Tobacco Pricing

State Policy

Colorado lawmakers find deal in cigarette tax (CO)
The Colorado House has approved a bill that permanently allows a state sales tax on cigarettes. The bill was sponsored by Daniel Kagan, and ended the sales tax suspension that has been in effect since 2009. The sales tax is currently 2.9% which is about 12 or 13 cents per pack of cigarettes and lower than the nation’s average tax rate. The tax is expected to raise about $28 million next fiscal year, which will be allocated to the state’s College Opportunity Fund. Increasing the tax on cigarettes has been proven to be an effective incentive for smokers to quit smoking as well as a means to increase revenue for states. Click here to read more. Click here to read more about how the funds will be allocated.

Massachusetts governor wants tax hike to fund education (MA)
Massachusetts Governor Deval Patrick proposed an increase to the state’s cigarette tax by $1. This cigarette tax increase to $3.51 is part of a bill that includes increases to income, soda, and candy taxes to provide revenue for state education investments and transportation. Click here to read more. Click here to read more about the recent cuts in funding to the state’s smoking cessation programs. Click here to track H.1, which has been referred to the House Committee on Ways and Means.

Senators seek to close 'little cigar' loophole (MN)
A bill has been introduced that would close a loophole that allows tobacco products like “little cigars” to be sold at lower prices than cigarettes and in various flavors, thereby making them appealing to younger smokers. The cost of “little cigars” is about one third less than the price of cigarettes. This new bill would require the same taxes, fees, and regulations of “little cigars” as for cigarettes. Click here to read more. Click here to track SF 209, which was referred to the Taxes committee. There are also two other proposed measures that would raise the state’s cigarette and tobacco tax by as much as $1.60 which could generate about $370 million in revenue over a two year period. Click here to read the full story. Click here to track bills HF0509 and HF0091, which both propose increases to Minnesota’s cigarette and tobacco taxes.

North Dakota lawmakers consider roll-your-own smokes bill (ND)
A bill has been proposed that requires owners of commercial roll-your-own tobacco machines in North Dakota to pay the same taxes as they would for name-brand packaged cigarettes. The bill is supported by the State Tax Department due to the growing popularity of roll-your-own tobacco machines across the country and state. Roll-your-own tobacco machines are taxed at rates much lower than packaged cigarettes, and are not regulated by the state. Click here to read more. Click here to track SB 2106, which was passed in the Senate and sent to the House.

North Dakota House snuffs cigarette bills (ND)
An increase to North Dakota’s cigarette tax has been defeated in the House. The proposed bill would have increased the state’s cigarette tax from 44 cents a pack to $1. The bill would have also required distributers of cigarettes to put revenue stamps on cigarettes so that they could be tracked. This bill was created as a means to encourage state residents to quit smoking. Click here to read more about HB 1387.

Governor Hassan makes pitch for raising cigarette tax (NH)
New Hampshire Governor Maggie Hassan has proposed a 30 cent increase to the cigarette tax in efforts to improve the state’s public health policy and raise state revenues. According to Hassan, New Hampshire has the highest smoking rate in the Northeast, and cigarette tax increases have been proven to be effective in preventing youth from smoking. The tax increase will also generate about $40 million in revenue for the state. If the increase is passed, the new tax rate would be $1.98 per pack. Click here to read more. Click here to track bill HB659, which is in the House Ways and Means committee.

Wyoming cigarette tax increase snuffed out (WY)
A House bill proposing to increase the state cigarette tax by $1 has been defeated. House Bill 199 would have raised the cigarette tax from 60 cents to $1.60, with the revenue allocated to Medicaid. The bill was defeated with the opposition stating that the increase would have been excessive, and would have led to cross-border cigarette sales. Additionally, it was thought to not have benefited Medicaid as expected. Wyoming is a state that typically does not support tax increases, and it is unclear if this bill will be reintroduced later in the year. Scientific literature has shown that cigarette tax increases reduce cigarette consumption, and improve the health of the public. Click here to read more.

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National Policy

Senate Democrats go after tobacco tax loophole to increase revenue
A recent bill introduced by Senator Richard Durbin (D-IL) will close tax loopholes for lower taxed tobacco products. The bill called the “Tobacco Tax Equity Act” will equalize taxes on all tobacco products, including pipe tobacco, cigars and smokeless tobacco. Consumption of these products has risen since the federal excise tax on cigarettes was raised in 2009. If passed, this policy will eliminate the pricing loophole, and reduce the appeal of these products as an alternative to cigarettes. This bill would generate about $3.6 billion over 10 years. Click here to read more. Click here to track SB 194, which has been referred to the Committee on Finance.

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