Pennsylvania Hikes Cigarette Tax But Stays Last-Standing State With Tax-Free Cigars

The budget-balancing $1-per-pack cigarette tax increase that takes effect Aug. 1 will make Pennsylvania's $2.60 levy the 10th-highest in the nation. New Jersey's $2.70 per pack is ninth.

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By Don Sapatkin

The budget-balancing $1-per-pack cigarette tax increase that takes effect Aug. 1 will make Pennsylvania's $2.60 levy the 10th-highest in the nation. New Jersey's $2.70 per pack is ninth.

In Philadelphia, the tax will be $4.60 per pack, which includes a $2 surcharge added two years ago to help close a looming School District deficit.

The combined state and local tax will make Philadelphia's the third highest among the nation's big cities, after Chicago's $6.16 per pack and New York's $5.85.

The legislation, signed by Gov. Wolf last week as part of an eleventh-hour revenue-raising measure, also for the first time taxes other tobacco products such as smokeless, pipe, and roll-your-own tobacco (55 cents an ounce) -- making Pennsylvania the last state in the nation to impose those taxes, according to Myers. It also adds a 40 percent wholesale tax to electronic cigarettes and nicotine-containing vaping liquid.

Both the non-cigarette tobacco tax and the e-cigarette tax take effect Oct. 1.

Higher taxes are credited as playing a key role in reducing smoking rates around the nation, in combination with raising awareness about the dangers of smoking and policies that ban smoking indoors.

"The evidence is clear that increasing the cigarette tax is one of the most effective ways to reduce smoking," Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, said in a statement. "Nationally, studies show that every 10 percent increase in the price of cigarettes reduces youth smoking by about 7 percent and overall cigarette consumption by about 4 percent."

Pennsylvania's adult smoking rate was 19.9 percent in 2014, according to the Centers for Disease Control and Prevention, well above the national average. Nearly a quarter of Philadelphia adult residents smoke, other surveys have found, among the highest of the nation's major cities.

Pennsylvania last raised statewide cigarette taxes in 2009. While New Jersey's rate change that same year made it one of the highest-ranked states for cigarette taxes, Pennsylvania has taxed slightly below the national average, according to statistics kept by the Campaign for Tobacco-Free Kids.

Myers predicted that the statewide increase would prevent 32,200 premature deaths caused by smoking, spur more than 65,600 current adult smokers to quit, prevent 48,100 children from becoming smokers, and save $2.19 billion in health-care costs.

Pennsylvania remains one of only two states -- the other is Florida -- that does not tax cigars, according to Myers' data.

Although Philadelphia will now have the third-highest combined state and local taxes among the nation's largest cities, total levies are higher in several smaller jurisdictions, including Juneau, Alaska ($5); and all of Cook County, Ill., where the $4.98 state-and-county combination, added to Chicago's $1.18 tax, creates the highest-taxed cigarettes in the nation, the aforementioned $6.16 per pack in the city.

(c)2016 The Philadelphia Inquirer

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Caroline Cournoyer is GOVERNING's senior web editor.
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