Tobacco

2017 Tobacco Excise-Tax Scorecard

MINNEAPOLIS -- During 2017, legislative bills to raise cigarette- and/or tobacco-product excise taxes were considered by 22 state legislatures. Oftentimes, more than one bill to increase these excise taxes was introduced in a given state, and the bills would have different amounts by which the current tax rates would be raised.

Since 2017 is not an election year, the adoption of higher excise taxes is more likely. But only Delaware and Rhode Island have enacted higher cigarette- and/or tobacco-tax increases, so far.

In Delaware, the cigarette tax has been raised by 50 cents a pack to a new tax rate of $2.10 per pack, the other tobacco product (OTP) tax was increased from 15% to 30%, and the tax on moist snuff was raised from 54 cents to 92 cents.

In Rhode Island, the cigarette tax is being raised 50 cents per pack to a new rate of $4.25 per pack. This cigarette tax rate is the second highest in the country, next to New York State at $4.35 per pack.

In Minnesota, two excise-tax changes were enacted into law that are positive for the industry. The excise-tax cap on premium cigars was reduced from $3.50 per cigar to 50 cents per cigar. Also, Minnesota law was changed to repeal the automatic annual increase in the cigarette tax. Each Jan. 1, the state cigarette tax increased automatically by a rate equivalent to the current consumer price index (CPI). This automatic tax inflator will no longer be in effect.

The other states where cigarette- and/or tobacco-tax increase bills were introduced but not adopted include Connecticut, Florida, Hawaii, Indiana, Kansas, Louisiana, Maine, Mississippi, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Oregon, Utah, West Virginia, and Wyoming. States that have year-round legislative sessions that still have tax increase bills pending include Massachusetts and New York.

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