Excise Taxes

National

Updated tobacco tax factsheets
The Campaign for Tobacco-Free Kids has updated its state tobacco tax factsheets to reflect the recent rate increase in Massachusetts. Click here to access the factsheets.  Contact Ann Boonn at aboonn@tobaccofreekids.org with questions or requests for any state-specific tax factsheets.

Vt., N.H. cigarette taxes headed up (VT, NH)
Vermont’s cigarette tax increased by 20 cents on July 1, and New Hampshire’s tax will also increase if cigarette tax revenues do not reach $48 million between July and October. If the tax increase goes through, New Hampshire’s cigarette tax would increase from $1.08 to $1.33. As more smokers quit--partly in response to rising taxes--states are coping with losses in tax money. However, because the cigarette tax in New Hampshire is the lowest in the region, smokers cross state lines into the Granite State to get cheaper cigarettes. Even after New Hampshire’s slated tax increase, the new tax rate will be a bargain compared to Massachusetts’ $1.51 tax (now increased to $2.51, effective July 1) and Maine’s $2 tax. For more information, click here.

Mass. cigarette tax jumps $1 per pack (MA)
Massachusetts Governor Deval Patrick signed a bill to raise the cigarette tax by one dollar to a total of $2.51 per pack. The change became effective immediately when the bill was signed on July 1. State legislators worked to pass the bill by the turn of the fiscal year. The tax increase is expected to generate $174 million in cigarette tax revenue to fund a state healthcare initiative, and the cigarette price increase will spur some 25,000 smokers to quit. Opponents of the bill fear that small retailers will lose business to neighboring states Vermont and New Hampshire, where cigarette taxes are lower. Click here to read more.

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International

Brussels proposes EU tax hike on cigarettes
The European Commission has issued a recommendation that the minimum excise tax on cigarettes should increase due to inflation in the European Union’s 27 member countries. The current minimum tax rules have been in place since the 1970s, and are driven by the price of the most popular brand of cigarettes in each country, leading to large disparities in prices across borders. The price differences have led to cigarette smuggling and cross-border shopping, according to EU tax commissioner Laszlo Kovacs. The European Commission’s new plan would result in tax increases ranging from 6% to 46% among member states of the EU--a disparate burden that could cause tension among member states. Nonetheless, the plan would be beneficial for public heath, as cigarette price increases are proven to lower smoking rates. The plan would also raise tax rates for roll-your-own tobacco, a product that has remained inexpensive despite rising cigarette taxes. Click here to find out more about the proposed cigarette tax increase.

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