Did the tobacco tax in NH go up today or didn’t it?

By Jim on October 2nd, 2008

The Concord Monitor says it did or was supposed to:

Smokers will have to dig a bit deeper to pay for their cigarettes. Starting today, New Hampshire’s cigarette tax is rising 25 cents, bringing the per-pack tax to $1.33.

The increase was written into law earlier this year on the condition that it take effect if the cigarette tax raised less than $50 million between July 1 and yesterday. Cigarette tax revenue for that period was about $47.6 million said Peter Boisvert, director of the Collections Division for the state Department of Revenue Administration.

“Everything we’ve seen tells us that we’re not going to reach the 50 million mark,” Boisvert said yesterday afternoon.

Even with the increase, New Hampshire’s cigarette tax is lower than that of surrounding states. Massachusetts charges $2.51 in taxes per pack, while Maine and Vermont tax cigarettes at $2 per pack.

But the Union Leader says it hasn’t yet:

State tax officials told retailers today not to collect any increase in the tobacco tax yet.

If the state finds it collected $50 million or more in tobacco taxes over the last three months, the current tax of $1.08 will remain in effect. If it collected less than $50 million, the tax will increase by 25 cents a pack. The Department of Revenue Administration has until Oct. 15 to finish an audit of the tax under a unique tax increase measure the Legislature passed in June.

Gov. John Lynch proposed the tax increase to raise $23 million to cover expected budget shortfalls. Retailers convinced lawmakers to hold off on the increase to show that a $1 a pack increase in Massachusetts would drive more customers to New Hampshire and eliminate the need for a tax hike. Massachusetts’ cigarette tax is $2.51 a pack, plus sales tax.

I know that tobacco taxes are considered low hanging fruit for the tax and spenders in Concord but do they really think that they will increase revenue by increasing this tax? As some of the comments indicate, some people will begin to buy their tobacco on the black market. This is not new, this is simply what happens when you raise the price of a commodity too high.

Don’t get me wrong either, I would rather that people quit as it’s a terrible addiction. It’s best to get off the cigarettes and have a higher quality of life than it is to stay addicted to them. That said, I don’t care for forcing people to do it through nanny state tobacco taxes either.