Tobacco

A Mid-Year Review of State Tobacco Tax Increases

With one-half of the year now over, only three states have raised cigarette and/or other tobacco product tax rates. In fact, 35 states have now adjourned their respective 2012 legislative sessions and another four states (Montana, Nevada, North Dakota and Texas) did not have a state legislative session this year.

Illinois has enacted a law to raise cigarette taxes by $1 per pack, increase the tax on other tobacco products to 36%, tax moist snuff at 30 cents per ounce, and tax little cigars at the cigarette tax rate.

Maryland raised the tax on cigars, excluding premium cigars, to 70% and also doubled the tax on other tobacco products from 15% to 30%. The State of Rhode Island raised the cigarette tax by 4 cents per pack to a new rate of $3.50 per pack. In Vermont, the legislature passed a bill to tax little cigars at the state’s cigarette tax rate.

Eleven state legislatures are still in session, including California, Illinois, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina and Wisconsin. Of these 11 states, California voters rejected a $1-per-pack cigarette tax increase and an equivalent increase in the state’s OTP tax rates; Illinois has already passed a cigarette and tobacco tax increase as cited above; New York failed to raise tobacco taxes as a part of a budget-balancing bill; and the other states either do not have a tobacco tax increase bill introduced or, if so, the bill has not passed out of a legislative committee.

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