Excise Taxes

National

Campaign for Tobacco-Free Kids: State cigarette excise tax rates and rankings
The Campaign for Tobacco-Free Kids has released new information concerning each state’s current excise tax rate and ranking. The overall state average is 96.1 cents per pack while major tobacco states’ average is 26.5 cents per pack. The information is available on their website. For the PDF, click here.

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States

Arizona:
 
Attorney General says cigarette tax 80 cents a pack
The Arizona Department of Revenue will begin collecting two new taxes on cigarettes in early December. The total increase is 80 cents/pack. There was some debate on the issue due to language on the ballot which read “.80 cents/pack”, which technically translates to eight-tenths of a cent. The text on the initiative was worded correctly, however, and the Attorney General has concluded that voters intended to impose an 80 cent/pack tax increase. There may be a legal battle from R.J. Reynolds who is exploring whether or not to challenge the Department of Revenue’s conclusion. For more information, click here.

California:
 
Big tobacco wages successful anti-Proposition 86 effort
Proposition 86, which would have increased cigarette taxes by $2.60 a pack to fund health care programs, was defeated in California. Philip Morris USA and R.J. Reynolds Tobacco invested millions to campaign against the proposition, claiming that it was excessive and didn’t do enough to fund anti-smoking programs. Click here to read more.

Illinois:
 
Illinois House: Yes to cigarette taxes
The Illinois House voted to allow counties to raise cigarette taxes by as much as $2 per pack. The law does not raise cigarette taxes; instead, it allows each county to make its own decision. Any tax revenue will have to be spent for health and safety programs. The legislation will now go to the state Senate. The press release can be found here.

Indiana:
 
Governor proposes increase in state cigarette tax
Governor Daniels proposed an increase in Indiana’s cigarette tax. He recommended a 15 cent per pack increase, but is leaving the final decision regarding the amount of the increase to the state legislature. The revenue will go toward providing health insurance coverage, reducing smoking rates, and helping to immunize children. Click here for the press release.

Iowa:
 
Culver: Cigarette tax yes; gas tax no
Gov.-elect Chet Culver set a target date of Jan. 30 for submitting his budget proposal to the 82nd General Assembly and said "very likely" will include a cigarette tax increase that could generate $80 million to $150 million to reduce smoking among teenagers and to help fund health-care initiatives. Currently, Iowans pay 36 cents per pack in state tax and Culver has indicated he favors boosting that by as much as a dollar per pack.  Click here to read more.
 
Anti-tobacco activists renew push for higher tax
Anti-tobacco advocates in Iowa are renewing their push for a tobacco tax increase now that Democrats are in control of the Legislature. Last year, a proposed 80 cents per pack increase by Governor Vilsack was blocked by Republican House Speaker Chris Ranks. Democrats say that it is too soon to predict what will happen surround the issue. Click here to read more.

Mississippi:
 
Health groups unite to get cig tax raised
A coalition of health advocacy groups promised Wednesday to fight for all they're worth this year to get Mississippi's cigarette tax raised. Last session, the Legislature twice passed bills aimed at increasing the cigarette tax from 18 cents to $1 while trimming the state's sales tax on groceries. Both times, Gov. Haley Barbour, a former Washington tobacco lobbyist, vetoed the bills, saying he's long promised to never raise taxes. Supporters couldn't muster the votes to override the vetoes. Click here to read the full article.

Missouri:
 
Tobacco defeat in Missouri bucks national trend
Voters in Missouri rejected proposed Amendment 3, which would have added 80 cents to the current 17 cent tax on a pack of cigarettes and tripled the tax on other tobacco products. Missouri and California were the only states in the November elections to reject anti-tobacco measures. R.J. Reynolds Tobacco Co. spent $5.6 million to oppose the initiative. The outcome mystified Cindy Erickson, the spokeswoman for the Committee for a Healthy Future, the group that proposed the initiative. Click here for the press release.

North Carolina:
 
Cigarette sales fall after tax kicks in
North Carolina’s tobacco tax increase of 30 cents per pack last September of 2005 is pushing cigarette sales down. Public health leaders report that since the tax increase began 10 months ago, cigarette sales have fallen as much as 18 percent. The total decrease is from 574 million between September 1, 2004 and June 2005 to 467 million in the same period a year later.  Additionally, the tax has added an extra $110 million to state revenue. Historically, it has been reported that for every 10 percent increase in price, there is a corresponding 4 to 7 percent drop in consumption, with the largest impact on youth. To read more, click here.

Ohio:
 
Cigarette tax for arts approved in Cleveland and suburbs
Voters in Ohio’s Cleveland and Cuyahoga County suburbs have approved a 30-cent tax increase on a pack of cigarettes. The tax, expected to raise $20 million annually, will be used to finance museums and performing arts companies, in an attempt to protect the city’s cultural heritage. Total taxes for the county are now $1.59 a pack. Click here to read more.

South Dakota:
 
Tobacco tax increase begins January first
Voters in South Dakota approved a one-dollar-a-pack increase in the November election, almost a 200% increase from the current 53 cents-a-pack tax. Additionally, tax on cigars and smokeless tobacco products will increase from ten percent to 35 percent. The increase, which will take effect January 1st, is expected to raise $40 million a year. Click here to read more.

Texas:
 
Cigarette tax hurts local business
The one-dollar-a-pack increase in Texas will go into effect January 1st, 2007. The law, passed by the Texas House in April, is causing some businesses to suffer. Store owners are upset that they will have to pay the tax on products they have already purchased. While the measure faces opposition from businesses, many Texans believe that the increase is a good idea. Click here for the press release.
 
Smokers are bracing for tax increase
Texas smokers will start paying a $1 tax increase on a pack of cigarettes starting Jan. 1.  The tax is part of a sweeping overhaul of the state's school finance system enacted by lawmakers in the spring. It's the first increase in the state's levy on tobacco products since 1991 and is expected to generate about $700 million a year until smoking rates begin dropping off, expected in 2010. Click here to read more.

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International

Mexico soda, tobacco taxes pass key Congress hurdle
Legislators passed a proposal to gradually increase tax on tobacco, to be phased in over the next few years. Smokers will pay 140 percent tax on tobacco in 2007, rising to 160 percent by 2009. To read more, click here.

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