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Legislative Issues
Kentucky: Cigarette Paper Excise Tax Ruled Unconstitutional
Judge Thomas D. Wingate of Franklin Circuit Court in Kentucky ruled on January 15th in a civil case filed by North Atlantic Operating Company, Inc against the Commonwealth of Kentucky that Section XXXIII of HB 380 biennial budget passed in 2006, which called for an excise tax of 25 cents per package of 32 sheets of cigarette paper, is unconstitutional. At the time the Kentucky General Assembly passed the budget bill, Ron Tully, vice president of Louisville-based National Tobacco Co, which imports and sells Zig-Zag cigarette papers in the US, said the tax was introduced behind closed doors and there were no hearings on it. Judge Wingate wrote that HB 380’s legitimate purpose is limited to making “appropriations” because it is a biennial budget bill, yet Section XXXIII is not related to appropriations and is rather a new revenue generating measure which taxes cigarette papers, which were not previously subject to the excise tax on tobacco products. “By embracing both ‘appropriations’ and new ‘revenue’ measures, HB 380 violates Section 51 of the Kentucky Constitution which requires that a bill relate to no more than one subject,” Judge Wingate wrote. “Because this court finds that Section XXXIII violates the constitutional prohibition against omnibus legislation, it fails to pass constitutional muster and is unenforceable,” he said (Franklin Circuit Court, TMA Research 1/15).
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