Cig taxes: Impact was as advertised

Mississippi has collected $36.8 million from the 50-cent cigarette tax increase that went into effect in May, according to data from the State Tax Commission. The state collected $4.7 million less than expected from raising taxes on stamped cigarettes waiting to be sold when the tax hike took effect.

But tax collections on cigarette stamps in July, the first month of the current fiscal year, totaled $9.2 million, which is fairly close to expectations. The tax hike from 18 to 68 cents per pack is expected to generate nearly $113 million this fiscal year.

Those results are bringing smiles from two groups – state legislators who need new revenues to balance the state budget in a tight economy and health-care advocates hoping that higher prices will prompt smokers to quit.

Smokers appear to be cutting back, at least for now. Health care advocates are hoping to eventually reap long-term results from the state’s first tobacco tax increase since 1985.

Clarion-Ledger
8/19/9