This year very few tobacco bills have been enacted into law that would have a negative impact on tobacco retailers. In fact, this is the fourth consecutive year when only a couple of states have enacted higher taxes on cigarettes and other tobacco products. The same holds true for other proposed state level tobacco restrictions including flavor bans and raising the legal age to purchase tobacco products.
Cigarette and OTP Tax Increases
Since January 1 of this year, 22 state legislatures considered legislation to increase cigarette taxes. Only Vermont has enacted a cigarette tax increase, which was 13 cents-per-pack. While the New York and Ohio legislatures are still in session and have bills pending that would increase the state cigarette tax, there are 19 states that did not pass a cigarette tax increase. These 19 states include Alabama, California, Florida, Hawaii, Kansas, Kentucky, Maine, Maryland, Mississippi, Missouri, Nebraska, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Washington, West Virginia, and Wyoming.
While Ohio still has a bill pending to raise the OTP tax rate, those states that did not enact a proposed tax increase this year on other tobacco products include Hawaii, Kentucky, Massachusetts, Missouri, Nebraska, New Jersey, Oregon, Pennsylvania, Vermont, West Virginia, and Wisconsin.
E-Cigarette/E-Vapor Tax Proposals
An increasing number of state legislatures also considered bills to enact a tax on electronic cigarettes and e-vapor products. A bill in North Carolina was enacted into law that assesses a 5 cent per milliliter tax on liquid nicotine. With e-cigarette/e-vapor bills still pending in Michigan, New York and Ohio, 12 other state legislatures did not pass a bill assessing a tax on e-cigarettes or e-vapor products. These 12 states include Delaware, Hawaii, Indiana, Kentucky, New Jersey, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington.
The only other state that previously enacted a tax on e-cigarettes and e-vapor liquids is Minnesota, which assesses a 95% OTP tax rate on e-cigarettes and e-vapor products.
Flavored Tobacco Ban Legislation
The state legislatures in Hawaii, Maryland, and New Jersey considered, but did not pass, bills that would have prohibited the sale of flavored tobacco products. A bill remains pending in the New York legislature that would ban the sale of flavored tobacco products.
Age 21 Bills
Nine states had bills introduced to raise the legal age to purchase tobacco. Bills to raise the legal age to 21 failed to pass in Colorado, Hawaii, Maryland, New Jersey, Rhode Island, Utah and Vermont. Bills to increase the legal age remain pending in Massachusetts and New York.
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