Higher Cigarette Taxes Push Down Sales

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Higher Cigarette Taxes Push Down Sales

RENO, Nev. -- A cigarette tax hike in Nevada has resulted in a decrease in cigarette sales, according to the Reno (Nev.) Gazette-Journal.

Nevadans and their visitors smoked less but drank more since the state raised taxes on cigarettes and alcohol this summer, newly released state figures show.

The increased sin taxes have funneled $53.6 million into state coffers since the start of the fiscal year, according to the news report.

The state has collected about $1.8 million less than projected due to the lag in cigarette sales in the first three months of the fiscal year that began July 1, the news source reported. Liquor taxes have generated about $400,000 more than projected.
Tax officials said it is too early to tell whether the annual revenue will meet the projections the Legislature used to build the state's budget for the next two years.

The state has sold 13 percent fewer cigarette stamps since an 80-cent-a-pack tax went into effect July 22 -- the same day a two-month legislative battle over new taxes ended. The tax department reported 11.6 million fewer tax stamps have been sold since July 1 compared to the same time period last year, according to the Reno Gazette-Journal.

As of November, the state has collected $42.5 million in cigarette taxes.
"With respect to cigarettes, we don't know what is actually happening out in the marketplace," said Dino Dicianno, deputy tax director, according to the report. "Have they quit smoking? Are they purchasing cigarettes across the border or on the Internet? What's going on?"

Nevada store clerks reportedly said more people are buying roll-your-own tobacco, a pouch of which can yield 200 homemade cigarettes.

Anti-tobacco advocates, who lobbied for the cigarette tax increase, lauded the shrinking stamp numbers, the news report stated.