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Town takes look at 25-cent cigarette tax / June 13, 2018

Looking for a new source of revenue to support town operations, members of Chase City Town Council held a first reading Monday night on an ordinance to levy a local cigarette tax.

If it goes ahead with a proposed 25-cent excise tax, Chase City will follow the lead of the Town of South Hill, which last year enacted a 15 cent levy on the sale of cigarettes. The Town of South Boston is also currently considering a new cigarette tax.

In a discussion of the proposal, Mayor Eddie Bratton noted, “South Hill has realized considerable revenue from their cigarette tax well in excess of their expectations,” though Bratton said he did not expect the same results in Chase City because the town does not have the same commercial opportunities for the sale of cigarettes.

According to information supplied to Council members by Town Manager Angela Lawrence, many localities in addition to South Hill have passed such a tax to boost local government revenue. Based on the limited information she received from distributors, Lawrence projected that a 25 cents-per-pack levy could increase revenue for the town by $50,000 yearly.

Lawrence noted there is a risk with the new tax that people will go outside town limits to purchase their cigarettes, and therefore Chase City could lose sales tax revenue from the sale of gas and convenience store purchases. However, she noted, most towns that have implemented a cigarette tax find the drop-off in business to be short-term.

A public hearing on the ordinance will be held before Town Council schedules a final up-or-down vote on the proposal.

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