OK Supreme Court Overturns New Fee On Cigarettes

The Oklahoma Supreme Court on Thursday overturned a $1.50 per-pack fee on cigarettes, ruling that lawmakers adopted the fee in violation of constitutional rules that dictate how and when revenue-raising measures can be approved. The plaintiffs-cigarette companies, distributors, and smokers-argued that the $1.50 tax violated the state constitution. The law was set to go into effect in late August.

In this case, the Senate created the tax and approved it on the last day of the session.

The measure was expected to generate $257 million in revenue and had been scheduled to take effect August 24.

An opinion filed by the court Thursday states that the timing of the measure made it unconstitutional. Now, those measures are being challenged in the state Supreme Court.

Wyrick noted the court previously had upheld regulatory schemes that generated incidental revenue. The state has been dealing in recent years with declining recurring tax revenue. "This meant that the House was confronted with a constitutional conundrum: either pass SB 845, which was essential to balancing the budget but would perhaps require violating (the law), or don't, and violate (the law) by failing to balance the budget".

The insertion into SB845, however, switched the terminology to smoking-cessation fee even though just $1 million of the $225 million in revenue would have used toward preventing youth tobacco usage. It would have been the largest amount of new recurring revenue passed by the legislature during the 2017 session.

"We can not continue to let the most vulnerable Oklahomans suffer because of a continued lack of leadership among the Republicans at the Capitol and their unwillingness to do the hard work and take the hard votes necessary to properly and fully fund our health care agencies", Sparks said in a statement.

"None of this is to say that the legislature can not choose this particular sort of regulatory tool - a sin tax - to further its goal of reducing smoking", the court said. "Republicans are not particularly supportive of revenue-raising measures and may be unwilling to consider them in a special session", Ashley said.

John Schachter, director of state communications for anti-tobacco advocacy group Campaign for Tobacco-Free Kids, said the group is disappointed by the state Supreme Court decision.

Lawmakers reacted quickly to the court's decision. Tobacco manufacturers argued the bill's primary goal was to raise revenue to operate state government.

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