A proposed 15-cent tax on tobacco products was shot down by the Franklin County Board of Supervisors on Tuesday. The vote came as the county finalized its budget for the 2021-22 fiscal year.
County staff first proposed the tobacco tax last month as an option to provide additional revenue for the county. The General Assembly passed legislation last year that allowed localities to tax tobacco products at a rate of up to 40 cents per pack starting July 1. Franklin County proposed starting the tax Jan. 1, 2022.
The 15-cent tax would have provided an estimated $75,000 in additional revenue for the county in its first year, according to finance director Brian Carter. He said the amount was likely to double after the tax had been in effect for a full fiscal year.
Several convenience store owners attended Tuesday’s public hearing to voice their opposition to the tax. Each said that the tax would hurt their business.
Jay Patel, who owns a store in Windy Gap, said that more than 50% of his and other convenience store revenue comes from cigarette sales. “If the cigarette price goes up, the revenue goes down,” he said.
Following the public hearing, supervisors unanimously came out against the tax. Blackwater District representative Ronnie Mitchell said it would hurt county residents as well as tobacco farmers.
“My family has been farming tobacco since about 1850,” Mitchell said. “I don’t want to vote for anything that will be more detrimental to our farmers.”
Rocky Mount District representative Mike Carter said customers would just go outside the county to purchase cigarettes if a tax was approved. That could hurt local businesses, he said.
He and Blue Ridge District representative Tim Tatum both questioned whether the cost of implementing the tax would exceed any revenue created by it.
The board also approved a 2% increase to the county’s transient occupancy tax in a split vote. Starting July 1, the tax will increase from 5% to 7% for anyone staying at hotels, motels, campgrounds or short-term rentals in the county.
The tax increase is expected to bring in an additional $50,000 in revenue for the county. The additional funds will be used to promote tourism in the county, Brian Carter said.