The following are roundups of legislative activity at the state and local levels.
Cigarettes and Tobacco Products
The year 2017 produced an increase in state legislatures considering new taxes on cigarettes and tobacco products. This year, 28 states considered bills to raise cigarette and/or tobacco product tax rates in some form. These states include Delaware, Florida, Hawaii, Indiana, Kansas, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, West Virginia, Wyoming and Utah.
However, only three of these states passed and enacted tax changes: Delaware (50 cents per pack cigarette tax increase, 15 percent increase on Other Tobacco Products [OTP] and 38 cent tax increase on moist snuff); and Rhode Island (increased tax rate on cigarettes by 50 cents).
We also saw one state legislature pass a measure and sign into law a decrease on uncompetitive taxes levied on retailers and consumers of tobacco products. Minnesota removed the automatic inflator on the excise tax per pack of cigarettes and froze the rate per pack at $3.04. Additionally, Minnesota reduced the tax cap on premium cigars from $3.50 to 50 cents per cigar.
Finally, California voters approved a ballot question last November that raised the state’s cigarette tax by $2 per pack and also increased the OTP tax to 65.08 percent. These tax increases went into effect on July 1, 2017.
E-cigarettes and Vapor Products
This year has also produced an increasing number of states introducing legislation to assess a new tax on e-cigarettes and vapor products. So far this year, 15 states considered bills to enact a new tax: Arizona, Delaware, Hawaii, Indiana, Kansas, Massachusetts, Michigan, Montana, New Mexico, New York, North Carolina, Ohio, Oregon, Washington and West Virginia.
Of the bills introduced in these states, only two were enacted into law. Delaware passed a new tax on vapor products at 5 cents per fluid milliliter on nicotine liquid solution, and New York passed a tax modification on vapor products to 40 cents per fluid milliliter of e-liquid.
Further, the Kansas legislature decreased the excise tax on vapor products from 20 cents per milliliter of e-liquid to 5 cents.