Tobacco Taxes on the Rise

The taxman cometh, and he wants you to pay more for tobacco products this time around. I love my home state, but I must admit that Californians' tendency to tax anything and everything with which we disagree or disapprove is about to drive me over the edge!

Last night, on the way home from class, I had to stop at the local 7-11 for a pack of cigarettes. As I walked into the store, I noticed a neon orange sign on the front door suggesting that smokers stock up before the latest cigarette tax takes effect on April 1. "Crap!" I thought, "Another tobacco tax coming down the pike?" So this morning, I decided to do some investigation to uncover the when, where, and how much of the latest round of tobacco taxes across the country.

In California, AB 89, which passed the Legislature on January 5, 2009, increases the tax on cigarettes only. On April 1, 2009, each pack of cigarettes will go up in price by $1.05. Although I scoured the bill, which you can read here, I didn't find any increase for other tobacco products. The cost of hookah tobacco should not go up as a result of AB 89; the language of the bill is specific to cigarettes. We got somewhat lucky this time around. Other states, though, weren't as fortunate.

  • Arkansas' HB 1204 will increase the tax on non-cigarette tobacco products from 32 precent of the wholesale price to 68 percent. The governer's website has more information on the tax increase and the allocation of the funds collected.
  • Kentucky's HB 144 doubles the current tax on "snuff and other tobacco products," so that means hookah tobacco prices will increase.

Several other states have tobacco legislation in the works, but the process that each state requires for a bill to pass into law has not been completed yet. If you like in Alabama, Georgia, Hawaii, Illinois, Mississippi, Missouri, Montana, New Hampshire, New York, Oregon, Pennsylvania, South Carolina, or South Dakota, you need to know that your states' governments are actively pursuing an increase in tobacco taxes. To find out more, check out the 2009 Proposed State Tobacco Tax Increase Legislation website.

Maybe it's time to learn the fine art of tobacco agriculture!

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