Discuss Underground Economy |Business Finance – Economics
State Tax Rank State Tax Rank State Tax Rank Alabama $0.675 40th Louisiana $1.08 34th Oklahoma $1.03 35th Alaska $2.00 13th Maine $2.00 13th Oregon $1.32 30th Arizona $2.00 13th Maryland $2.00 13th Pennsylvania $2.60 10th Arkansas $1.15 33rd Massachusetts $3.51 4th Rhode Island $3.75 3rd California $0.87 37th Michigan $2.00 13th South Carolina $0.57 45th Colorado $0.84 38th Minnesota $3.00 8th South Dakota $1.53 26th Connecticut $3.90 2nd Mississippi $0.68 39th Tennessee $0.62 42nd Delaware $1.60 24th Missouri $0.17 51st Texas $1.41 27th DC $2.50 12th Montana $1.70 21st Utah $1.70 21st Florida $1.339 29th Nebraska $0.64 41st Vermont $3.08 6th Georgia $0.37 49th Nevada $1.80 19th Virginia $0.30 50th Hawaii $3.20 5th New Hampshire $1.78 20th Washington $3.025 7th Idaho $0.57 45th New Jersey $2.70 9th West Virginia $1.20 32nd Illinois $1.98 18th New Mexico $1.66 23rd Wisconsin $2.52 11th Indiana $0.995 36th New York $4.35 1st Wyoming $0.60 43rd Iowa $1.36 28th North Carolina $0.45 47th Puerto Rico $3.40 NA Kansas $1.29 31st North Dakota $0.44 48th Guam $3.00 NA Kentucky $0.60 43rd Ohio $1.60 24th Northern Marianas $1.75 NA
Table shows all cigarette tax rates in effect as of August 1, 2016 (PA effective 8/1/16). Since 2002, 47 states and the District of Columbia have increased their cigarette tax rates 126 times. The states in bold have not increased their tax for at least 10 years (since 2006 or earlier). Currently, 34 states, DC, Puerto Rico, the Northern Marianas, and Guam have cigarette tax rates of $1.00 per pack or higher; 16 states, DC, Puerto Rico, and Guam have cigarette tax rates of $2.00 per pack or higher; eight states, Puerto Rico and Guam have cigarette tax rates of $3.00 per pack or higher; and one state (NY) has a cigarette tax rate more than $4.00 per pack. Tobacco states are KY, VA, NC, SC, GA, and TN. States’ average includes DC, but not Puerto Rico, other U.S. territories, or local cigarette taxes. The median tax rate is $1.53 per pack. AK, MI, MN, MS, TX, and UT also have special taxes or fees on brands of manufacturers not participating in the state tobacco lawsuit settlements (NPMs).
The highest combined state-local tax rate is $6.16 in Chicago, IL, with New York City second at $5.85 per pack. Other high state-local rates include Evanston, IL at $5.48 and Juneau, AK at $5.00 per pack. For more on local cigarette taxes, see: http://tobaccofreekids.org/research/factsheets/pdf/0267.pdf.
Federal cigarette tax is $1.01 per pack. From the beginning of 1998 through 2002, the major cigarette companies increased the prices they charge by more than $1.25 per pack (but also instituted aggressive retail-level discounting for competitive purposes and to reduce related consumption declines). In January 2003, Philip Morris instituted a 65-cent per pack price cut for four of its major brands, to replace its retail-level discounting and fight sales losses to discount brands, and R.J. Reynolds followed suit. In the last several years, the major cigarette companies have increased their product prices by almost $1.00 per pack. Nationally, estimated smoking-caused health costs and lost productivity totals $19.16 per pack.
The weighted average price for a pack of cigarettes nationwide is roughly $6.01 (including statewide sales taxes but not local cigarette or sales taxes, other than NYC’s $1.50 per pack cigarette tax), with considerable state-to-state differences because of different state tax rates, and different manufacturer, wholesaler, and retailer pricing and discounting practices. AK, DE, MT, NH & OR have no state retail sales tax at all; OK has a state sales tax, but does not apply it to cigarettes; MN & DC apply a per-pack sales tax at the wholesale level; and AL, GA & MO (unlike the rest of the states) do not apply their state sales tax to that portion of retail cigarette prices that represents the state’s cigarette excise tax.
Campaign for Tobacco-Free Kids, July 14, 2016 / Ann Boonn
For additional information see the Campaign’s website at http://www.tobaccofreekids.org/what_we_do/state_local/taxes/. Sources: Orzechowski & Walker, Tax Burden on Tobacco, 2014; media reports; state revenue department websites.
STATE CIGARETTE EXCISE TAX RATES & RANKINGS
