State tax revenue going up in no smoke

February 18, 2007

Cigarette_smoke_2
In 2005, states counted $13 billion added to their treasuries thanks to tobacco taxes. Sure, that’s a hefty amount. But cigarette tax collections that year were actually down in 15 states compared with the year or years before, according to a study backed by the tobacco industry.

This year, according to an Associated Press story, New York, Massachusetts and Illinois are all forecasting a drop in cigarette tax revenue. I wouldn’t be surprised to see that trend here in Texas, too.

The reason for the decrease? Higher cigarette taxes. In the Lone Star State, the per-pack levy went up a full dollar on Jan. 1.

But rather than bringing in more money because the tax is higher, it seems that the taxes are finally prompting some smokers to kick the nicotine habit. More nonsmokers means less cigarette tax money.

That naturally upsets state money counters, but the tax loss could be offset by lower state costs to treat smoking-related illnesses. Only time will tell how those tax scales will balance.

Uniformed smokers: Tobacco and the military have a long history.

Cigarettes used to be standard in military ration packets. Some U.S. Army camps in France during WWII were named for cigarette brands.

And now a University of California, San Francisco study finds that relatively cheap smokes are still available as long as you have access to a military commissary. Prices at military stores, notes the study, are lower than the cigarettes sold at local retailers thanks to the tobacco products’ tax-free status at on-base outlets.

Smokin’ motors: This afternoon down in Florida, the 2007 season kicks off for a sport whose history is inextricably tied to tobacco.

Sure NASCAR’s roots are in another product that’s a popular sin tax target, alcohol. But the sport has come a long way from the days when moonshiners ran full bore away from government revenuers AKA alcohol tax collectors.

As stock car racing became more formalized, Winston stepped in as the marquee sponsor for decades. But health concerns and changing public attitudes led to the elimination of tobacco brands on the cars.

However, the sin-tax area is still well represented in NASCAR, with liquor ads joining beer names on several autos.

And while the name doesn’t have anything to do with cigarettes, one of  NASCAR’s biggest stars is known by fans and fellow drivers as Smoke. Love him or hate him, you’d best watch out for his #20 car this afternoon.

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
6 tax moves to consider this June

June 3, 2026

Definitely take a break this June. But taxes don’t take vacations. So, you also should…

Read More
Tax Season 2026 Continues!

We made it. Tax Day 2025 is finally over. For most of us. When the filing season started on Jan. 26, millions who were expecting refunds filed immediately. Most of us got our returns to the Internal Revenue Service by April 15. But plenty of taxpayers also got extensions. They are looking at an Oct. 15 filing deadline.

Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments