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NAQC Newsroom: Research

State Cigarette Excise Taxes – United States, 2010-2011

Thursday, April 12, 2012  
Posted by: Natalia Gromov
Centers for Disease Control and Prevention. MMWR Weekly. March 30, 2012;61(12):201-204.
This study examined state cigarette excise taxes during 2010-2011. Results showed that during that period, eight states increased their cigarette excise taxes ranging from increases of $0.40 to $1.60, and one state decreased its tax. Mean state tax increased from $1.34 in 2009 to $1.46 in 2011. Missouri now has the lowest cigarette excise tax at $0.17 per pack. California, Missouri, and North Dakota are the only states that have not increased their state cigarette excise tax since 2000. State cigarette excise taxes in major tobacco-growing states and bordering southeastern states remain substantially lower than state cigarette excise taxes in the rest of the United States. The major tobacco-growing states typically have higher smoking rates and do not have strong tobacco control policies and interventions in place. For example, in addition to having lower excise taxes, no southern state has a comprehensive state smoke-free law that prohibits smoking in workplaces, restaurants, and bars. In addition to reducing smoking rates, cigarette excise tax increases have been shown to increase state revenue despite consumption declines, increases in the number of smokers quitting, and any increase in smuggling or tax avoidance. During 1990–2000, all states that increased their cigarette excise tax by at least $0.10 per pack also increased cigarette tax revenue.

Excise tax increases can provide a revenue source to fund and expand comprehensive state tobacco control programs. The Institute of Medicine recommends that all states dedicate revenue by statute to fund tobacco prevention programs at the state-specific levels recommended by CDC. However, only one state (South Carolina) that increased its tax in 2010 or 2011 dedicated any revenue from its increase for tobacco prevention, even though such a move has been shown to produce a strong return on investment. For example, when California increased its cigarette excise tax in 1988, approximately $0.05 per pack was dedicated to state tobacco control and prevention programs. During the first 15 years of the California tobacco control program, the state invested $1.8 billion in cigarette excise tax revenue in the program, resulting in $86 billion in health-care cost savings.

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