Five Tax Increases


The Alabama House of Representatives Thursday passed five bills to raise taxes by a total of about $107 million, part of a plan to close a projected shortfall in the state budget. State house members voted to raise the state tax on cigarettes by 25 cents a pack, to 67.5 cents. That would generate an estimated $66 million a year, by far the largest of the tax increases. The other bills passed would: Raise the automobile title fee from $15 to $28, raising an estimated $19 million a year. Raise the car rental tax from 1.5 percent to 2 percent, raising an estimated $6 million a year. Add a pharmacy tax of 15 cents per prescription, raising an estimated $8 million a year for Medicaid. It would apply only in fiscal years 2016 and 2017. And, add a nursing home bed tax of about $400 a bed, raising an estimated $8 million a year for Medicaid. It would apply only in fiscal years 2016 and 2017. The House also approved a bill to provide a one-time payment of $50 million to the General Fund from an education savings account. The money would have to be replaced in three years.

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