Policy Update: Tobacco Taxes

 

 In Ohio, we've been talking about tobacco taxes for some time.  In particular, we've supported equalizing Ohio's Other Tobacco Products (OTP) tax with the cigarette tax and using the new revenue to fund comprehensive tobacco prevention and cessation.  Ever wonder what's happening elsewhere?

Congratulations are in order for Massachusetts for a double success!  On August 1st, the cigarette tax rate increased by $1.00, bringing the current rate to $3.51.  This is the second highest in the country.  In addition, the state also increased the OTP tax rate to 210% of the wholesale price for smokeless tobacco and to 40% for the smoking tobacco and cigars.

Also, New Hampshire restored their cigarette and OTP tax rates.  Back in 2011, legislation was passed to decrease both taxes.  A clause was included that if revenue did not increase by July 15, 2013, the old rates would be restored.  Not surprisingly, no new revenue was generated.  Therefore, the cigarette tax returned to $1.78 per pack and the OTP to 65.03% of wholesale price.  Congratulations!

To compare these to Ohio's rates, the cigarette tax is $1.25 per pack and the OTP is 17% of wholesale.  In fact, the OTP tax rate has not been adjusted since its inception in 1996!  The Ohio legislature did consider a proposal to the budget by Sen. Jones that would have increased the OTP tax to 55% of wholesale, but they failed to include it in the budget. 

Watch for updates as efforts continue to advocate for increases to Ohio's tobacco taxes as the state continues to fall behind other states.  Efforts will also continue for comprehensive tobacco prevention funding.  Currently, Ohio is ranked 50th, as in last place, for tobacco prevention and cessation funding.

 

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