ST. PAUL, Minn. (WCCO) — The Minnesota House opened hearings on a bill Thursday that would more than double the state cigarette tax.
The proposed $1.60 increase is considerably more than the $.94 a pack tax hike proposed by Gov. Mark Dayton.
Minnesota’s cigarette tax is lower than the national average, and it’s also lower than almost all surrounding states.
If cigarette tax hike supporters had their way, the $1.60 tax hike on each pack would be even higher.
They say it is non-smokers who pay the health care costs smokers incur — $3 billion a year in Minnesota.
“There is certainly education, prevention and peer pressure,” said Representative Ann Lenczewski. “But the data shows again and again the thing that potential new smokers are most sensitive to is the price, and part of that price is the tax.”
Minnesota’s $1.23 a pack tax is among the lowest in the Midwest. It’s ahead of North Dakota, but behind Iowa, South Dakota, and Wisconsin.
But if the bill passes, Minnesota could have the highest tax — $2.83 per pack.
Cigars could see an increase, too. A $299 box of cigars would go to $366 dollars. Minnesota tobacco merchants say their sales will go up in smoke.
“I went on the Internet yesterday, and you can buy that same identical box of cigars from famoussmokes.com for $125.99,” said Tom Bryant, executive director of the Minnesota Wholesale Marketers Association. “No excise taxes, no sales tax, and free shipping.”
But anti-smoking groups filled the Capitol hearing room, telling stories of loved ones dead from cancer.
University of Minnesota senior Kaila Narum lost her father at age 39.
“He wasn’t there when I graduated from high school,” she said. “He wasn’t there to intimidate my first boyfriend. And I won’t get a father-daughter dance at my wedding.”
The committee is also considering a tax on little cigars — they look like cigarettes but are taxed at a much lower rate.
All together, the total tobacco tax hikes on the table total $441 million dollars.