Increases the state excise tax on certain tobacco products (OR +$283,000,000 GF RV See Note)
Impact
The passage of HB 574 is expected to have considerable financial implications for the state, likely generating an estimated $283 million in additional revenue. This revenue increase could be directed towards public health initiatives, potentially offsetting costs related to smoking-related health issues. However, critics argue that such steep tax increases could lead to increased illegal trade and smuggling of tobacco products as consumers seek cheaper alternatives. Additionally, the bill's repeal of various discounts may place extra financial pressure on tobacco dealers and related industries.
Summary
House Bill 574 proposes significant increases in the state excise tax on tobacco products, including cigars, cigarettes, smoking tobacco, and smokeless tobacco. It aims to adjust the tax rates dramatically, with the tax on cigars invoiced at $120 per thousand rising from 8% to 68% and cigarettes increasing from 36 cents to $1.41 per pack. Similarly, the tax on smoking tobacco is proposed to rise to 68% of the invoice price, along with the tax on smokeless tobacco. The bill also repeals existing discounts related to alcohol and hazardous waste disposal taxes, alongside specific deductions for tobacco dealers.
Sentiment
The sentiment surrounding HB 574 is mixed. Proponents, particularly public health advocates, view the increased taxes as a necessary step towards reducing tobacco consumption and improving public health outcomes within Louisiana. They argue that higher taxes have been proven to deter smoking, particularly among younger populations. Conversely, those opposing the bill express concern over its impact on businesses and the potential for increased illicit market activity. The stark increase in tax rates is seen as excessive and may disproportionately affect low-income individuals who use tobacco products.
Contention
Notable points of contention include the potential economic ramifications for tobacco dealers and the risk of an underground market flourishing in response to the high taxation. Additionally, the effectiveness of such a tax increase in curbing smoking rates remains debated. Opponents are particularly concerned about the lack of consideration for the revenues lost by dealers who might be forced out of business by the added financial burden of these taxes and the repeal of advantageous discounts.
Continues a portion of the excise tax levied on cigarettes in statute and authorizes a reduced excise tax rate on certain tobacco products (OR DECREASE GF RV See Note)
Removes the sunset on a portion of the tax levied on cigarettes and increases the tax on cigars, cigarettes, smoking tobacco, and smokeless tobacco (OR +$121,900,000 GF RV See Note)
Relating to regulation of certain conduct by discount health care program operators, or concerning discount health care programs, that relates to prescription drugs or prescription drug benefits; authorizing administrative and civil penalties.
Relating to regulation of discount drug card program operators; authorizing administrative and civil penalties; authorizing fees; expanding a registration requirement.
Requiring economic development electric rate discounts offered by public utilities to cover the incremental and variable costs to serve customers that receive such a discount.