OKLAHOMA CITY (AP) - Oklahoma’s new $1.50 fee on a pack of cigarettes is an unconstitutional “tax,” cigarette companies and three Oklahoma residents say in a lawsuit asking the state Supreme Court to prevent it from taking effect.
The lawsuit, filed Wednesday by Phillip Morris USA Inc., R.J Reynolds Tobacco Co. and others, alleges the fee violates a state constitutional prohibition against passing revenue-raising measures in the final five days of a legislative session and without a supermajority of lawmakers.
Oklahoma Attorney General Mike Hunter said Thursday his office was reviewing the lawsuit. Gov. Mary Fallin, who is named as a defendant along with leaders of the state House and Senate and the Oklahoma Tax Commission, said she hopes the state’s highest court “will deal with it expeditiously.”
The fee, scheduled to go into effect in August, is expected to generate about $258 million to help balance the state budget for the fiscal year that begins July 1. Most of the revenue is dedicated to the newly created Health Care Enhancement Fund aimed at reducing cigarette use and health care costs.
The lawsuit takes issue with how the fee passed and the fact that lawmakers labeled it a fee instead of a tax. The Legislature took up the measure during the final week of the session after failing on four previous occasions to increase the state’s existing tax on cigarettes by $1.50 a pack to more than $2.50 per pack. Fallin wanted the cigarette tax hike to help close a projected $878 million in hole in next year’s state budget.
The state constitution requires that revenue-raising bills originate in the House, be approved by three-quarters of the members of the House and Senate, and not be enacted during the last five days of a legislative session. The smoking cessation measure “originated in the Senate, passed on the final day of the legislative session and secured bare legislative majorities,” the lawsuit says.
“This court should reject the dangerous fiction that a tax is not a ’bill to raise revenue’ if the Legislature labels the tax a ’fee’ and slaps on a policy-oriented title and stated purpose,” the lawsuit says. The cigarette fee proposal “simply reincarnated the earlier cigarette tax bills under a new name.”
Supreme Court justices ordered the state to respond to the allegations by July 7.
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Senate Bill 845: https://bit.ly/2ra0PrI
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