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Tobacco Pricing
Reports
Tobacco legislative wrap up
As detailed in a legislative report released by the petroleum industry publication NPN Magazine, four states increased cigarette and tobacco taxes in 2012, and 23 other states are considering doing the same. Additionally, 24 states have put laws in place to regulate roll-your-own tobacco machines. Various other tobacco restrictions have been passed at the local level. Click here to read more detailed information from this tobacco industry analysis of the laws and restrictions that have been enacted thus far in 2012. Click here for state cigarette excise tax rates and rankings from the Campaign for Tobacco-Free Kids (CTFK). For information on the public health case for raising excise taxes and other fact sheets from CTFK, click here.
New report - Raising the Excise Tax on Cigarettes: Effects on Health and the Federal Budget
The Congressional Budget Office (CBO) conducted a study of the impact of a tobacco control policy intervention on the federal budget and overall health. The CBO studied the effects of a hypothetical increase of the federal cigarette and cigar tax by 50 cents per pack. The data suggest that the tax increase would promote a reduction in the prevalence of smoking, reduce federal budget deficits by about $42 billion through 2021, and improve overall health and productivity. Compared to other studies of this kind, this study included a more comprehensive analysis of the impact of policy change that examined healthcare spending per capita and longevity, broader sources of revenue, long-term budget estimates, and the impact on gross domestic product (GDP). Click here for a report summary and a link to the full report.
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State Policy
New Hampshire's tobacco tax revenues plummet (NH)
The 2011 decision to reduce New Hampshire’s tobacco tax by ten cents is in question as the state’s revenue has fallen $11.5 million below projections. It has been one year since the tobacco tax was reduced, and the numbers reported at the end of this fiscal year show that tax revenue is down $20.1 million from last year. A key argument for reducing New Hampshire’s state tax was that lower cigarette prices would bring in more tax revenue from people from the neighboring states like Massachusetts, where the tobacco tax is almost two times that of New Hampshire. Click here to read more, including statements from lawmakers in New Hampshire.
Tax hike has many Utahns bootlegging cigarettes (UT)
As a result of the $1 tax increase on cigarettes in Utah in 2010, smokers have been traveling out of state to purchase cigarettes, according to the Utah Tax Commission. The year-to-date cigarette tax revenue is about $775,000 less than the previous year’s revenue, although it is on target with the state’s projections for the year. State analysts suggest that smokers are travelling from Utah to surrounding states with lower taxes such as Idaho, Nevada, Wyoming and Colorado in search of cheaper cigarettes. Click here to read more.
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National Policy
President Obama signs roll-your-own-tobacco legislation
President Obama has signed into law a federal highway bill that classifies roll-your-own (RYO) cigarette merchants as cigarette manufacturers and requires them to pay the same tax rates as large-scale cigarette manufacturers. Previously, consumers could patronize small businesses to avoid paying state and federal per-pack cigarette taxes by purchasing RYO cigarettes at cheaper prices similar to the cost of pipe tobacco. This new law could potentially put these small retailers out of business due to the loss of customers that are unwilling to pay higher tax rates. Click here to read a statement released by California’s Center for Tobacco Policy & Organizing regarding this bill, or click here for the official notice of this policy and information about the permitting process for manufacturers issued by the Alcohol and Tobacco Tax and Trade Bureau (TTB). Click here to read more about how this new legislation affects RYO tobacco businesses.
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