State Cigarette Taxes 2013

Cigarette taxes are a means both to raise state revenue and to discourage the use of tobacco. Cigarette taxes range significantly across states, as does the amount of revenue collected on such taxes. Revenues from state taxes on tobacco totaled more than $17 billion in 2012, representing 2.2 percent of all state tax revenue. 

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Every state imposes a tax on cigarettes, but those taxes vary considerably.1
  • Among the states with the lowest taxes on cigarettes are Missouri at 17 cents per pack, Virginia at 30 cents per pack, and Louisiana at 36 cents per pack.
  • Missouri and Virginia are two of only six states that allow counties and/or cities to impose an additional tax on cigarettes. Missouri’s local taxes range from 4 to 7 cents, while Virginia’s local taxes range from 2 to 15 cents.
  • Fourteen states plus the District of Columbia impose a tax of $2 or more on a pack of cigarettes, with the highest taxes in New York ($4.35 per pack plus $1.50 per pack in New York City), Rhode Island ($3.50 per pack) and Connecticut ($3.40 per pack).
  • The U.S. median tax is $1.36 per pack. 
Many states have regularly increased their cigarette taxes by modest amounts since 2000.
  • Cigarette taxes have increased, across all states, 107 times since 2000.2
  • From 2000 to 2012, Hawaii raised cigarette taxes most frequently—nine times—while Connecticut, New Jersey, Rhode Island and Vermont each raised taxes five times. Thirty-three states raised taxes one or two times over this period.
  • The largest single tax increase since 2000 happened in New York in 2010, when taxes rose by $1.60 per pack. The smallest increase, adopted by Rhode Island in 2012, was 3 cents per pack. The median tax increase over this time was 44 cents per pack.
  • The highest number of state changes to cigarette taxes over the past 12 years occurred in 2002 and 2003, when 39 states increased the taxes. 
  • The largest average increase in cigarette taxes since 2000, however, occurred in 2008 and 2010. In 2008, the average tax increase was 89 cents per pack, while it increased by 88 cents per pack in 2010.
  • Only California, Missouri and North Dakota have not raised cigarette taxes at least once since 2000. 
Revenues from state taxes on tobacco totaled more than $17 billion in 2012, representing 2.2 percent of all state tax revenue. Revenue has been falling, however, since the Great Recession.3
  • From 2002 to 2012, state tobacco tax revenues increased 88 percent, from $9.1 billion to $17.1 billion in nominal terms. In 2012 dollars, tobacco tax revenues in 2002 were $11.6 billion. That means, when adjusted for inflation, state tobacco tax revenues actually grew by 46.8 percent. 
  • From 2004 to 2009, inflation-adjusted tobacco tax revenue increased an average of 3.6 percent annually, but has fallen every year since 2010.
  • States, on average, collected $341.7 million in 2012 in tobacco tax revenue, ranging from a low of $26 million in Wyoming to a high of $1.63 billion in New York.
  • Average state tobacco tax revenue was $64.19 on a per capita basis; it ranged from a low of $5.56 in South Carolina to a high of $162.91 in New Hampshire.
  • South Carolina relied on tobacco tax revenue the least, with tobacco taxes representing only 0.3 percent of total tax revenue, while tobacco taxes represented the largest chunk of total revenues in New Hampshire at 9.8 percent.


RESOURCES

1 All references to cigarette tax rates, unless otherwise noted, come from the Federation of State Tax Administrators and are current as of January 1, 2013.
2 Only two states have lowered cigarette taxes since 2000. New Hampshire decreased its rate by 10 cents per pack in July 2011, bringing its rate to $1.68 per pack. Oregon also decreased its rate by 10 cents per pack in January 2004, bringing its rate to $1.18.
3 Author’s calculations of data from the U.S. Census Bureau, Annual Survey of State Government Tax Collections.
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