House OKs permanent 57-cent cigarette tax

BOISE – Legislation making Idaho’s 57-cent-per-pack cigarette tax rate permanent won final approval in the House on Monday on a 41-27 vote, and now goes to Gov. Dirk Kempthorne, who wanted the rate to be permanent when it first passed two years ago.

But at that time, lawmakers agreed to raise the cigarette tax only for two years. Without HB 386a, the tax would have automatically dropped back down to 28 cents a pack on July 1.

“If we put it back down to 28 cents, I’ll be king of North Carolina tomorrow,” Rep. Jim Clark, R-Hayden Lake, told the House. “What we have on the table is a good solution – it may not be the perfect solution.”

The bill, which was amended by a House-Senate conference committee, now directs most of next year’s proceeds from the higher tax rate to water projects around the state, and the following year’s to state Capitol renovation. After the renovation project is provided for, the money would flow to a reserve fund.

Rep. Dick Harwood, R-St. Maries, urged his fellow representatives to oppose the bill. Indian tribes, he said, “don’t have to pay taxes on it, they don’t have to buy a permit. … We should look at that, about charging the tribes a tax on the cigarettes rather than just putting it on 20 percent of the population.”

Just under 20 percent of Idaho’s population smokes. According to the 2000 Census, 1.4 percent of Idaho’s population consists of Native Americans.

Though some lawmakers have tried repeatedly, without success, in recent years to impose Idaho’s cigarette tax on Indian tribes, the state Tax Commission says such a tax on a sovereign nation likely would be impossible to enforce due to constitutional, treaty and jurisdictional issues. Idaho tribes do, however, charge their own cigarette taxes.

Harwood represents District 2, which includes the Coeur d’Alene Indian Reservation.

Even at the 57-cent rate, Idaho’s cigarette tax now is the lowest among surrounding states, and well below the national average of 84 cents per pack. Washington’s is $1.425 per pack, and Montana’s is $1.70.

All but five of North Idaho’s representatives voted in favor of HB 386a. Those joining Harwood in opposing it were Reps. Eric Anderson, R-Priest Lake; George Eskridge, R-Dover; Phil Hart, R-Athol; and Bob Nonini, R-Coeur d’Alene.