Massachusetts Proposes 210% Tax on Flavored Tobacco

Measure to be included in yearly budget proposal would more than triple current tax.

July 02, 2015

BOSTON – The Massachusetts Senate is pressing to increase the tax on flavored cigars, flavored smoking tobacco and flavored “blunt wraps” from 40% to 210% in an attempt to reduce use of the products by young adults. Unflavored and tobacco-flavored cigars would remain taxed at 40%.

If the tax hike becomes law, Massachusetts would have the highest flavored-cigar tax in the country. The tax would be imposed directly on cigar distributors. So, for instance, a retailer buying a $1 flavored cigar would pay a $2.10 tax, significantly but opaquely raising the price for consumers.

The lead sponsor of the effort said boosting the tax would help reduce youth smoking by making the price prohibitive for them. Democratic Senator Jason M. Lewis told news sources he views it as “just closing a tax loophole” since smokeless tobacco, a category that includes chewing tobacco, is already taxed at 210%, and cigarettes are highly taxed as well.

State convenience store associations have opposed the increase, citing the high compliance rate of convenience retailers when it comes to restricting sales to minors, and arguing that the tax would hurt many mom-and-pop stores. Steve Ryan, executive director of the New England Convenience Store Association expressed other concerns to the Boston Globe: “The concern that we have is that the sales that now occur in the legal channels will go to the Internet, to stores out of state, or to the black market.”

The measure was included in the state Senate’s yearly budget proposal, but not the one from the House. The two chambers are still hashing out differences between their respective spending plans.

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