Tax Type
Local Taxes
Description
Town Authority to Tax Tobacco Products
Topic
Local Power to Tax
Local Taxes Discussion
Date Issued
06-18-1992
[Opinion - Virginia Attorney General: 1992 at 172]
REQUEST BY: Honorable Lewis W. Parker, Jr. Member, House of Delegates P.O. Box 120 South Hill, Virginia 23970
OPINION BY: Mary Sue Terry, Attorney General
OPINION:
You ask whether the Town of Clarksville may adopt a tax on tobacco products.
I. Applicable Statutes
Section 58.1-3840 of the Code of Virginia provides that, notwithstanding the general restrictions the state sales tax law imposes on local general sales taxes, "any city or town having general taxing powers established by charter pursuant to or consistent with the provisions of § 15.1-841 may impose excise taxes on cigarettes."
Section 15.1-841 provides: A municipal corporation may raise annually by taxes and assessments on property, persons and other subjects of taxation, which are not prohibited by law, such sums of money as in the judgment of the municipal corporation are necessary to pay the debts, defray the expenses, accomplish the purposes and perform the functions of the municipal corporation, in such manner as the municipal corporation deems necessary or expedient.
Section 39 of the charter for the Town of Clarksville authorizes the town council to levy taxes on "all the real estate within the said town which is not exempt from taxation, and on all such other property and subjects, subject to local taxation, not prohibited by law." Ch. 124, 1989 Va. Acts (Reg. Sess.) 176, 177.
II. Authority for Town Tobacco Tax Limited to Cigarettes
By its plain language, § 58.1-3840 preserves the authority of cities and towns to impose excise taxes on the sale of cigarettes if their charters either adopt by reference the taxing powers granted in § 15.1-841 or contain other language consistent with the latter section that makes a broad grant of taxing powers. See 1972-1973 ATT'Y GEN. ANN. REP. 378, 379 (interpreting former § 58-757.27 not to authorize counties to tax cigarettes without some other statutory authority comparable to city charter provision granting broad taxing powers). In my opinion, the language in § 39 of the Clarksville charter authorizing that locality to tax "all such other property and subjects . . . not prohibited by law" is both consistent with § 15.1-841 and sufficiently broad to authorize the taxing of cigarettes, as contemplated by § 58.1-3840. 1989 Va. Acts, supra, at 177.
Another prior Opinion of the Attorney General, however, concludes that former § 58-757.27, recodified as § 58.1-3840 (see Ch. 675, 1984 Va. Acts 1178, 1448), permits city and town excise taxes only on cigarettes, and not on "little cigars, cheroots, stogies [or] cigars.'" 1970-1971 ATT'Y GEN. ANN. REP. 392, 393 (quoting former § 58-757(6), defining tobacco product). I am further of the opinion, therefore, that the Town of Clarksville may adopt an excise tax on cigarettes, but not on other tobacco products.
Attorney General's Opinion