Excise Taxes

State

Cigarette tax increase stalls in Illinois House (IL)
The Illinois House of Representatives has rejected a bill that would have increased the tax per pack of cigarettes by $1.01. The cigarette tax increase would have raised an estimated $375 million, and was part of a larger tax proposal designed to help the state manage a $13 billion deficit. Those supporting the bill believed it would help reduce tobacco use, its associated negative health outcomes, and its burden on taxpayers. The bill’s opponents, mainly business owners, said that the tax increase would encourage smokers to purchase cigarettes in neighboring states with lower taxes, negating any expected health benefits. While portions of the tax proposal, such as an income tax increase, were approved, the tobacco tax measure lacked the votes needed to pass and will be reconsidered at a later date. Illinois currently has a $0.98 excise tax on each pack of cigarettes, although some counties and cities add substantial additional taxes. Read more here.

Bill would set Neb. cigarette tax at $2 a pack (NE)
Nebraska Senator Mike Gloor has introduced a bill that would increase the state’s cigarette tax from $0.64 to $1.99. If passed, the new tax is expected to generate $73 million per year for the state, but Gloor maintains that his main focus for the bill is to improve health by reducing tobacco use. The American Cancer Society, which supports the bill, says the tax increase would prevent 19,500 youth from starting to smoke, help 10,000 adult smokers quit, prevent 8,800 smoking-related deaths, and save the state over $436 million in healthcare costs. A recent poll released by several public health groups indicates that 73 % of Nebraska residents support the tax increase as a way to help fix the state budget and fund healthcare programs. Click here to read more about the proposal, or click here for more details about the poll results.

NoVa delegate: Higher tobacco taxes could fund Medicaid (VA)
Virginia Delegate Patrick Hope is proposing a bill that would raise the state’s cigarette tax from $0.30 to $1.45 per pack. Additionally, the tax on other tobacco products would be raised from 10% to 50% of the wholesale price. Money raised from the increased taxes would fund Medicaid waivers for disabled individuals, Medicaid reimbursement for healthcare professionals, and state tobacco prevention programs. Hope believes that the tax increase will make the Medicaid budget more sustainable and ultimately save taxpayers money, but the bill is expected to meet resistance from the Republican-controlled House of Delegates. Click here to learn more.

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