Smokers in NYC May Have To Pay $11 Per Pack

NEW YORK (CNNMoney.com) -- New York City smokers already pay the highest cigarette taxes in the nation, but a new state law will push those taxes even higher this summer.

The state legislature on Monday approved a bill adding an additional state tax of $1.60 to every pack sold, effective July 1. This bill, which was signed by Gov. David Paterson on Monday, will raise the state tax to $4.35 per pack. That makes the Empire State's tax on smokes the highest in the nation.

New York City smokers pay an additional municipal tax of $1.50 per pack, for a current total tax of $4.25 per pack. That's the highest state-local tax whammy in the country, according to the Campaign for Tobacco-Free Kids. Chicago is the runner-up, at $3.66 per pack.

This new tax increase means that smokers in the city will pay $5.85 per pack in taxes. This drives the average local price up to nearly $11 per pack, according to some estimates.

The tax hike is aimed at generating an additional $440 million in 2010-2011 tax revenue to support healthcare programs.

The bill also requires that cigarettes sold at Native American reservations be taxed. State Sen. Jeffrey Klein, a Democrat representing parts of the Bronx and Westchester County, said that taxes on reservation-sold cigarettes will provide the state with $150 million in revenue during the remainder of 2010, followed by $500 million in annual revenue thereafter.

This will be a financial hit to tribes like the Shinnecock Indian Nation in Southampton, where several stores sell tax-free cigarettes.

"We've had very preliminary talks with not only Gov. Paterson but the Spitzer administration, so we knew this was coming and we're following it closely," said Randy King, chairman of board of trustees for the Shinnecock Indian Nation, which was recently recognized by the federal government. "We're just going to take the information back to the tribe and see what direction we get on how to approach it."

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  • by Audra Location: SoCal on Jun 24, 2010 at 09:04 PM
    I think the horrendous tax hikes have been exclusively on assembled cigarettes - I THINK. That would make it true, if that's the case. I have known a number of people that went to rolling their own because it saved them money. I don't know for sure if it's just because components without the labor is less or if tax is part of the difference.
  • by Jeff on Jun 24, 2010 at 08:50 PM
    I can see not smoking around kids (under 18). That is something that gets to me everytime i see it, but cali passing a law (which would eventually spread here) to not smoke in your home, car? that's overkill and how would they even enforce that? are they going to have cops going door to door knocking to see if your home stinks like smoke? things are getting rediculous!!
  • by Obama Snake Oil Co Location: Washington on Jun 24, 2010 at 12:35 PM
    Audra, it just goes to show you that if they can tax up to 200% of an item sold, they can do it to anything. I am waiting on the Kayak tax...you know a lot of people drown on Kayaks every year. So, by registering Kayaks, they can make tax money. And next will be the fat tax on fast foods...that one is real! Of course the state wouldn't be singling out the poorer class people with higher taxes would they? Hmmm, smokes, alcohol....fast food....seems to be a trend here. I have heard that people that roll their own smokes, do not pay the same price for taxes. Any of you smokers know that to be true?
  • by The Pirate Lady Location: Grimesland on Jun 24, 2010 at 10:13 AM
    I doubt this tax will discourage your die hard smokers. As with anything, if you want it bad enough, you'll find a way to get it.
  • by Audra Location: SoCal on Jun 24, 2010 at 07:04 AM
    I didn't notice any of the time I've spent there... it isn't standard for them to be locked up/inaccessible? It has been here for as long as I can remember, so that would surprise me. That's to keep minors from handling them. The funny thing of that is, you can smoke at 18 but can't drink till 21... but unless it's high-end expensive, the alcohol is right where you can grab it. I guess they're also concerned about minors lifting cigs since they're small enough to hide easily.
  • by Time To Change Brands on Jun 24, 2010 at 04:46 AM
    I guess I'll start smoking that "Wacky Tobacky"...it will be nearly as cheap if cigarettes go over $10 per pack. Soon we'll hear about tobacco field robberies. (armed guards on tobacco farms?) Stores will need to put cigarettes under lock & key. (some already do)
  • by Audra Location: SoCal on Jun 24, 2010 at 12:16 AM
    Those that are commenting that people will buy cigs elsewhere sound like they think it's just going to stop there. You really think it will stay localized and not affect anyone else ever? There is already an area in Southern CA where they are trying to make it illegal to smoke in your own home, and they'll push for cars too. Again, I don't smoke but I disagree with such a law. The one about not smoking if you have anyone under 18 in the car I can hang with... nobody should force their toddler to breathe it. That's different though. In your own car, as an adult, or in your own home... nobody's business but your own and whomever you live with. If no one is getting the ramifications of this, they need to learn the story about the camel and the tent.
  • by Sam Location: Kitty Hawk on Jun 23, 2010 at 01:20 PM
    Since that's the case, it looks like New Jersey will receive lots more revenue coming up in the future.
  • by mensaiq156 Location: Arizona on Jun 23, 2010 at 01:19 PM
    Several years ago we suffered a severe drout and the local politicians decided to "encourage" us to limit our water use by placing a punitive tax on water use of over a certain amount. This resulted in a dramatic decline in the use of water which resulted in a dramatic decline in the income derived from selling public water which resulted in a budget loss for the year of millions of dollars. The politicians therefore had to increase taxes in other areas to make up for the loss of income from water sales. There are unintended consequences resulting from some actions and the State of New York may find that the tax on cigarettes will result in a substational reduction in cigarette use and a substantial decline in income from taxes on cigarettes. If the goal is to reduce smokeing, this is good. If the goal is to raise money for government expenditures, it may not be so good. Only politicians can come up with a tax that is self defeating.
  • by Jim Location: SC on Jun 23, 2010 at 01:08 PM
    I hadn't thought of that! It's going to be interesting to see how this plays out on the Indian Reservations. I can see this becoming a real peeing contest between the Native Americans and the socialists.
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