Lawmakers to Consider Lowering Cigarette Tax Next Week
Saturday, April 07, 2012
The House Finance Committee next week will discuss legislation proposed by State Rep. Robert Phillips that would lower the cigarette tax by $1 per pack.
Similar to a bill he introduced last year, the legislation aims to draw more revenue back into Rhode Island with lower prices. The bill, Phillips says, would make Rhode Island, which has one of the highest cigarette taxes in the nation more competitive with Massachusetts and Connecticut
“I know we’re in a constant state of worry over trying to find more money, but critics of this bill who say decreasing the cigarette tax will have a negative effect on state revenues have a very short-sighted view of how this could help us,” Phillips said earlier this year. “We need to think smart about handling our cigarette tax, and that means looking at it differently than other states do. Unfortunately, we live in a small state. It’s easy to drive over the border into Massachusetts and Connecticut even if you’re not living in a border community. That’s not a problem other states have right now.”
Rhode Island’s cigarette tax has remained at $3.46 per pack since 2009, but Phillips noted if the tax decrease is successful in bringing more customers back inside the state's borders, those very same individuals are more likely to make other purchases at stores where cigarettes are sold.
“What it translates into is more money for Rhode Island,” said Representative John G. Edwards (D-Dist. 70, Tiverton, Portsmouth), a co-sponsor of the bill. “I live in a border community as well, and I honestly believe the cigarette tax in its present form is dangerous to our local businesses. The economy isn’t booming right now, so our small businesses are struggling as it is. We need to stay competitive. Vendors in my community often say that people will come into their stores to buy a pack of cigarettes and leave with newspapers, candy or other items, too.”
In January, Massachusetts Gov. Deval Patrick proposed hiking the state’s cigarette tax from $2.51 to $3.01 per pack. In Connecticut, the average sales tax for cigarettes is $3.40 per pack.
Massachusetts isn’t the only state seeking to raise the cigarette tax. In California, voters later this year will be asked to approve a measure raising the cigarette tax by $1. In Missouri, which has one of the lowest cigarette taxes in the country, lawmakers are considering raising the rate by 92 cents. In Idaho last month a House committee voted against raising the tax by $1.25.