City of Alexandria, Virginia
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MEMORANDUM
DATE: MAY 8, 2013
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: RASHAD M. YOUNG, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Public Hearing, Second Reading, and Final Passage of an Ordinance to Increase the City's Cigarette Tax Rate. [ROLL-CALL VOTE]
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ISSUE: Consideration of an ordinance that amends and reordains Alexandria City Code Section 3-2-102 to implement the cigarette tax rate increase included in the fiscal year (FY) 2014 Approved Budget.
RECOMMENDATION: That City Council pass the proposed ordinance (Attachment I) scheduled for public hearing, second reading, and final passage on Saturday, May 18, 2013.
DISCUSSION: The City levies a tax on every person who sells, distributes, or uses cigarettes. The tax is currently administered by the Northern Virginia Cigarette Tax Board, a regional, inter-jurisdictional enforcement authority.
The proposed ordinance would increase the tax rate from the current rate of $0.80 for each package of cigarettes to $1 per package of cigarettes as established in the FY 2014 Approved Budget. Staff has estimated that increasing the tax rate would generate an additional $0.6 million in tax revenue in FY 2014. This projection is based on the assumption that cigarette purchasers will continue to purchase cigarettes in the City at the same rate as in previous years. Any decrease in cigarette purchases brought on by the increased tax rate or unrelated decreases in cigarette usage could result in lower additional revenues than currently projected.
FISCAL IMPACT: Staff estimates that the rate increase will produce $0.6 million in FY 2014 revenues.
ATTACHMENT: Cigarette Tax Rate Ordinance
STAFF:
Laura B. Triggs, Chief Financial Officer/Director of Finance
Nelsie Smith, Director, Office of Management and Budget
Christina Z...
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