June 22, 2010 - An increase in tobacco taxes and a plan to collect taxes from cigarettes sold on American Indian reservations was approved Monday, June 21st by New York State lawmakers as Albany slowly pieces together a budget that is now more than two months late. For the cigarette-tax proposal, the Assembly approved the measure 77-64. The Senate approved the measure 32-29, with all Republicans voting no and with one absentee, Sen. Thomas Morahan, R-New City, who is battling leukemia.
Directly related news brief:The tax increases and collection plan was approved as leaders grapple with passing a spending plan for the 2010-11 fiscal year that was due on April 1 and close a $9.2 billion deficit.
June 20, 2010 - Cigarette taxes in New York would jump by $1.60 [$2.75+1.60=$4.35] a pack under a tentative deal reached between Gov. David A. Paterson and legislative leaders, which would give New York the nation’s highest state cigarette taxes. (New York - tax increase on tobacco must pass or else state faces extreme budget crisis..)
The plan includes a $1.60 per-pack-increase on cigarettes, raising the state tax to $4.35 — the highest in the country — and bringing the retail cost of a pack of cigarettes in most places to well more than $10. The average price in New York City, which imposes its own cigarette taxes, will be even higher, nearly $11 a pack.
Those who prefer other tobacco products will also be forced to pay significantly more. The tax on smokeless tobacco will more than double, to $2 an ounce from 96 cents an ounce, starting on Aug. 1. And the wholesale tax on cigars, dips and other kinds of tobacco will rise to 75 percent from 46 percent. The increases take effect July 1, 2010. Combined, the plan is expected to add $440 million to the state's coffers.
The cigarette-tax plan would also allow the state to begin collecting taxes from the sale of cigarettes on American Indian reservations to non-tribal citizens, a revenue source that is expected to bring about $150 million. Cigarettes sold to tribe members would not be taxed.
Collecting taxes from cigarettes sold on reservations has been a long-sought source of revenue for the state and is opposed by the state's American Indian tribes. Enforcement would begin September 1, 2010. (New York State - state democrats insist governor tax cigarettes sold on Indian reservations..; NY State Governor Patterson - part of budget - collect Indian cigarette taxes..; NYC - wins round in fight against Indian Tobacco Vendors..)
References: State raises cigarette tax, OKs plan to collect from American Indian reservations by Nick Reisman, Albany Bureau LoHud.com, 6/22/2010; A New York smoke pack is pushing $11 now, Posted by Maggie Haberman, Politico.com, 6/21/2010.