Excise Taxes

State

Lance Armstrong targets California for $20 million cigarette tax campaign (CA)
Lance Armstrong is heading a campaign that would add $1 in taxes to each pack of cigarettes sold in California. It is estimated that the tax increase would raise $850 million per year, of which $468 million would go toward medical research for tobacco-related disease, $156 million would go toward prevention programs, and $23 million would be earmarked for enforcement against cigarette smuggling and sales to minors. The tax increase was scheduled to be on a February 2012 ballot, but the vote will be moved up to June 2011 if a two-thirds majority in the legislature agrees to Governor Jerry Brown’s proposal to hold a ballot measure on state taxes and fees. California’s current cigarette tax is 87 cents. Click here to read more.

Cigarette tax advocates keep pushing despite deadline (GA)
This year, lawmakers in Georgia considered raising the state tax on cigarettes from $0.37 to $0.68 per pack to raise an estimated $114 million in revenue for the state. The tax increase was part of a package of revisions to the state tax code. Although state legislators continue to debate the tax reform plan, the cigarette tax has been stripped from the proposal. Georgia’s cigarette tax has been $0.37 since 2003. This is the lowest state cigarette tax in the Southeast, and is significantly lower than the national average of $1.45. Read more about the proposal here, or click here for an update on the stalled effort to include a cigarette tax in the state tax plan. Although the cigarette tax proposal will not pass this year, public health groups are continuing to raise awareness that tobacco taxes are a proven strategy for reducing smoking rates and preventing smoking among youths. Click here for more details.

Ill. committee approves cigarette tax increase (IL)
A Senate committee in Illinois has approved a measure that would raise the tax on a pack of cigarettes by $1 to fund state construction projects. The construction projects were originally to be funded by revenue from video gambling, but that law is under review for violating a constitutional ban on including unrelated subjects in a single piece of legislation. Senate President John Cullerton has prepared the cigarette tax proposal to replace the video gambling revenue. If passed, the excise tax on cigarettes would gradually increase from $0.98 to $1.98 over the course of two years. Click here to read more.

Minn. Senators say tax mini-cigars like cigarettes (MN)
A bill has been proposed in the Minnesota Senate that would tax “little cigars” at the same rate as cigarettes instead of the lower “tobacco products” rate that is currently applied. The change would raise an estimated $6 million in revenue, but the bill’s sponsors say that the main reason they proposed it was to discourage youth from using the products, which often come in child-friendly flavors. Those opposed to the bill say that only a small percentage of children smoke little cigars and that the logistics behind using the tax stamps required in the cigarette taxing scheme would be exceedingly difficult to apply to little cigars. Twelve states and the District of Columbia currently tax little cigars like cigarettes. Click here for more information.

Anti-tobacco advocates propose tobacco-tax increase (MT)
Representative Trudi Schmidt says she plans to introduce a bill to Montana’s House that would raise the state’s cigarette tax from $1.70 to $4.20 per pack and increase taxes on other tobacco products. The revenue from the tax increase would help fund healthcare programs as well as tobacco prevention and cessation programs. The increased price of cigarettes is also expected to discourage people from starting to smoke and encourage smokers to quit. Schmidt has mentioned that the measure could go to a public vote if it fails in legislature; most of Montana’s tobacco taxes have been approved via voter initiatives. Read more here.

Neb. Gov. says he will not sign proposed cig tax (NE)
Nebraska Governor Dave Heineman has said he would not sign a bill that would increase the state’s cigarette tax to $1.99 per pack, should it pass in the legislature. The bill would add $1.35 to the $0.64 tax per pack of cigarettes, and would increase the tax on other tobacco products from 20% to 65%. The measure is expected to generate about $100 million annually, some of which would be dedicated to the state’s smoking prevention program. While the bill has the support of health advocates and anti-tobacco groups, it is uncertain if it will be approved, as several lawmakers have promised not to raise taxes. The tax proposal was introduced by Senator Mike Gloor and is under the review of the Legislature’s Revenue Committee, which will determine if it will advance to the full legislature. Click here for more information.

NH bucks trend, proposes cutting tobacco tax (NH)
The New Hampshire House has passed a bill that would decrease the state cigarette excise tax by $0.10 per pack in hopes that it will entice smokers from neighboring states to purchase cigarettes in New Hampshire. The bill’s supporters say that the tax cut will help merchants near state borders, and the state could see an increase in revenue as out-of-state tourists purchase food, alcohol, lottery tickets, gas, and hotel rooms while in the state. Opponents say that there is no evidence that reducing the tobacco tax will result in a revenue increase, and that New Hampshire’s tax is already the lowest in the region. Governor John Lynch does not support the bill; in fact, he has approved multiple cigarette tax increases during his tenure as governor. The bill now moves to the state Senate. Click here to read more.

NC legislators propose increasing cigarette tax by $1 (NC)
A bill recently introduced to the North Carolina legislature would increase the state’s $0.45 per pack tax to $1.45, making it consistent with the national average. The intent of the bill is to raise $338.4 million in revenue for the state and to deter youth smoking. Even though a recent poll shows that 62% of North Carolina voters would support a $1 per pack increase, the bill’s supporters admit that it will be difficult to pass it in the Republican-controlled General Assembly, given the anti-tax climate and concerns about how the tax would affect retail and tobacco industry business in the state. Click here to read more.

Lawmakers approve tax hike on mini cigars (UT)
Utah lawmakers have passed a bill that would tax “little cigars” at the same rate as cigarettes. The bill is designed to make the cost of the similar tobacco products more equitable. Opponents of the tax increase have argued that little cigars are not sold in the same quantities as cigarettes, which they claim makes it unfair to tax them like cigarettes. After moving out of the House, the bill was signed by the Governor on March 22. The law will go into effect on July 1 of this year. Read more here, or click here to see the bill’s status and policy language.

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