AN ACT to amend Tennessee Code Annotated, Title 67, relative to taxation.
The bill proposes to raise the tax on each cigarette from three cents to eight and thirty-five hundredths cents. Furthermore, it seeks to increase the existing tax on tobacco products from 6.6% to 17%. Simultaneously, the bill plans to exempt food sales from the sales tax, thereby ensuring that the total tax burden does not increase for hardworking families. This dual approach is designed to enhance public health by discouraging tobacco use while making food more affordable, providing a balanced solution to the taxation issue.
Senate Bill 1522 aims to amend Tennessee's tax code in relation to tobacco taxation and food sales tax. The bill recognizes the significant healthcare costs associated with tobacco use, which are estimated to be around $2.67 billion annually in Tennessee. It addresses the burden that smoking places on taxpayers, indicating that each household bears an average cost of $1,116 each year due to smoking-related government expenditures. By increasing the tax on cigarettes and certain tobacco products, the bill proposes to reduce overall tobacco usage, furthering the health of Tennesseans and subsequently lowering healthcare costs related to smoking.
While supporters may praise this bill for its public health implications, there are potential points of contention among legislators and the public. Advocates for public health may welcome increased tobacco taxes as a means to decrease usage and improve health outcomes. However, opponents might argue that raising tobacco taxes disproportionately affects low-income individuals who rely on tobacco, leading to concerns about equity and accessibility. There could also be concerns about how these tax changes could affect local businesses that sell tobacco products or how they could influence tobacco sales trends within the state.