Regional cigarette tax board for Charlottesville area and beyond turns five this October

In a Dillon Rule state like Virginia, localities can only exercise powers that the General Assembly has granted to them. For instance, most counties were not allowed to levy a tax on cigarettes until legislation passed in 2020 though cities did have that power.

In 2021, counties around Charlottesville wanted to go ahead and obtain revenue from those purchasing tobacco. The Thomas Jefferson Planning District Commission agreed to take on the task of collecting the tax through the creation of the Blue Ridge Cigarette Tax Board in October 2021.

“The first local cigarette taxes by the jurisdictions were levied beginning in January of 2022,” said David Blount, the deputy director of the TJPDC. “There is an administrative services agreement between the BRCTB and TJPDC to serve as the administrator for the board.”

The city of Charlottesville had been collecting the tax but agreed to join several other localities. Members are the counties of Albemarle, Augusta, Fluvanna, Greene, Madison, Orange, Rappahannock, and Rockingham as well as the towns of Madison and Mount Crawford.

Neither Louisa County nor Nelson County levy the tax.

Blount said TJPDC staff work with distributors to collect the revenue and keep track of the stamps that are used. The city’s rate of $0.55 a pack is higher than the $0.40 other localities are allowed to charge.

The cigarette tax generated around $1.75 million across all localities in the first half of the current fiscal year and about $259,000 in revenue in January. Blount said that results in about $56,000 in administrative costs.

“Overall in the program, revenues are continuing to increase even though the number of packs sold is either steady or slightly declining,” Blount said.

As part of the work, an agent goes out into the field to see if retailers are charging the tax. If not, they’re notified of the need to do so and Blount said this usually works out. There are penalties for not complying.

In Charlottesville, the tax brought in $445,156 in FY2023, $503,830 in FY2024, and $457,275 in FY2025. The current and next budget project a flat $450,000.

In Albemarle, the cigarette tax brought in $846,075 in FY2024 and $701,006 in FY2025 and the county projects it will receive $989,200 in FY2026. The next budget anticipates a drop in revenue to $753,054.

For more information on the process, visit the website of the Blue Ridge Cigarette Tax Board.

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