Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

Fools in Paradise II

May 14, 2009

When they were imposing the highest state income tax rate in the country, Hawaii legislators also were busy raising their tobacco tax.

Of course, Hawaii has a reputation for growing another type of smokable diversion. That might explain how they actually ended up cutting their cigarette tax:

A mistake in a newly enacted state law is good news for pipe and cigar smokers, as well as those who use snuff and chew tobacco. The error gives them a four-month tobacco tax holiday.
Legislative researchers calculate it will cost the state $400,000 in lost revenue.

The Legislature enacted the law earlier this month when Democratic lawmakers voted to override a veto cast by Gov. Linda Lingle. The Republican governor had warned the measure was filled with technical mistakes.

There's another "technical mistake":

Lingle had said there was another problem with the legislation, resulting in the tax on cigarettes being raised to 14 cents per cigarette now and then dropped to 12 cents on Sept. 30.

So in Hawaii, smoke 'em if you got 'em. But don't do anything foolish, like have taxable income there.

Via The Tax Policy Blog.

Tags: Hawaii.