Cigarette Tax Clears House Revenue Committee

The temporary Wyoming State Capitol, The Jonah Building in Cheyenne.

The Wyoming House Revenue Committee moved a measures forward that would increase taxes on cigarettes $.30 per pack today in Cheyenne. If the increase continues to move forward, it will be the state’s first increase in tobacco tax since 2003.

The bill will now go on general file in the House where it will be debated and voted on by the entire State House. If passed through three readings, It would go to the Senate for another committee hearing and three more readings in the Senate before it arrives on the Governor’s desk.

House Revenue Committee Chair, Mike Madden (R-Buffalo) brought the bill, HB 151, to raise the tax on tobacco to $.90 per pack from its current $.60 per pack. He argued that there is little difference between $.60 in 2003 and the $.90 in 2017. His bill covers just cigarettes, but would not impact other tobacco products. According to Madden, the price of a pack of cigarettes the last time there was a rise in the Wyoming cigarette tax in 2002 was $3.25. Today, that same pack costs $6.35 despite any rises in tobacco tax at the state level.

The reason for the proposed tax increase it to help the state pay for costs on state programs such as Medicaid. The program is on the hook for costs which are directly attributable to tobacco usage of those covered by the state in the Wyoming Medicaid program. Madden suggested those costs are around $44 million per year and the current cigarette tax the state receives does not cover those costs. Wyoming Department of Revenue’s Director Dan Noble testified last year the state collected $17 million in cigarette tax.

Rep. Cathy Connolly (D-Laramie) brought her own bill, HB168, which did not pass and would have raised the tax to $1.15 a pack, which was an average of the amount of tax paid by Wyoming’s contiguous tax. Her proposal would have also raised taxes on other tobacco products proportionally. Some of the new cash raised by the increase in tobacco tax would also be directed to school foundation account which pays for education in Wyoming.

“My reason for bringing the bill is we all know there are negative health impacts to smoking and we have never done anything significant about it, including raising taxes,” Connolly said. “The evidence suggests raising taxes impacts consumption… It is the trade off between state income tax or are we going to do other things and there is an appetite to consider sin taxes.”

Among the organizations supporting the increase in taxes was the Wyoming Association of Municipalities, The American Heart Association, and the Wyoming Hospital Association. The American Cancer Society’s Cancer Action Network suggested a higher tax hike, which they said would be in favor at a higher tax rate, which would be more likely to impact behavior.

Among the organizations opposing the bill were the Wyoming Liquor Association, The Wyoming Retailers Association, The Wyoming Convenience Store Association, The Wyoming Petroleum Marketers Association, The Wyoming Taxpayers Association, Wyoming Farm Bureau, and The Wyoming Liberty Group. Among the concerns of the Wyoming Taxpayers was the feeling that the tax is regressive and impacts those from a lower socioeconomic standing more than others.

The Convenience Store Association suggested 22.3 percent of revenue from cigarette taxes are from those who are buying cigarettes in Wyoming and taking them to other states. The concern from retailers, and convenience stores was that a tax increase would impact border towns such as Aladdin, Beulah and other customers come to Wyoming specifically to buy cigarettes.

While the state hasn’t changed it’s $.60 per pack price since 2003, Mike Moser of the Wyoming Liquor Association suggested the government burden – the total taxes on a pack of cigarettes – is roughly $3.14 per pack.