Cigarette tax battle heats up with new study
As NH Journal reported last week, a proposal to reduce the statewide tax on cigarettes and other tobacco products is getting attention as the budget process begins to get moving. The New Hampshire Grocer’s Association (NHGA) has come out in support of the proposal, releasing an economic impact study that touts the benefits of the tax cut.
The study, commissioned by NHGA and performed by two Southern New Hampshire University professors, concludes that the 10 cent per pack tax decrease would generate a projected $13 million in additional tax revenue by both increasing in-state sales, and attracting out-of-state shoppers to cross the border to buy tobacco products, as the cut would make NH prices significantly lower than those of surrounding Maine, Vermont, and Massachusetts.
“This study clearly shows that a decrease in the state cigarette tax will bring more consumers into New Hampshire,” said NHGA President John M. Dumais in a press release, “Not only would these consumers purchase cigarettes, but they would buy other items such as gasoline, beer and wine. We knew there would be some economic benefit to lowering the tax, but never realized, until this study, how substantial it would be.”
Proponents of the bill, which include NH House Finance Committee Chairman, Rep. Kenneth Weyler, are quick to point out that the current tax, which has risen 34 percent since 2009, has a inequitable impact on the poor, who have a greater tendency to be smokers. “Such a decrease would also help to reduce the tax burden on the poor, who are least able to fund a disproportionate share of the state budget,” said Dumais.
The bill is currently under review by the House Ways and Means Committee, but is due to be either sent to the House floor or voted down in Committee by March 10th.