Tobacco taxes-2.

05LSO-0298.C1

                                                         

FISCAL NOTE

 

 

FY 2006

FY 2007

FY 2008

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase (Decrease):

 

 

 

GENERAL FUND

(2,340,000)

(2,390,000)

(2,460,000)

WYO TOBACCO SETTLE INCOME

4,540,000

4,630,000

4,760,000

 

Source of revenue increase (decrease):

 

100 percent increase in the tax on other tobacco products. Redistribution of existing tax on other tobacco products from the General Fund to the Wyoming Tobacco Settlement Trust Fund Income Account.

 

Assumptions:

 

Revenue increase is based on the increase in tax offset by a reduction in consumption provided by a study provided by the American Heart Assn. The study claimed that for every 10% increase in sales price of a tobacco product, consumption dropped by 3.7 %. The average increase in price of the product based on a 100% increase in tax is 17%.  A 17% increase in price would reduce consumption by 6.29% based on their study. This resulted in an estimated tax increase of $1,999,500 based of FY 2004 taxes collected. This estimate was then projected forward using January 2005 CREG estimates.

 

Sales tax collections would also increase but that amount is indeterminable as the other tobacco tax is collected on wholesale purchases of the product.

 

This bill changes the current distribution of tobacco tax on other tobacco products from the General Fund to the Wyoming Tobacco Settlement Trust Fund Income Account. This estimated decrease is based on FY 2004 actual collections, projected forward using January 2005 CREG estimates.

 

 

Prepared by:   Dean Temte, LSO    Phone:   777-7881

(Information provided by Dan Noble, Dept. of Rev.; phone 777-5220)