State Tobacco Tax Leads To Fewer Cigarettes Sold

Tuesday, November 6th 2007, 9:57 am
By: News On 6

OKLAHOMA CITY (AP) _ Increasing Oklahoma's tobacco tax has led to a decline in cigarette consumption in the state, according to a state Department of Health official. A year before new tobacco tax rates went into effect in 2005, 356.7 million packs of cigarettes were sold. During the fiscal year that ended June 30, 307.2 million packs were sold in the state, a decline of about 50 million packs a year.

Doug Matheny, chief of the Tobacco Use Prevention Service at the Health Department, attributed the decrease to increases in the tobacco tax approved by voters in November 2004.

The proposal put in place several tax stamps for the more than 5,000 tobacco retailers in the state.

The most common tax rates include a $1.03 stamp for nontribal stores, an 86-cent stamp for tribal stores with compacts with the state and a 6-cent stamp rate for border stores that compete with surrounding states with lower taxes.

The increase has been effective in decreasing smoking while also bringing in more money for the state to pay for health programs funded by tobacco tax collections, Matheny said.

The state has seen a 13% decrease in the number of cigarette tax stamps sold, while financial collections from those stamps have increased 242% since fiscal year 2004.

The statistics were given Monday to state lawmakers during a meeting of the Cigarette and Tobacco Tax Advisory Committee. Committee members also were briefed on an ongoing House interim study looking at the tobacco tax structure to see whether the law needs to be changed.

Rep. Mike Jackson and Sen. Patrick Anderson, both Republicans from Enid, said their legislation, Senate Bill 1014, adjusts the tobacco tax section of law. It will be brought up again during the upcoming legislative session, which begins in February.

The bill would increase the fee for a wholesaler license and would forbid retailer-to-retailer sales unless moving inventory between stores within the same company.

The authors of the legislation hope to crack down on sales of cigarettes fixed illegally with a 6-cent tax stamp, which has been a problem in the northeastern part of the state.