Minnesota’s automatic excise tax increase on cigarettes would end under legislation being considered at the state Capitol.
The measure, sponsored by Rep. Greg Davids, R-Preston, repeals the 2013 law that makes annual adjustments to the state excise tax on cigarettes, based on changes in the average retail price. It also locks in the current rate of $3.04 cents per pack.
During a House tax committee hearing Wednesday, Minnesota Retailers Association lobbyist Brian Carr spoke in support of the bill. Carr told lawmakers that tobacco sales have fallen sharply in border communities.
“Minnesota is losing approximately $38 million per year in tax revenue due to lost sales on tobacco products, and now over 35 percent of all tobacco products consumed in Minnesota are brought in from other states.”
Opponents of the bill argue that lower cigarette sales help keep the state healthier.
“We spend of a lot of money in this state on health care related to smoking,” said Rep. Jennifer Schultz, DFL-Duluth. “If we reduce this amount, our state is going to be in trouble because we won’t be able to pay for the negative health effects.”
Lawmakers approved the same repeal last session as part of the omnibus tax bill that DFL Gov. Mark Dayton later vetoed.