California Voters Approve Tobacco Tax Increase

Proposition 56 will raise the state excise tax on tobacco products, including electronic cigarettes.

November 10, 2016

SACRAMENTO, Calif. – For the third time in 10 years, a ballot initiative went before California voters to increase the cigarette excise tax. This time, the measure passed—and by a wide margin (63% to 37%).

Proposition 56 will increase California’s cigarette excise tax by $2 per pack, up from the current 87 cents per pack. Along with cigarettes, the Los Angeles Times reports that other tobacco products (OTP) including smokeless tobacco and cigars will see a corresponding tax increase.

Also included in the ballot measure are taxes on the growing electronic cigarette industry. The news source writes e-cigarettes will be subject to the same tax that smokeless tobacco and similar products currently face in California, and raise that rate in line with the $2 per pack excise tax increase on cigarettes.

E-cigarette liquid containing nicotine could be taxed at a rate as high as 67%, according to state estimates, which could increase the price consumers pay for a typical 30-milliliter bottle to about $30 from roughly $20.

Meanwhile voters in Missouri, Colorado and North Dakota rejected similar ballot measures this week that sought to raise tobacco excise taxes.