KGOU

Tobacco Companies Sue State Of Oklahoma Over Cigarette Fee

Jun 8, 2017

Two of the largest tobacco companies in the U.S. are suing Oklahoma over the state’s new cigarette fee.

 

R.J. Reynolds Tobacco Co. and Philip Morris USA Inc. filed a brief with the Oklahoma Supreme Court Wednesday, along with several Oklahoma companies and individuals.

 

In the brief, plaintiffs argue the $1.50-per-pack cigarette fee, or the “Smoking Cessation Act,” “flagrantly violates” the Oklahoma constitution.

 

The fee is scheduled to take effect in August, and would generate about $215 million per year for the state.

 

It was passed by the state House of Representatives May 26, and is part of the state’s 2018 fiscal year budget signed by Gov. Mary Fallin on May 31.  

 

The lawsuit argues the cigarette fee should have been passed with a three-quarters supermajority, rather than the simple majority vote it received.

 

The state constitution requires revenue-raising measures, like tax increases, be approved by three-quarters of legislators.

 

The suit asserts the cigarette fee is really a tax, and was relabeled only because lawmakers struggled to pass revenue-raising measures requiring three-quarters of lawmakers--76 House votes--to vote in favor.

 

“The 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 purpose,” wrote attorneys for the plaintiffs.

 

The lawsuit cites Rep. Leslie Osborn (R-Mustang), Chair of the House Appropriations and Budget Committee: “Asked why the $1.50 exaction is now labeled a ‘fee’ and not a tax, Representative Osborn explained that the ‘fee’ was ‘the only way we can do it, because no one would vote for a 76-vote measure.’”

 

Oklahoma Attorney General Mike Hunter said in a statement that his office has received the lawsuit and it is “under review.”

 

“Just as the office has handled lawsuits challenging legislation in the past, we will move forward to respond to this lawsuit as we look to provide the best outcome for our clients,” Hunter said.

 

If the courts determine the cigarette fee is unconstitutional, Oklahoma legislators may have to return to the Capitol for a special session to find a replacement for the $215 million in revenue--or state agencies could face further cuts.

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