Experiencing an acute need to fill the cash-strapped treasuries, the state legislatures are getting deeper in the smokers’ pockets, increasing tobacco taxes to help balance the holes in the budgets.

Over the past three months of 2010, lawmakers have approved tax increase by $1 a pack in Utah, and a 75-cent-hike was as well approved in New Mexico. More than 10 states across the nation have been examining hikes in tobacco excise taxes, including Georgia and South Carolina, where tobacco growing is a major agricultural activity.

Last year excise taxes on cigarette were increased in 14 stated and District of Columbia. Well, that is a rather rare case, as the Center for Disease Control and Prevention statistics shows that last year was only the tenth time in the U.S. history that more than 10 states have increased taxes on tobacco at once.

Peter Fisher, senior regional manager of the Tobacco-Free Kids Campaign admitted that the primary factor that encourages the majority of legislators to rise taxes is additional revenues, as the budget shortages has definitely contributed to the increase in the number of state legislatures planning such taxes.

The average excise duty of cigarettes across the nation is currently at $1.34 per package of 20 cigarettes. The federal tax on cigarettes, implemented last April is $1.01 per pack. The highest state excise tax on cigarettes is in Rhode Island at $3.46 per pack, whereas South Carolina’s is home to the lowest tax at 7 cents per pack. Approximately 46 million Americans are smokers.

“Higher taxes will force smokers to hit the road and purchase their smokes in neighboring states with lower taxes, or even opt for illegal market”, complained Frank Lester, communications manager for Reynolds American, the second largest tobacco company in USA, adding that smokers are struggling as the majority of them have low or mediate incomes, while 20% even live below the poverty line.

Budget shortages overcame tobacco industry lobby last week in New Mexico, when Gov. Bill Richardson signed into law the 75-tax increase, introduced by state Rep. Gail Chasey.

The following states are also considering tax hikes:

• South Carolina: House legislators approved a 30-cent increase two weeks ago; the bill is currently pending in the Senate.
• Washington: Legislators are eager to increase the tobacco by $1 per pack.
• Kansas: Senate Taxation Committee turned down the Gov. Mark Parkinson proposal to increase state cigarette tax by 55 cents. However, a smaller increase is likely to be approved during the current session.
• Georgia: A proposal to increase the state 37-cent tobacco tax by $1 already has gathered the 91 votes needed to be approved by the House; however, it is pending in the taxation committee and is likely to be turned down. Rep. Ron Stephens, the author of the proposal, said that it would not succeed due to this year’s elections, as it is an unpopular measure among the electorate.

By Sara Norton, Staff Writer. Copyright © 2010 Cigarette-Store.org. All rights reserved.