Georgia Tobacco Tax Jumps

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Georgia Tobacco Tax Jumps

ATLANTA -- For the first time in 32 years, Georgia has increased its tax on tobacco products.

Starting today the state tax on cigarettes will triple -- from 12 cents per pack to 37 cents.

This sin tax is expected to raise $180 million in general funds for fiscal 2004. Georgia is now ranked 37th in the nation for tobacco taxes, previously it held the 46th spot. There is a worry among tobacco shop owners that locals will flee to Florida, where there are no tobacco taxes -- or to South Carolina where they can save 30 cents, according to the Savannah Morning News

The quarter-a-pack cigarette tax increase was the most Gov. Sonny Perdue could coax from a reluctant legislature. The governor sold the tobacco tax increase to the legislature and public as bringing tobacco prices into line with today's market.

He pointed out that when the 12-cents-per-pack state tax on cigarettes was established in 1971, Georgia's annual per-capita income was $3,600. It since has risen to more than $22,000.

"It's been 30 years since Georgia raised its tobacco tax," Perdue said. "That was an outdated amount."

With strong support from anti-smoking groups, Perdue also pitched the proposal as the best way to discourage young people from smoking. The strongest opposition to the increase came from representatives of the tobacco and convenience store industries, worried about how it would affect sales.

Jim Tudor, a lobbyist for the Georgia Association of Convenience Stores, said the biggest impact could come along Georgia's border with South Carolina. When Georgia's higher tobacco tax takes effect on Tuesday, smokers will be able to drive across the Savannah River into South Carolina and save $3 on a carton of cigarettes.

"Convenience store operators along the borders have felt that if Georgia's retail price for cigarettes was significantly higher than other areas, there would be some migration," Tudor said.

Tudor said the higher tax would make Georgia's cigarette prices just slightly higher than Florida's.