New Jersey and Maryland Increase Taxes on Smoking Products

Published on October 28th, 2011 00:00

Currently there is an attempt at least in two states, New Jersey and Maryland, to increase taxes on smoking products, and while cigarettes are the main object of tax discussions, at least one of the above mentioned states is considering increasing the levy on other tobacco products as well.

For instance the New Jersey Senator Paul Sarlo has backed the legislation that would levy little cigars in the same way as regular cigarettes. “Thus the additional tax will make little cigars less attractive to present smokers looking for a lower priced alternative.” At present for a pack of cigarettes New Jersey government introduced a tax at the rate of $2.70, which is an additional to the $1.01 federal excise tax. According to the data, New Jersey collected nearly $742 million in tobacco taxes last year. That was a 4% decrease, or $33.1 million less in comparison to 2008, according to State Treasury Department. However the revenue from other tobacco products as little cigars, cigars, chewing tobacco or roll-your-own raised 26%, producing $3.7 million from lowers tax rates.

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The state has introduced a wholesale tax on these smoking products that constitutes a 30% of the price the merchant pays the producer, Treasury Representative Bill Quinn said in an interview.

In Maryland there is also a movement to increase taxes on tobacco products. The president of Maryland Citizens’ Health Initiative, Vincent DeMarco declared that his group will launch a campaign next week calling the General Assembly to raise the state’s $2-a-pack tax on cigarettes to $3 and increase taxes on other smoking products, including cigars and smokeless tobacco. Vincent DeMarco plans to take advantage of this year’s assembly, in which legislators voted to raise the state’s alcohol sales tax from 6% to 9% after many years of lobbying, according to The Washington Times. Until 1999 Maryland charged smokers 36 cents per package of cigarettes, and namely in this year the rate was increased by 66 cents.

The following growth moved the rate to $1 in 2002, and the state lawmakers once again increased the tax to $2 per package, within their 2007 special session. “I hope that the tax increase would pass as early as possible, even before the next year’s regular session. But I understand that it could be a difficult task,” said DeMarco. “Once you have to do with something like an increase of a tax, it is needed a long time before it is raised again. I do not think that it will pass next year on in the foreseeable future,” stated Ivey, a representative of the House Ways and Means Committee, which would have to adopt the increase.

By Kevin Lawson, Staff Writer. Copyright © 2011 TobaccoPub.com. All rights reserved.

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