States Target Tobacco Taxes

The 2023 state legislative year is underway and there are several state legislatures that have bills to raise cigarette, tobacco and vape taxes and ban flavored tobacco products.

During this legislative cycle many states have introduced bills to increase cigarette/OTP and vapor taxes. So far, a total of 23 states have introduced legislation in 2023. These states include Alaska, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Massachusetts, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, Mexico, New York, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming. Montana is the only state looking to lower the tax rate on cigars.

While 23 states is a considerable number, it is less than what we have seen in previous years. Which raises the question as to why. A possible explanation is that many states have a budget surplus this year, negating a need to raise taxes. Much of the legislation seems to have stalled in either the respective Senate or House chambers. As of publication, only two states—New Mexico and Utah—have sent a bill to their governor to be reviewed and signed.

In reviewing 2023’s proposed flavor ban bills across all 50 states, there were several different types of flavor bans proposed. These bans included banning menthol cigarettes, flavored smokeless tobacco, flavored cigars, flavored electronic cigarettes, flavored hookah tobacco and electronic cigarette/vapor flavor bans. Sixteen states introduced bills to ban all flavored tobacco products. These states included Connecticut, Hawaii, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, New Mexico, New York, Ohio, Oregon, Texas, Vermont and Washington. Several of these proposals have died, but there are still several that continue to move through the process.

There were 12 states that introduced bills that looked to ban all flavored vapor products. These included: Alaska, Georgia, Hawaii, Idaho, Iowa, Mississippi, Nebraska, New York, Texas, Utah, Virginia and Washington.

As the first quarter of 2023 wraps up and we look to the remainder of the year and into 2024, there is no doubt that legislation pertaining to tobacco and vapor products will continue for the foreseeable future.

Source: CSP Daily