2017 State Tobacco Legislation

Looking back at tax and minimum-age activity.

MINNEAPOLIS -- Now that 2017 has come to a close, NATO summarizes the outcome of the most relevant state tobacco legislation across the country in this review of the year's legislative actions.

State Tobacco-Tax Activity

2017 produced an increase from previous years in state legislatures considering new excise taxes on cigarettes. In total, 27 states, the District of Columbia and Puerto Rico considered legislation that was enacted, failed or represents an ongoing threat to raise cigarette excise-tax rates in some form. These states are: Connecticut, Delaware, Florida, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, West Virginia and Wyoming.

Nineteen states failed to pass the legislation. However, three states and Puerto Rico did enact tax changes in 2017:

  • Delaware: a cigarette-tax increase of 50 cents per pack.
  • Rhode Island: increased its cigarette-tax rate by 50 cents.
  • Connecticut: 45-cents-per-pack increase to $4.35.
  • Puerto Rico: increased per pack to $5.10 from $2.23.

OTP Excise
In 2017, the number of states that considered other-tobacco-product (OTP) state excise-tax increases reached 23 in addition to Puerto Rico, with only two and Puerto Rico formally enacting increases. Those legislatures are from:

  • Delaware: 15% increase on OTP product and a 38-cent tax increase on moist snuff.
  • Connecticut: an increase on snuff of $2 per ounce to $3.
  • Puerto Rico: a cigar-tax increase from $2.23 to $5.10.

E-Cigarettes and Vapor Products
Over the course of 2017, 24 states considered changes in e-vapor taxes. Out of the 24 states considering changes, 19 of those failed to implement anything. However, two states were successful in enacting new increases: 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.

Finally, the Kansas legislature voted to decrease the excise tax on vapor products from 20 cents per milliliter of e-liquid to 5 cents.

Tobacco-Tax Ballot Measures
Only in California during 2017 did voters approve a ballot question from November of 2016 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. Two other states, Oregon and South Dakota, currently have pending tobacco-tax ballot measures.

Tax Reduction: Cigarette Excise/OTP
2017 produced one state legislature that decreased the taxes levied on retailers and consumers of tobacco products. Minnesota removed the automatic inflator on the excise tax per pack of cigarettes and froze the cigarette rate per pack at $3.04. Additionally, Minnesota reduced the tax cap on premium cigars from $3.50 to 50 cents per cigar.

Purchase Age Increase Activity

Overall, 2017 saw 28 states consider legislation to raise the legal age to purchase tobacco products to either 19 or 21. Out of the 28 states, three (Oregon, New Jersey, and Maine) enacted minimum-purchase-age increases to 21 in 2017.

These states join California and Hawaii, which brings the nationwide total to five states that currently have 21 as the minimum legal age to purchase.

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