Chincoteague Council Votes for Cigarette Tax

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By Carol Vaughn –

The Chincoteague Town Council, after holding a public hearing Monday at which no one spoke, unanimously approved an ordinance imposing a tax of 40 cents per pack on cigarettes sold in the town.

The tax, which takes advantage of a new state law allowing localities to charge a tax on cigarettes, goes into effect Jan. 1, 2023.

The town will join the Chesapeake Bay Cigarette Tax Board, which for an administrative fee of 5% takes care of collecting the tax, enforcing the ordinance, and other administrative functions.

Accomack County recently enacted a cigarette tax of 10 cents per pack and joined the Chesapeake Bay Cigarette Tax Board.

Nine of the 10 current members of the Chesapeake Bay Tax Board charge the maximum the state allows, 40 cents, with Accomack County being the exception, Town Manager Mike Tolbert told the council.

The council also approved an ordinance change related to the meals tax.

The ordinance requires a minimum of 10% of all meals tax collections to be dedicated to tourism each year.

For the past several years, that requirement has been satisfied by giving 5% to the Chincoteague Center and 5% to the Chincoteague Chamber of Commerce, as recommended each year by the mayor’s meals tax committee.

In fiscal year 2022, distributions to the chamber of commerce were halted in March because revenues exceeded the amount budgeted for the line item, according to a memo from Tolbert to the town council and mayor.

At its Aug. 11 meeting the ordinance committee proposed the ordinance be revised to eliminate the meals tax committee and to codify that 5% of meals tax collections be distributed to the chamber of commerce and 5% be distributed to the town’s Center fund, which helps pay for the operation of the Chincoteague Center.

The council’s action followed that recommendation.

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