MINNEAPOLIS -- With only several state legislatures yet to conclude their 2017 legislative sessions, the outcome of various tobacco legislation in most states is now clear.
Cigarettes and Tobacco Products Taxation
This year, 28 states considered bills to raise cigarette and/or tobacco-product tax rates in some form. These states are Delaware, Florida, Hawaii, Indiana, Kansas, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, West Virginia, Wyoming and Utah.
Three of these states passed and enacted tax changes, including Delaware (50-cents-per-pack cigarette-tax increase, 15% increase on OTP and 38-cent tax increase on moist snuff), New York (modified the tax on large cigars from 75% of wholesale to 45 cents per cigar) and Rhode Island (increased tax rate on cigarettes by 50 cents).
In addition, Minnesota removed the automatic inflator on the excise tax per pack of cigarettes and froze the cigarette tax rate at $3.04 per pack. Additionally, Minnesota reduced the tax cap on premium cigars from $3.50 to 50 cents per cigar.
Finally, California voters approved a ballot question last November that raised the state’s cigarette tax by $2 per pack and also increased the OTP tax to 65.08%. These tax increases went into effect on July 1, 2017.
E-Cigarettes and Vapor Products Taxation
This year also produced an increasing number of states introducing legislation to assess a new tax on e-cigarettes and vapor products. Fifteen states considered bills to enact a new tax: Arizona, Delaware, Hawaii, Indiana, Kansas, Massachusetts, Michigan, Montana, New Mexico, New York, North Carolina, Ohio, Oregon, Washington and West Virginia.
Of the bills introduced in these states, only two were enacted into law. Delaware passed a new tax on vapor products at 5 cents per fluid milliliter on nicotine solution and New York passed a tax modification on vapor products to 40 cents per fluid milliliter.
Further, the Kansas legislature decreased the excise tax on vapor products from 20 cents per milliliter of e-liquid to 5 cents.
Age 21 to Buy
In 2017, 27 state legislatures had bills introduced to raise the legal age to purchase tobacco products to either age 19 or 21. So far, the states of Oregon, New Jersey and Maine have enacted a statewide law to increase the legal minimum age to purchase to 21 years old. These states join California and Hawaii, increasing the total to five states with a minimum legal age to purchase at 21.
Bills introduced to raise the legal age to 21 that did not pass were considered by lawmakers in Arizona, Arkansas, Connecticut, Florida, Idaho, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Texas, Utah, Vermont and Washington. Also, a bill in North Dakota that would have raised the legal age to 19 years old failed.