, R-Savannah, the bill’s sponsor, said reducing demand for tobacco products by raising the tax also would yield huge savings.
“We’re spending half a billion dollars a year in Georgia to treat smoking-related illnesses,” Stephens said. “That’s coming out of taxpayers.”
A recent poll conducted by the Georgia Budget and Policy Institute found 80% support among voters for increasing tobacco taxes.
Charles Bullock, a political science professor at the University of Georgia, said the tobacco industry doesn’t enjoy the political influence it once had in the Peach State when more farmers grew the crop and tobacco auctions in rural communities drew large crowds.
“Tobacco has lost its clout. Rural Georgia has lost its clout,” he said. “With each census, more [legislative] seats get shifted out of rural Georgia to metro Atlanta.”
Bullock said the tight budget is another factor building support for raising tobacco taxes.
“A number of legislators seem to be trying to push back against [Gov. Brian Kemp’s] cuts,” Bullock said. “They’re thinking, ‘If we can find more revenues, we can protect programs we feel are important.’ ”
But Rep. Bret Harrell, chairman of the tax-writing House Ways and Means Committee, said he doesn’t believe there will be enough support in the General Assembly this year to raise the tobacco tax.
“There is demand for the product and retailers who sell the product, and it’s legal,” said Harrell, R-Snellville.
But Harrell doesn’t oppose increase tobacco taxes under any circumstances. He put together a proposal two years ago to raise the state tax on cigarettes to 62 cents per pack, based on the tobacco tax rates in neighboring states.
“It would not unduly advantage or disadvantage our border retailers,” he said.
But Harrell said the only tobacco tax bill lawmakers are likely to pass this year would impose an excise tax on vaping and e-cigarettes. Georgia has no excise tax on those products now, and the rapid growth of vaping is driving an increase in nicotine use that had been on the decline.
Rep. Bonnie Rich, R-Suwanee, has introduced a bill that would tax vapor devices and consumable vapor products at 7%.
Bullock said there’s a good reason a tax on vaping might find favor with the politicians under the Gold Dome.
“Vaping is much more of a young people’s pursuit,” he said. “Young people don’t vote.”
AT A GLANCE
Georgia’s tobacco tax is the third lowest in the nation:
State Cigarette tax per pack
Missouri $0.17
Virginia $0.30
GEORGIA $0.37
North Dakota $0.44
North Carolina $0.45
Idaho $0.57
South Carolina $0.57
Kentucky $0.60
Wyoming $0.60
Tennessee $0.62
Source: Tax Foundation