Tobacco Facts.

the largest federal cigarette excise tax increase in history went into effect, bringing the combined federal and average state excise tax for cigarettes to $2.21 per pack and achieving the Healthy People 2010 (HP2010) objective (27-21a) to increase the combined federal and average state cigarette excise tax to at least $2 per pack. This report summarizes changes in the federal excise tax, as well as state excise taxes for all 50 states and the District of Columbia (DC) from December 31, 1995 to April 1, 2009.* The findings indicate that the federal excise tax increased from 24 cents per pack in 1995 to $1.01 per pack in 2009, and the average state excise tax increased from 32.7 cents per pack to $1.20 per pack during the same period. These increases represent a 321% increase in the federal excise tax and a 267% increase in the average state excise tax since 1995. Price increases should be combined with other evidence-based policy and clinical interventions to meet HP2010 objectives to decrease smoking prevalence and reduce the burden from smoking-attributable death and disease.

Cigarettes and other tobacco products are taxed by federal, state, and local governments in various ways, including excise taxes, which are levied per unit, such as per pack of 20 cigarettes. Federal and state excise tax rates are set by legislation, are contained in federal and state statutes, and typically are collected before the point of sale (i.e., from manufacturers, wholesalers, or distributors), as denoted by a tax stamp.

Federal excise tax data were obtained from an online database that contains statutes and other legislation. From December 31, 2005, to April 1, 2009, the federal excise tax on cigarettes increased three times. As a result of the 1998 budget agreement, the federal cigarette excise tax made a graduated increase from 24 cents per pack to 34 cents per pack on January 1, 2000, and then to 39 cents per pack on January 1, 2002. As a funding mechanism for the State Children’s Health Insurance Program (SCHIP), the federal excise tax on cigarettes increased from 39 cents per pack to $1.01 cents per pack effective April 1, 2009.§ These increases resulted in a 321% overall increase in the federal cigarette excise tax since December 31, 1995.

State excise tax data were collected from the CDC’s State Tobacco Activities Tracking and Evaluation (STATE) system database, an electronic data warehouse that contains tobacco-related epidemiologic and economic data and information on state tobacco-related legislation.¶ The STATE system tracks state laws on excise taxes for cigarettes with excise tax data in effect since the fourth quarter of 1995. This study did not include excise taxes that became effective after April 1, 2009. Consistent with the measure used for the HP2010 objective, average state excise taxes were calculated for this report.

From December 31, 1995, to April 1, 2009, a total of 107 separate cigarette excise tax increases and one decrease occurred in 45 states and DC. The state cigarette excise tax did not change from December 31, 1995, to April 1, 2009, in five states (Florida, Mississippi, Missouri, North Dakota, and South Carolina). As of April 1, 2009, South Carolina had the lowest state cigarette excise tax, at 7 cents per pack, whereas New York had the highest state cigarette excise tax, at $2.75 per pack. The average state cigarette excise tax on April 1, 2009, was $1.20 per pack, a 267% increase from the December 31, 1995, average state cigarette excise tax of 32.7 cents per pack.

The average state cigarette excise tax among major tobacco-growing states (Kentucky, Virginia, North Carolina, South Carolina, Georgia, and Tennessee) was 38.5 cents per pack on April 1, 2009, compared with 7 cents on December 31, 1995 (a 444% increase). Among all other states (including DC) the average cigarette excise tax was $1.31 per pack on April 1, 2009, compared with 36 cents on December 31, 1995 (a 263% increase).

In 2003, New Jersey increased its cigarette excise tax to $2.05 per pack, and Rhode Island increased its state cigarette excise tax to $1.71 per pack; when combined with the federal cigarette excise tax in 2003 of 39 cents per pack, these two states became the first to achieve the HP2010 objective. As of April 1, 2009, 28 states had achieved the HP2010 objective of $2.00 per pack when the state cigarette excise tax was combined with the federal excise tax.

© Copyright: Cdc

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