Cigarette Tax – How Much Do You Want to Pay to Smoke?

In the spring of 2009 the federal government increased the federal tax rate on tobacco products from 39 cents a packet to $1.01 USD per packet of tobacco products. So, not only were traditional tobacco cigarettes impacted by the new cigarette tax increases, but also other specialty tobacco products such as little cigars.

Prior to the tax rates, the average cost of a pack of smokes was running at about $5 USD in the United States. For the non-smoking lobby, the cigarette tax increase was good news since past data indicates that increasing cigarette costs by 10% generally equates to a reduction in consumption of approximately 4%. There are an estimated 45 million smokers in the U.S. at the time of this writing. If you have been searching for a reason to quit smoking for good, cigarette taxes could be the catalyst to help you kick the habit.

Big Tobacco, on the other hand, initially leaned forward and increased the cost of a packet of smokes on their own to counteract the effects of smokers that are going to quit smoking for good by raising the cost of a pack of smokes by up to 71 cents a pack.

Many of the states have raised their state cigarette taxes as well, with traditionally tobacco-friendly states such as Kentucky and North Carolina raising their taxes in the past year (although they are still amongst some of the lowest rates in the country).

A common complaint amongst those who actually care about the poor in the United States, is that increased cigarette taxes is simply an added tax on the poor  in this country. In order to raise money for government to combat the medical impact of tobacco on the health care system, we are simply raising the costs on those who can least afford it.

The following are the cigarette tax rates per state as of the end of 2009:

(read in four columns)
State         State Cigarette Tax     Federal Cigarette Tax     Combined Cigarette Tax
Alabama     $0.425             $1.0066         $1.43
Alaska         $2.000             $1.0066         $3.01
Arizona     $2.000             $1.0066             $3.01
Arkansas     $1.150             $1.0066             $2.16
California     $0.870             $1.0066             $1.88
Colorado     $0.840             $1.0066             $1.85
Connecticut     $2.000             $1.0066             $3.01
Delaware     $1.150             $1.0066         $2.16
District of Columbia $2.000         $1.0066         $3.01
Florida         $0.339             $1.0066         $1.35
Georgia     $0.370             $1.0066             $1.38
Hawaii         $2.000             $1.0066         $3.01
Idaho         $0.570             $1.0066             $1.58
Illinois         $0.980             $1.0066             $1.99
Indiana         $0.995             $1.0066             $2.00
Iowa         $1.360             $1.0066             $2.37
Kansas     $0.790             $1.0066             $1.80
Kentucky     $0.600             $1.0066         $1.61
Louisiana     $0.360             $1.0066         $1.37
Maine         $2.000             $1.0066         $3.01
Maryland     $2.000             $1.0066         $3.01
Massachusetts     $2.510             $1.0066         $3.52
Michigan     $2.000             $1.0066             $3.01
Minnesota     $1.504             $1.0066         $2.51
Mississippi     $0.180             $1.0066             $1.19
Missouri     $0.170             $1.0066         $1.18
Montana     $1.700             $1.0066         $2.71
Nebraska     $0.640             $1.0066             $1.65
Nevada         $0.800             $1.0066             $1.81
New Hampshire     $1.330             $1.0066             $2.34
New Jersey     $2.575             $1.0066         $3.58
New Mexico     $0.910             $1.0066         $1.92
New York     $2.750             $1.0066             $3.76
North Carolina     $0.350             $1.0066         $1.36
North Dakota     $0.440             $1.0066             $1.45
Ohio         $1.250             $1.0066             $2.26
Oklahoma     $1.030             $1.0066         $2.04
Oregon         $1.180             $1.0066         $2.19
Pennsylvania     $1.350             $1.0066         $2.36
Rhode Island     $2.460             $1.0066         $3.47
South Carolina     $0.070             $1.0066         $1.08
South Dakota     $1.530             $1.0066         $2.54
Tennessee     $0.620             $1.0066         $1.63
Texas         $1.410             $1.0066             $2.42
Utah         $0.695             $1.0066             $1.70
Vermont     $1.990             $1.0066         $3.00
Virginia         $0.300             $1.0066             $1.31
Washington     $2.025             $1.0066         $3.03
West Virginia     $0.550             $1.0066             $1.56
Wisconsin     $1.770             $1.0066         $2.78
Wyoming     $0.600             $1.0066             $1.61
Puerto Rico     $1.230             $1.0066             $2.24

Facts related to Cigarette Tax Increases:

– Only 12 states dedicate significant portions of their cigarette tax revenue towards tobacco cessation and control programs: Arizona, California, Colorado, Idaho, Iowa, Louisiana, Michigan, New Jersey, Oklahoma, Oregon, South Dakota, and Utah
– The estimated health costs per packet of tobacco cigarettes sold in the United States today is $7.17 per packet.
– The CDC estimates that cigarette smoking is responsible for $193 billion USD annually in health-related costs.
– When cigarette tax increases occur, stockpiling normally results which indicates a temporary drop in cigarette sales.