Cigarette tax expected to increase by $1 in New York
New York's governor wants to raise the cigarette tax and expand a ban on flavored tobacco products, which could lead to more illegal sales and less revenue for New York.
Even now, New York has a high rate of cigarette smuggling: more than half of the state's residents who smoke are purchased at illegal outlets or smuggled. The governor's proposed $1 per pack tax increase and flavor ban could lead to record levels of smuggling. Cigarette revenues are projected to fall by $225 million a year, and even raising the cigarette tax by $1 per pack would not close the budget hole.
In addition, a ban could increase the costs for law enforcement agencies to combat increased criminal activity.
For example, the Massachusetts flavor ban resulted in a $116 million decline in tax revenue and a 6.6% increase in smuggling.
Author Elina Linderman
