Sin taxes on booze, tobacco eyed by NV Legislature

By Sandra Chereb

Associated Press

Published: Tuesday, April 5 2011 3:50 p.m. MDT

Nevada Assemblywoman Peggy Pierce, D-Las Vegas, introduced a measure Tuesday, April 5, 2011, at the Legislature in Carson City, Nev., that would increase state taxes on cigarettes and alcohol.

Cathleen Allison, Associated Press

Enlarge photo»

CARSON CITY, Nev. — Smokers and drinkers would pay higher levies to indulge their vices under two bills considered Tuesday by Nevada lawmakers.

Assemblywoman Peggy Pierce, D-Las Vegas, said the goal of AB333 is to raise badly needed revenue during the recession.

"We are suffering more deeply and longer than any other state in the country," Pierce said.

Pierce, who has four tax proposals in the Legislature, took aim at comments by Republican Gov. Brian Sandoval and the GOP that state government is too big.

"We could hire 10,000 government workers tomorrow and Nevada would still have the smallest government in the country," Pierce told the Assembly Committee on Taxation.

AB333 would increase the per-pack tax on cigarettes from 80 cents to $1.70

The proposed hike in alcohol taxes varies by alcohol percentage content, but the levy on hard liquor would jump from $3.60 to $4.50 a gallon.

Pierce said her proposal would add 6 cents to the cost of a bottle of wine. The 45-cent bump for a bottle of liqueur, she said, "is not going to stop you" from buying it.

Health advocates, including the American Lung Association, March of Dimes, and American Cancer Society, said raising tobacco taxes would decrease preventable deaths and deter young people from taking up smoking.

Jennifer Hadayia, public health program manager for the Washoe County Health District, said Nevada ranks third in the nation in adult deaths attributable to smoking, at 343 per 100,000 population.

The state ranks ninth in adults who smoke — 22 percent — and 20th in smoking among youth, at 10.2 percent.

Critics of the levies countered that instead of padding state coffers, people would cut back on their habits or buy the products on the black market or Internet.

Assemblyman Ed Goedhart, R-Amargosa Valley, questioned the motive of the tax increase.

"When you get into this public policy, a lot of it is about freedom of choice," he said. "To single out tobacco as an unhealthy activity, there's a lot of unhealthy activities out there."

Another tax bill, SB386, was considered by the Senate Revenue Committee. That measure would raise the cigarette tax to $2 a pack but does not hike taxes on alcohol.

No action was taken Tuesday by either the Senate or Assembly committees on the bills. Sandoval has said he won't raise taxes.

Retailers, distillery groups and tobacco lobbyists opposed both bills, as did sellers of premium cigars, who said the tax would up the cost of a high-price stogie by $1.50 to $3.00.

Keith Lee, representing the Distilled Spirits Council of the United States, said alcohol taxes already account for 54 percent of the purchase price of a bottle of booze, and that higher taxes would hit Nevada's tourism and hospitality industry particularly hard.

If higher taxes are imposed, sales of spirits could fall by 120,000 gallons; wine by 90,000 gallons; and beer by 340,000 gallons.

Sean T. Higgins, representing Terrible Herbst gasoline and convenience stores, said sales of beer, wine and cigarettes account for more than 50 percent of sales at its stores statewide.

"Over 60 percent of our customers ... purchase another item," he said, arguing that increases in sin taxes would lead to a decline in other purchases as well.

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