Alabama Senate Committee Okays Higher Cigarette Tax

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Alabama Senate Committee Okays Higher Cigarette Tax

MONTGOMERY, Ala. -- The Alabama state tax on cigarettes would rise by 20 cents per pack on name brands and jump by 60 cents per pack on less-expensive generic cigarettes under a bill passed by a Senate committee, reported the Birmingham (Ala.) News.

A pack-a-day smoker would pay $73 more per year for name brands such as Winston, Marlboro and Salem, and $219 more per year for generic cigarettes.

The Senate Finance and Taxation-General Fund Committee voted 14-2 for the tax plan, which would raise an estimated $80.5 million a year.

The tax increase would be lower on name-brand cigarettes because their makers pay Alabama a total of about $100 million a year as part of a national tobacco lawsuit settlement. Makers of generic cigarettes don't make settlement payments to Alabama.

The bill will go to the Senate floor today.

The Senate also voted 67-24 for a bill to raise state taxes for one year only on the market value of all oil and natural gas pumped from Alabama, to raise an estimated $10.5 million next year. The tax rate would rise 1 percent on offshore natural gas wells and 0.5 percent on land-based oil and gas wells.