Tobacco tax in IOW?

Published 10:51 am Saturday, November 28, 2009

ISLE OF WIGHT—As the county prepares for the shutdown of its largest taxpayer, Isle of Wight is looking for ways to recover some of the lost revenue, including a tax on tobacco products.

“We need it certainly now more than ever,” said Delegate William Barlow (D-Smithfield).

However, the tax idea isn’t sitting well with some small-business owners.

“I think that’s going to hurt our business,” said Joel Bradshaw, who owns Bradshaw’s Country Store in Carrsville. He said the store benefits from the fact that the county doesn’t have a tobacco tax. Customers from as far away as Norfolk come in to buy tobacco products.

“That’s a big draw to our store,” he said. “When people buy cigarettes, they buy other things.”

State law currently prohibits all counties — except Fairfax and Arlington in Northern Virginia — from taxing cigarettes.

Barlow has introduced legislation in the General Assembly several times that would allow all counties to levy cigarette taxes, just like Fairfax and Arlington counties, but the proposal usually dies before making it to the House floor for debate.

“Any and all counties should have the same authority as those two counties,” Barlow said, noting that all cities and towns in Virginia have the authority to tax cigarettes, “and have been doing so for many years.”

Carrsville District Supervisor Phillip Bradshaw — Joel Bradshaw’s brother — agreed. He said all of the surrounding cities and the county’s two towns — Smithfield and Windsor — already levy cigarette taxes. He said the idea isn’t new, but the county’s fiscal outlook, including the loss of four of its largest taxpayers, has intensified the need.

“We’ve been requesting that (tax) for years,” he said. However, the county is requesting that its representatives in the General Assembly support legislation not only for all counties, but also introduce legislation authorizing the tax specifically for Isle of Wight County in the upcoming session, but it won’t be easy.

Legislation applicable to the whole state requires a simple majority of the General Assembly, however, legislation specific to a jurisdiction requires the support of two-thirds of the members in the General Assembly.

“We still feel like we have a good chance,” Phillip Bradshaw said. “This is the time.”

Barlow said he plans to submit the proposal again this year, although he thinks it’ll still be difficult to get passed.

“I think it’s a matter of principle,” he said. “It’s better to tax cigarettes than to rely so heavily on real estate taxes on homes and businesses.”

Barlow said that he’s been a longtime supporter of efforts to “enable local government to diversify the tax revenue base,” so counties don’t have to be so dependent on real estate taxes.

Joel Bradshaw said that tobacco makes up a significant portion of all sales at his store, and the county could end up losing money if the tax is imposed.

“The county needs to start looking at ways to cut costs instead of increasing revenue,” he said, noting that education and public safety should be protected from cuts.

Phillip Bradshaw, who serves as the president of the Virginia Association of Counties, said the organization has long been pushing for equal taxing authority for counties. Currently counties are much more limited in their taxing abilities than cities and towns.

While Joel Bradshaw and other county business owners may be concerned about the possible tax, Phillip Bradshaw said it wouldn’t be an excessive fee.

“We’re not looking at killing the small businesses,” he said.

Barlow characterized the proposed tobacco tax as a “user fee” and said could have the secondary effect of improving the health of citizens.

“It would further discourage our young people from smoking,” he said.

Joel Bradshaw still isn’t convinced the tax is a good idea.

“The county has not thought this out,” he said. “It takes away our competitive edge.”