2013 tobacco tax keeps on giving


Minnesota’s tobacco tax went up by 10 cents and the sales taxes on cigarettes went up by two cents on Jan. 1, 2016. In 2013, the legislature increased the cigarette tax by $1.60, and set in place an automatic inflator that increases the tobacco tax every year in line with inflation. At $3 (plus $0.54 in sales tax), Minnesota now has the seventh-highest cigarette tax. Each pack also has a $1.01 federal tax per pack.

The tax increase has proven to be extremely effective at reducing smoking, especially among price-sensitive youth. The 2014 Minnesota Youth Tobacco Survey found that past 30-day use of cigarettes among high school students went from 18.1 percent in 2011 to 10.6 percent, the largest drop in the history of the survey. Adult smokers experienced a less drastic decrease, from 16.1 percent in 2010 to 14.4 percent in 2014, according to the Minnesota Adult Tobacco Survey. A majority of adult smokers who quit in this time period cited the increased price as a motivation to quit smoking.

A proposal to remove the automatic inflator was passed through the legislature in 2014 by Rep. Greg Davids (R) District 28B and Sen. Lyle Koenen (DFL) District 17. However, because the legislature did not pass an omnibus tax bill, the automatic inflator was kept in place. With intense pressure by the tobacco and convenience store industries, it is expected the measure will be debated during the 2016 legislative session.


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