Sales Tax News Week of February 23
Sales Tax Increases on Cigarettes and Fireworks
Do you “light up”? If so, you should know that this week, several locations are looking to increase your taxes. We don’t just mean cigarettes either! Take a look:
- West Virginia – Lawmakers in West Virginia are looking at ways to offset the costs of smoking. Unlike most states, smoking has not decreased in WVa in over 10 years. The new tax on cigarettes would increase gradually, but the end result is an additional $1.00 per pack. Some of the money raised would fund programs for substance abuse and for workforce development. The bill was introduced by Senate Minority Leader Jeff Kessler.
- Illinois – Senator Chapin Rose, with an interesting sense of irony, suggests Illinois begin to allow the sale of consumer fireworks, which are currently not sold in the Hawkeye State. His bill, SB 1661, would allow the sale of personal fireworks and impose an additional 3.75% sales tax, which he believes will result in a revenue increase of between $10 and $15 million. Only 10 states do not allow the sale of consumer fireworks. So where’s the irony? The revenues would fund a fire prevention initiative.
- Louisiana – On a smaller level, Caddo Parish in Louisiana also wants to raise the cigarette tax. Or some of them do – the Commissioners were split on an opinion. Should they decide to pass it, the initiative must be approved by the Louisiana State Legislature before taking effect.
Sales Tax Breaks for Data Centers
While those states are potentially raising taxes, Nevada and North Dakota are discussing the creation of a tax break, specifically for data centers. Nevada’s Senate Bill 170 has been introduced, with the desired effect of continuing to attract technology companies and increasing related jobs. The bill would provide a partial reduction in sales tax and personal property tax for the next 20 years, provided the data centers meet certain requirements. Nevada already has an established datacenter market, including well-known facilities in Las Vegas and Reno, with another $1 billion Switch location in Reno whose primary client would be eBay. In contrast, North Dakota is just looking to get into the market, and to garner interest, its House Bill 1089 has already passed its House of Representatives. Its bill provides a sales tax exemption for equipment and software used by a qualifying data center – of which it currently has none.
Revenues are Up
Sales tax isn’t always bad news – two locales are reporting positive results for overall sales tax revenues. Columbus, Mississippi had anticipated a $300,000 budget deficit last year, but sales tax revenues are up by more than $176,000, six months into the city’s fiscal year. Likewise, Colorado Springs, Colorado is also reporting good news – a 7.5% increase in sales tax revenues for 2014 over the previous year. That’s the largest hike in a decade for the tourist town. The boon is attributed to better jobs and improved consumer outlook, as well as tourism generated by the USA Pro Cycling Challenge in August.
Alabama’s Sales Tax Holiday
The weekend of February 20-22 saw extreme weather condition in Alabama, but that didn’t stop the state’s emergency preparedness sales tax holiday weekend – if anything, it punctuated the need for citizens to stock items needed in case of emergencies. The holiday waives sales tax on items including batteries, flashlights, smoke detectors, lanterns, and first-aid kits. A complete list can be found at http://www.revenue.alabama.gov/salestax/WPHolidayQuickRefSheet15.pdf.