Excise Taxes

State

Tax hikes on the way for Connecticut residents (CT)
Connecticut Governor Dannel Malloy has signed a state budget that will raise revenues by $2.5 billion over the next two years by increasing taxes. Among the tax hikes was a 40-cent cigarette tax increase, which will bring the state’s cigarette tax rate to $3.40, the third-highest in the nation. Read more here.

La. cigarette tax hike deferred, but renewal OK'd (LA)
In Louisiana, a recent proposal to raise the state’s cigarette tax by seventy cents per pack was deferred amid great opposition. While the bill could be raised later in the legislative session, its sponsor believes it is unlikely to pass. Meanwhile, the House Ways and Means Committee has approved the continuation of a four-cent per pack cigarette tax that was about to expire, which will keep the state cigarette tax at its current level of 36 cents per pack. The question of the four-cent tax renewal will now be reviewed in the full House. Although supporters have testified on the public health benefits of increasing cigarette prices, Governor Bobby Jindal has pledged to veto both the renewal and tax increase should they pass due to his anti-tax stance. Click here for more information.

LePage would veto cigarette tax hike (ME)
A bill has been proposed in Maine’s House that would raise the tax on a pack of cigarettes from $1.50 to $3.50. Supporters believe that this tax would discourage young people from smoking and help the state’s economy. Opponents representing convenience stores and tobacco dealers say that the tax increase would have a negative impact on their businesses and would send cigarette consumers to neighboring New Hampshire, which has a significantly lower cigarette tax. Maine Governor Paul LePage has said he would veto the bill if it passes, as he is against increased fees or taxes. Instead, LePage’s plan for balancing the budget would be to cut about a third of the existing Healthy Maine fund, mainly derived from the payments by tobacco companies to the state under the Master Settlement Agreement. Read more here, or click here to track the status of the bill, LD 536.

RI lawmakers consider lowering cigarette tax (RI)
A proposal by Rhode Island lawmakers to reduce the state’s cigarette tax by a dollar was reviewed in a House Finance Committee hearing this month. The bill’s sponsor had argued that smokers go to nearby states with lower taxes to buy cigarettes, and that a $1 cigarette tax cut could bring in millions of dollars in sales. Physicians, public health officials and anti-smoking groups voiced their opposition to the bill at the hearing, and the bill has been deemed unlikely to advance, even by its sponsor. A vote on the bill has not been scheduled. In general, state cigarette taxes have trended upward to raise revenues since the economy has been in decline. Click here for more information, or click here to check the status of House Bill 5158.

A handshake deal on taxes, budget and jobs bills (VT)
Vermont policymakers have negotiated a tax package that includes a 38-cent cigarette tax increase to help fill the state’s $176 million budget shortfall. The total tax per pack is now $2.62. The Senate originally proposed a $1 cigarette tax, while the House put forward a 27-cent tax. The cigarette tax proved to be a major point of contention, and the 36-cent tax was the highest the governor would approve. While the approved tax increase will bring in additional revenue for the state, a $1 per-pack tax would have raised $10 million in revenues according to an estimate from the Joint Fiscal Office. Read more here.

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