Talk of Tobacco Tax Increases in New Jersey, Maryland

TRENTON, N.J. -- There is a push in at least two states to raise taxes on tobacco products, and while cigarettes are the usual target of tax talk, at least one of these states is taking a look at increasing the levy on other tobacco products as well.

In New Jersey, state Sen. Paul Sarlo (D-Bergen, Essex, Passaic) has sponsored legislation that would tax little cigars the same as cigarettes, according to the Press of Atlantic City. "The additional tax will make little cigars less appealing to current cigarette smokers seeking a cheaper alternative," the bill reads.

Currently, New Jersey's excise tax for a pack of cigarettes is $2.70. This is in addition to the $1.01 federal excise tax. According to the news report, New Jersey collected nearly $742 million in cigarette taxes last year. That was a 4-percent drop, or $33.1 million less, compared to 2008, state Treasury Department data show. However, at the same time, revenue from other tobacco products -- such as cigars, little cigars, chewing tobacco, pipe tobacco and roll-your-own -- increased 26 percent, generating $3.7 million more from lower tax rates.

The state has a wholesale tax on these products that is 30 percent of the price the wholesaler pays the manufacturer, Treasury Spokesman Bill Quinn told the news outlet.

Traveling south on Interstate 95, there is also a movement by a health advocacy group in Maryland to increase taxes across the state's tobacco landscape.

Vincent DeMarco, president of the Maryland Citizens' Health Initiative, said the group will start a campaign next week asking the General Assembly to increase the state's $2-a-pack tax on cigarettes to $3 and raise taxes on other tobacco products, including cigars and smokeless tobacco. He hopes to build on momentum from this year's assembly, in which legislators voted to increase the state's alcohol sales tax from 6 percent to 9 percent after several years of lobbying, as reported by The Washington Times.

Prior to 1999, Maryland taxed smokers 36 cents a pack of cigarettes. That year, the rate was increased by 66 cents. A second increase moved the rate to $1 in 2002, and state lawmakers again raised the tax, to $2 a pack, during their 2007 special session, according to the news outlet.

DeMarco said he would like to see a tax increase passed as early as next year's regular session, but that could prove to be a tall order, said Delegate Jolene Ivey, (D-Prince George's County).

"Once you do something like raise a particular tax, it's a long time before it's raised again," said Ivey, a member of the House Ways and Means Committee, which would have to approve the increase. "I don't see it passing next year or in the foreseeable future."