State Legislatures and Tobacco Taxes
10 states have indicated intentions to raise cigarette, OTP or e-cigarette taxes
With state legislatures just beginning to convene their 2015 legislative sessions, a number of bills have been introduced to increase state cigarette and tobacco taxes or assess a new tax on e-cigarettes. In 2014, 25 states proposed increases in either cigarette or tobacco tax rates, or both. However, only Vermont enacted a cigarette tax increase, which was 13 cents per pack. In addition, 15 states considered bills to assess a tax on e-cigarettes, but only North Carolina enacted a law that assesses a 5 cent per milliliter tax on liquid nicotine.
Already just one week into the New Year, bills have been carried over from the 2014 legislative sessions, pre-filed, or actually introduced in 10 states to raise cigarette or OTP tax rates or assess a tax on e-cigarettes. The states with tax legislation include the following:
Indiana: The Indiana Attorney General has proposed taxing e-cigarettes at the current state tobacco tax rate of 24% of the wholesale price.
Nevada: Senate Bill No. 79 provides for the taxation of liquid nicotine at 30% of the wholesale price.
New Hampshire: A legislative request has been made for a bill to increase the state’s tobacco tax and dedicate the increase to tobacco prevention and control programs. The bill has not yet been drafted and details on the actual proposed tax increase have not been made available.
New Jersey: Three carryover bills from the 2014 legislative session include Bill No. A 1308 that would tax little cigars at the same rate as cigarettes (13.5 cents per little cigar), Bill Nos. A 1944 and S 1213 that would raise the tobacco products tax rate to 90% of the wholesale price and tax moist snuff at $2.25 per ounce, and Bill No. A 2021 that would reduce the cigarette tax by 30 cents per pack.
New Mexico: Bill No. S 65 would impose an excise tax at the rate of four cents per milligram of liquid nicotine solution contained in alternative nicotine products.
New York: Bill No. A 296 would assess a tax on electronic cigarettes and electronic cigarette nicotine cartridges at a tax rate of 75% of the wholesale price.
North Dakota: Bill No. H 1133 would change the method of taxation on other tobacco products, not including moist snuff or chewing tobacco, to 28% of the wholesale price.
Oregon: Bill Nos. D 1037 and D 2268 expand the definition of tobacco products for purposes of taxation to include electronic cigarettes and nicotine solution. Bill No. D 2565 increases the tax on cigarettes from $1.31 per pack to $2.56 per pack while Bill No. D 317 increases the tax on cigarettes from $1.31 per pack to $3.15 per pack.
Virginia: Bill No. HB 1310 imposes a tax on electronic cigarettes and other vapor products at a rate of 40 cents per millimeter of nicotine liquid solution or other material containing nicotine and authorizes certain cities and certain counties to impose a tax on vapor products.
Wyoming: Bill No. D 316 raises the tax on cigarettes from 60 cents per pack to $1.00 per pack and increases the tax on other tobacco products from 20% to 33% of the wholesale price.