2023 Session

Budget Amendments - SB800 (Member Request)

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Chief Patron: Petersen
Cigar Tax (language only)

Item 3-5.21 #1s

Item 3-5.21 #1s

Adjustments and Modifications to Tax Collections
Cigarette Tax, Tobacco Products Tax and Tax on Liquid Nicotine


Page 654, line 17, after "date."  insert:

"Notwithstanding any other provision of law, the tobacco products tax imposed under § 58.1-1021.02 of the Code of Virginia shall be imposed on cigars at the rate of 10 percent or 30 cents per cigar, whichever is less, beginning July 1, 2023 for taxable sales or purchases occurring on and after such date.".


(This amendment imposes a 10 percent tobacco products tax on cigars. Cigars are currently taxed at 20 percent of the manufacturer's sale price. This results in a revenue reduction of $12.1 million each fiscal year to the Health Care Fund. Health Care Fund revenue is used as the state match to Medicaid; therefore, a companion amendment backfills Medicaid by $12.1 million GF for the state match to Medicaid.)