Pennsylvania Raises Cigarette Taxes and Sets OTP Tax Rates

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Pennsylvania

On July 13, 2016, Pennsylvania Governor Tom Wolf signed into law House Bill 1198, which increases the state cigarette tax by $1 per pack, assesses a new tax on other tobacco products of 55 cents per ounce (excluding cigars), and enacts a new tax on electronic cigarettes and e-liquids at a rate of 40 percent of the purchase price charged to retailers reports NATO. The new law also imposes a floor stocks tax on both wholesalers and retailers that have cigarettes, tobacco products (excluding cigars), e-cigarettes and e-liquids in inventory as of Aug. 1, 2016. The floor tax is to be reported and paid within 90 days of this effective date. The OTP and electronic cigarette/vapor taxes go into effect on Oct. 1, 2016, with the floor stocks tax to be reported and paid within 90 days of this later effective date.

The Pennsylvania Department of Revenue has confirmed that information about the new cigarette and OTP tax rates will be posted on the agency’s website soon with the necessary forms needed to report and file the floor stocks tax. Retailers will also receive a mailing from the Department of Revenue regarding the floor stock tax requirement. “NATO will follow up and include a link to the revenue department’s website page with the new floor stocks tax forms,” says Tom Briant, the association’s executive director.