Colorado's New Tobacco Tax Brings in Big Bucks

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Colorado's New Tobacco Tax Brings in Big Bucks

COLORADO -- Cigarette sales in Colorado fell 22 percent this year after the state increased the tobacco tax by 64 cents a pack, but even with the drop in sales, the new tax is bringing in nearly $133 million in additional revenue this year, reported the Rocky Mountain News .

From January through November of this year, nearly 4.2 billion cigarettes were sold in Colorado, the Revenue Department says, down from more than 5.3 billion during the same period in 2004.

The state cigarette tax, which now totals 84 cents a pack, helps fund Medicaid for disabled children, along with other health programs, including clinics serving uninsured patients, tobacco education, and research grants for treating breast and cervical cancer.

Even though Colorado is reaping big money from the tax, no one can say how much revenue the state is losing from smokers buying online to evade the levy, according to the report.

Colorado combats Internet sales by confiscating the cigarettes when it discovers them.

Despite declining over-the- counter sales, Colorado still expects to bring in more than $160 million per year from the cigarette tax in the next five years, according to the newspaper.

"Despite Internet sales, every single state that has increased cigarette taxes has brought in more income," Eric Lindblom, director for policy research for the Campaign for Tobacco-Free Kids, told the Rocky Mountain News . "The taxes always bring in big chunks of money."