Ohio Governor Proposes Cigarette Tax Hike

Increase would pay for expected income tax revenue loss.

March 13, 2014

COLUMBUS – Ohio Gov. John Kasich has proposed a tax hike on cigarettes and oil and gas obtained from fracking to compensate for a projected revenue loss from an 8.5% income tax cut, the Cincinnati Enquirer reports.

The cigarette tax would increase from $1.25 a pack to $1.85 over two years.

The proposal aligns with his goal to get the state’s top income tax bracket under 5% to make Ohio more financially attractive.

Senate President Keith Faber said the cigarette tax increase would be a hard sell to Republicans. And the governor has already clashed with lawmakers over his proposal for a fracking tax.

Kasich has called for a 2.75% tax on oil and natural gas obtained from fracking, with 20% of the money allocated to counties that have fracking and 80% to pay for income tax cuts. The American Petroleum Institute of Ohio released a statement calling his proposal “unworkable.”

Under Kasich’s proposal, all tobacco products along with e-cigarettes would be subject to the same tax as cigarettes.

The proposal now heads to the House of Representatives.

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