• April 21, 2024

‘Smoking fee’ ruled out

 ‘Smoking fee’ ruled out

A law passed by the Oklahoma legislature with the dual purpose of raising revenue while serving as a smoking-cessation tool has been ruled unconstitutional by the state Supreme Court, according to a story by Richard Craver for the Winston-Salem Journal.

The court’s ruling said, in part, that the smoking-cessation tax was part of an attempt by the Oklahoma legislature to generate new revenue streams to help meet the constitutional mandate to balance the state budget. The state has been dealing in recent years with a declining recurring tax revenue.

Four bills were introduced in the Oklahoma House that listed the $1.50-per-pack levy as a tax.

Their insertion into Senate Bill 845, however, switched the terminology from tax to smoking-cessation fee even though just $1 million of the $225 million in revenue would have been used to discourage tobacco usage among your people.

SB845, which was passed on May 26, was pitched as a way of encouraging smokers to lower, if not eliminate, their consumption of traditional cigarettes by making cigarettes more expensive.

Legislators sought the $225 million in revenue from SB845 as a last-minute strategy to meet the state Constitution’s balanced budget mandate, the court said. It would have been the largest amount of new recurring revenue passed by the legislature during the 2017 session.

The court said the legislature faced a ‘constitutional conundrum’ of whether to violate the constitution with passage of SB845 or violate the balanced budget mandate.

‘None of this is to say that the legislature cannot choose this particular sort of regulatory tool – a sin tax – to further its goal of reducing smoking,’ the court said.

‘But the enormity of the revenue generated by SB845, when contrasted with the (minimal) sums earmarked for smoking cessation programs, and the scant inclusion of any other regulatory function in the bill, compels the conclusion that the generation of revenue for the support of state government was the measure’s primary purpose,’ the justices said.

The approval of the $1.50-per-pack increase was challenged by Reynolds American Inc, Philip Morris USA and several convenience stores, wholesalers and smokers.

The law was set to go into effect in late August.

The state has until Thursday to file a petition for rehearing.

Craver’s story is at: http://www.journalnow.com/business/business_news/local/oklahoma-supreme-court-rejects-per-pack-smoking-cessation-fee/article_49d41e75-6171-58a5-80fb-b0566b37b077.html.