On Monday night, June 21, 2010, the New York Legislature narrowly agreed to increase the state’s tax on cigarettes. The tax is now set to grow by an additional $1.60-to a national-high $4.35 a pack, the New York Daily News reported.
When adding in city and federal taxes, the tax charged on one pack of cigarettes will be $6.85-making a single pack of smokes ring up for $12 – $13 a pack at retailer counters in the state. The new tobacco levy also will drive up the tax charged on cigars and chewing tobacco to 75% of its wholesale price-a 29% jump.
The tax hike was part of an emergency spending plan to keep New York government running.
“We are going to collect revenue and ensure that young people don’t have access to cheap smokes,” said Senate Deputy Majority Leader Jeff Klein (D-Bronx).
Officials expect the new tobacco taxes will raise an estimated $290 million to help plug the state’s $9.2 billion deficit, according to Paterson’s budget office.
The emergency bills also include $150 million from the collection of taxes on cigarettes sold on Indian reservations, setting up a likely court battle with the Indian tribes.
Republicans blamed Democrats for the increase, calling them tax-happy.
“This is just a prelude of what you are going to see in the big ugly,” said Deputy Minority Leader Thomas Libous (R-Binghamton.) “You are going to see spending and taxes, everything that you shouldn’t do in this economy.”
The New York tax is far ahead of the $3.46 charged by Rhode Island, which is the state with the second highest tax on cigarettes.
Health officials praised the tax saying it will make it too costly for many people to smoke.
By including the new taxes in his emergency bills, Paterson effectively dared the Legislature to approve them, or shut down the government, the New York Daily News noted.