Tobacco excise tax.

09LSO-0142.C1

FISCAL NOTE

	FY 2010	FY 2011	FY 2012
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase:
GENERAL FUND	819,000	819,000	819,000

Source of revenue increase:

Change in the excise tax on moist snuff from a tax based on the wholesale value to a tax based upon net weight.  Excise tax on moist snuff would be $.60 for any amount up to 1 ounce, plus a proportionate tax at $.60 per ounce on any fractional parts of more than 1 ounce

Assumptions:  

Assumed moist snuff represents 80% of other tobacco products market. 

Assumed that 4,787,000 units of moist snuff were sold in 2008 (based on previous figures for 2006 provided by the industry, and the increase in other tobacco products sold in the two years since those projections were provided). 

The three tiers provided by the industry in 2006 are used to determine the wholesale prices and the market share of each tier. 

The difference between the ad valorem-based tax and the unit-based tax are compared to determine the increase in tax revenue from the bill. 

The tax revenue increase is assumed to remain constant, based on the assumption that consumption may either remain constant or decrease.

Prepared by:   Dan Noble, Dept. of Revenue Phone: 777-5220