Albemarle County will tax cigarettes at 40 cents per pack starting Jan. 1.
The county’s Board of Supervisors voted unanimously Wednesday night to approve a 40-cent tax rate on cigarettes.
State law changed in 2020 to allow counties the option to levy new taxes, similar to cities’ longstanding taxing authority, including adding a local cigarette tax. Counties can implement a maximum rate of 40 cents per pack.
“Because I am a retired nurse and a retired educator, I see the damage that tobacco does to both our young people, and to adults,” Supervisor Diantha McKeel said. “I’m a former smoker myself — I quit probably 40 years ago — but I understand how hard it is to stop smoking.”
During the public hearing, Sid Patel, owner of Tobacco 4 Less, said the pandemic was a bad time to implement a cigarette tax, and that this will hurt small businesses.
“I understand, from your point of view … that that money may be a lot of revenue for the county, but on the other side, it’s going to kill a lot of small businesses at the same time,” he said.
He said retailers are also seeing increases in costs from cigarette manufacturers.
Supervisor Liz Palmer asked for clarity around studies that were referenced around whether taxing cigarettes actually increases or decreases smoking.
She mentioned an equity impact assessment by the county’s Office of Equity and Inclusion, where county staff noted that those most affected by the adoption of a cigarette tax will be people who are low-income, those who are Black, indigenous or persons of color and those experiencing severe mental illness and substance abuse disorders.
The report from staff at the time also noted that increasing cigarette taxes has shown some decrease in smoking rates, with the greatest proportion of that occurring in younger populations. However, the decrease is least among lower income individuals.
“The reason for this tax, in my understanding, is that it’s to generate revenue and also in hopes that it would deter smoking on some level,” she said. “I do think it might be, at some later date, good to get some clarity on some of those studies, just so we’re aware.”
McKeel said she was also supportive of the tax in hopes that it will help stop small brush fires.
“We’re having to send fire trucks to stop brush fires from cigarettes being flipped out of windows,” she said.
Supervisor Ann H. Mallek said as someone who sends sales tax revenue to the Department of Taxation for selling beef, this is something that business people are used to doing all the time.
“I do not think that this will be an undue burden for sellers,” she said.
In September, the Albemarle’s board became the first body in the region to vote to join the Blue Ridge Cigarette Tax Board, which will manage the administration of its potential cigarette tax ordinance. Since then, Greene, Fluvanna, Nelson, Orange, Madison and Augusta counties and the city of Charlottesville have all approved ordinances to join the cigarette tax board.
Charlottesville has the highest tax rate of the member localities at 55 cents per pack, while, so far, Augusta has the lowest at 15 cents per pack.
The cigarette tax board will start meeting Oct. 26 and the Thomas Jefferson Planning District Commission will manage the board. Jian Lin, Albemarle’s chief of revenue administration, will serve as the county’s representative on the board.
David Blount, the TJPDC’s deputy director and legislative director, said the board will also be doing compliance, enforcement and education.
“I think, particularly in the initial startup of the new tax in the region on cigarettes, there will be a lot of education and awareness among retailers and the community at large that we want to do,” he said.
According to TJPDC estimates, the one-time costs for the cigarette board would be about $212,650 for technology and equipment, a vehicle for enforcement, a reserve and other startup costs, which would be split among the involved localities.
In the first year, which would only be six months of the current fiscal year, ongoing costs are estimated to be about $98,240. That total covers salaries and benefits for two staff members, mileage, a parking pass, other vehicle costs and other indirect costs. Ongoing costs in other fiscal years would be about $196,480.
TJPDC is currently looking at hiring a part-time person for enforcement, Blount said.