The Dollar Standard

More states propose cigarette tax increase of $1 per pack.

Thomas A. Briant, NATO Executive Director

A trend that was evident in states that sought to raise the cigarette tax last year is repeating itself again this year. In 2010, an increasing number of states were considering raising the cigarette tax by $1 per pack or more. This $1 per pack tax increase seems to be the new standard by which a growing number of state legislatures attempt to raise the tax on cigarettes.

At this point in the new year, the following states have introduced bills to raise the state's cigarette tax: Illinois ($1.01/pack increase) Mississippi ($.50/pack increase) Missouri ($.16/pack increase) [image-nocss] Nebraska ($1.35/pack increase) Oregon ($1.00/pack increase) Texas (2./pack increase) Virginia ($1.15/pack increase) Four out of six states are following the trend identified last year, and proposing a cigarette tax increase of $1 or more per pack. However, the Illinois legislature voted in January to raise the state income tax rate by 66% and increase the corporate tax rate by 45% to partially resolve a projected $15 billion dollar state budget deficit. The Illinois lawmakers did not pass the $1.01 per pack cigarette tax increase. Illinois Governor Pat Quinn signed the income and corporate tax increases into law, which are expected to generate $6.8 billion dollars.