Minnesota House Okays Tobacco, Alcohol Tax Hikes

The state Senate is scheduled to vote on the reconciled measure next week.

April 26, 2013

ST. PAUL – The tobacco and alcohol taxes in Minnesota might increase if the state Senate approves of a bill passed by the Minnesota House of Representatives, Minnesota Public Radio reports. The House okayed the tax bill by a slim margin this week.

The measure raises $2.6 billion for the state, which lawmakers say is desperately required to balance the budget and funnel money to schools and other services. Part of those funds will come from raising the cigarette tax $1.60 per pack to reach $2.83 per pack, although Gov. Mark Dayton’s budget only calls for a 94 cent per pack hike.

State Rep. Tina Liebling is in favor of an increase in the tobacco tax. “This is a provision that will literally save lives,” she said. “There are very few of us on the House floor who haven't had a relative touched by the problems of cigarette smoking or other tobacco consumption can cause.”

But state Rep. Deb Kiel said the alcohol and cigarette tax hikes would drive away business to neighboring North Dakota. “I might as well put a sign up in my district that says ‘Don't bother coming here; just go over to North Dakota,’” she said. “Because that's what we're doing. We're sending our business, we're sending our people to places that do not tax this way.”

The House alcohol tax would tack on 7 cents to a glass of beer or liquor shot, and 47 cents to a bottle of wine. The Senate version does not have an alcohol tax increase. The Senate will vote on a reconciled bill next week. 

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