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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