New York’s state cigarette tax climbed from $1.50 to $2.75 a pack in June, the highest state cigarette tax burden in the nation.
State officials, including New York Health Commissioner Dr. Richard Daines, assert the higher tax burden will cause about 140,000 state residents to give up smoking, based on reductions from prior cigarette tax hikes.
New York City charges its own $1.50 a pack tax, for state and local taxes totaling $4.25 a pack, said Jeff Lenard, spokesperson for the National Association of Convenience Stores. The federal excise tax on cigarettes adds 39 cents a pack.
Lenard said while cigarette sales at regular retail outlets may drop, the drop is usually greater than the actual reduction in smoking.
“When taxes increase, smoking does not decrease to the extent promised by those who push the increases,” Lenard said.
“People seek out low-tax and no-tax alternatives,” Lenard explained. “They will cross borders or pay bootleggers. In New York State, it’s not difficult to find a Native American reservation [where cigarettes are not subject to government taxes]. Convenience stores, retailers playing by the rules, are punished by these tax policies.”
— Steve Stanek
This article was published in Budget & Tax News, a publication of The Heartland Institute.