Tobacco Tax Hike Approved by Texas Senate

By: Associated Press
By: Associated Press

AUSTIN, Texas -- The Texas Senate has voted to raise taxes on smokeless tobacco, with some of the money going to help pay for a program to encourage doctors to practice in rural areas.

Instead of basing the tax on price, smokeless tobacco would be taxed by weight. The change is expected to raise about $105 million. Some of that money would be used for a rural doctors loan repayment program.

The Texas Association of Community Health Centers and the Texas Academy of Family Physicians says the bill by Democratic Sen. Juan "Chuy" Hinojosa, of McAllen, would help 225 more physicians a year.

The change is also tied to a tax cut for some small businesses. A Senate plan makes the increase in the smokeless tobacco taxes a tradeoff for reducing a tax levied on businesses that make less than $1 million a year.

The bill approved Tuesday must go back to the House for final approval.

The smokeless tax bill is HB2154.

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