Five States to Increase Cigarette Taxes on July 1
New Federal Law Cracks Down on Tax Evasion through Internet Cigarette Sales
June 28, 2010
Washington, D.C. - To reduce smoking and combat budget deficits, five states will implement cigarette tax increases on July 1.
The five states are: New York, $1.60 increase to $4.35 per pack; Hawai'i, 40 cents to $3 per pack; New Mexico, 75 cents to $1.66 per pack; South Carolina, 50 cents to 57 cents per pack; and Utah, $1 to $1.70 per pack. On May 1, Washington increased its cigarette tax by $1 to $3.025 per pack.
New York's increase will give it the highest state cigarette tax at $4.35 per pack, while South Carolina's increase — its first since 1977 — means it will no longer have the lowest cigarette tax in the nation. Missouri will now have the lowest cigarette tax at just 17 cents a pack. After the July 1 increases, the average state cigarette tax will be $1.45 per pack, while the federal government levies an additional $1.01 per pack.
Also taking effect this week, a new federal law will curb tobacco tax evasion and curtail sales of low-cost cigarettes and other tobacco products over the Internet and through the mail. As required by the law, the Prevent All Cigarette Trafficking (PACT) Act, the U.S. Postal Service on Tuesday will institute a ban on mailing tobacco products (with very minor exceptions). The law also requires Internet tobacco sellers to pay all applicable taxes and affix tax stamps before delivery to any customer; requires that age and identification of purchasers be checked at both purchase and delivery; and provides government officials with new tools to crack down on tobacco tax evasion.
'These actions to increase tobacco taxes and prevent tax evasion are a huge victory for the nation's health that will save many lives and billions of dollars in tobacco-related health care costs,' said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids. 'Higher tobacco taxes continue to be a win-win-win for the states — a health win that reduces smoking and saves lives, a revenue win that helps balance budgets and fund critical programs, and a political win that is popular with voters. We applaud the state and federal officials who have supported these important measures.'
The evidence is clear that increasing the cigarette tax is one of the most effective ways to reduce smoking, especially among kids. Scientific studies show that every 10 percent increase in the price of cigarettes reduces youth smoking rates by about 6.5 percent and overall cigarette consumption by about four percent. The combined effect of the state cigarette tax increases approved so far this year will be to:
- Prevent more than 262,000 kids from starting to smoke;
- Spur more than 140,000 adult smokers to quit;
- Prevent more than 120,000 smoking-caused deaths;
- Produce more than $5.9 billion in long-term health care savings;
- Raise more than $561 million in annual revenue.
States with the lowest cigarette tax rates are Missouri (17 cents per pack), Virginia (30 cents), Louisiana (36 cents), Georgia (37 cents) and Alabama (42.5 cents).
The Campaign for Tobacco-Free Kids urges all states to increase tobacco taxes as a proven way to reduce smoking and other tobacco use, save lives and raise revenue. The Campaign also urges states to use more of their tobacco tax and tobacco settlement revenues to fund tobacco prevention and cessation programs at levels recommended by the U.S. Centers for Disease Control and Prevention.
Tobacco use is the leading preventable cause of death in the United States, killing more than 400,000 people and costing $96 billion a year in health care costs. Every day, another 1,000 kids become regular smokers — one-third of them will die prematurely as a result.