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Maryland legislature considered many tax increases

Maryland Reporter
April 22, 2015

See full article here

Excerpt: Tobacco Tax

Some lawmakers argued the “Tobacco Tax,” or the “Healthy Maryland Initiative,” was actually a “public health issue” and not necessarily a tax “for spending.” The bill died in committee.

“(We should) increase prices for tobacco to drive down the usage,” said Bill Sponsor Bill Sponsor Sen. Richard Madaleno, D-Montgomery. “A constitutional majority of the House and the Senate have both pledged to stand with this bill. We have people on record, more than enough to raise the tobacco tax by one dollar.”

The bill would increase the current tobacco tax from $2 to $3 a pack, while also increasing the wholesale taxable price on Other Tobacco Products (OTPs) from the current 30% to 76%.

This equals out to $95.3 million in general fund revenues for fiscal year 2016.

Fred Parsons of the George J. Falter Company, a company that supplies convenience stores in Maryland, said during the committee hearing, “When all the (tobacco) taxes started increasing, we started to pursue business in Virginia, Pennsylvania and in Delaware because that’s where the sales went.”

Parsons along with the Maryland Association of Retailers felt SB 37 would accidentally increase black market sales of tobacco products and also drive honest business owners out of Maryland.

However, in Szeliga’s words the bill “never saw the light of day,” and was “stuck” with its sister bill in committee.

“We’ll be back again next year making that push,” said Madaleno. “Hopefully Gov. Hogan will view it, as many of his Republican colleagues across the country are, as an important public health measure.”

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