Nevada to Seek Cigarette Tax Hike

CARSON CITY -- An anti-smoking representative told a state panel Tuesday that lawmakers in 2003 should consider increasing the cigarette tax by as much as 50 cents a pack.

Denise Brodsky, executive director of the Nevada Tobacco Prevention Coalition, said a tax increase would generate tens of millions of dollars for the general fund, help fund anti-smoking efforts and reduce overall smoking rates for adults and children, the Las Vegas Review-Journal reported.

Cigarette taxes are 35 cents a pack and were last raised in 1989. Cigarette tax revenues were $43.6 million in fiscal year 2000-01, which ended June 30, and are projected to be $92.2 million in the two-year, $3.8 billion state budget. The coalition is seeking an increase to 85 cents a pack.

The idea of a cigarette tax increase will be presented to the Governor's Task Force on Tax Policy in Nevada next week, Brodsky said.

Alfredo Alonso, government affairs manager for the Lionel, Sawyer & Collins law firm and a lobbyist for tobacco company R.J. Reynolds, said an increase in the price of a pack of cigarettes might not reduce smoking or raise additional revenue. "People who can't afford cigarettes due to tax increases look to the gray market or travel across state lines where they are cheaper," he said.

Alonso estimated states that have raised cigarette taxes significantly, notably California, have seen that happen.

The gray market is the sale of cigarettes that were shipped out of the country but brought back and sold for reduced prices. People who patronize such back-room merchants purchase cigarettes, but the state does not collect taxes on them.