Gas, sales and cigarette taxes are higher

August 15, 2010

If you drive a car, have a nicotine habit or buy things, you're probably paying more this year.

The tax services company CCH conducts an annual survey of state consumption taxes and the 2010 data indicates that many cash-strapped states are hiking sales, gas and cigarette taxes.

"From the
increases in consumer taxes, it's evident that many states are trying to
shore up revenue shortfalls," said Daniel
Schibley, CCH senior state tax analyst. "Many other states have not yet increased taxes, but may
do so."

CCH found that as of July 1, five states increased their gas taxes, five hiked state sales taxes and 11 bumped up their taxes on cigarettes.

The District of Columbia also increased its
taxes across all three consumer tax categories, joining North Carolina,
which is the only state to also hike taxes in all three areas.

Just one state, Florida, reported a tax reduction. But don't get too excited Sunshine State residents. The state's gas tax went from
16.1 cents to 16 cents per gallon. While every tax penny, or portion thereof, saved helps, this fractional cut of gas taxes won't get you much farther down I-95.

And as the CCH map below (click the image or here for a larger view) shows, the rates in each consumer tax category vary widely across the country.

State Gasoline, Sales and Cigarette Tax Rates

Consumer-tax-rates-2010-cch (2)

The three figures for each state are, left to right, (1) the basic state
gasoline tax rate per gallon, exclusive of sales tax, various environmental taxes and fees,
local taxes, and license and inspection fees;
(2) the state sales tax rate ("0%" indicates that state-level sales tax
is not levied), including a 1 percent statewide local rate in California
and Virginia; and (3) the state cigarette tax rate per pack of 20.
Local taxes may apply in certain jurisdictions, but are not reflected.
Any rate changes effective July 1, 2010, but not announced by press time
are not reflected.

Gas prices down, but gas taxes up: The price at the pump has headed
downward in the past few months, but gas taxes have gone up in five states: California, Kentucky, Minnesota, Nebraska and
North Dakota, as well as the District of Columbia.

In some states, the rate hike was negligible, as in Minnesota where the levy went from 27.1 cents to
27.5 cents per gallon.

Golden State drivers, however, weren't so lucky. California's gas tax over the past year has nearly doubled, going from 18 cents to 35.3 cents per gallon.

Sales taxes at all levels rise: Sales
taxes are major revenue sources for the states that have them, and are
often an important funding source for cities and counties, as well.

Over the past year, CCH found five states
increased their sales tax rate: Arizona, Kansas, Massachusetts, New
Mexico and North Carolina. Washington, D.C., also hiked its
sales tax.

Sales tax increases over the past year ranged from incremental in states like New
Mexico, which went from 5 percent to 5.125 percent, to Massachusetts' "what the…" jump from 5 percent to 6.25 percent. No wonder Bay Staters pushed for a tax holiday!

In all, 26
states and the District of Columbia now impose a sales tax of 6 percent
or more.

And remember, in many places the state levy is just part of the purchase price. Counties, cities and other local jurisdictions add their own sales taxes on top of the state sales tax.

For example, Colorado's statewide 2.9 percent sales tax rate becomes 8.4 percent in Steamboat Springs and 8.9 percent in Winter Park. In Kansas City, sales taxes can go as high as 9.925 percent in the city's special taxing districts.

But the nation's top big-city sales tax (dis)honors are shared by Chicago and Los Angeles, which each impose a 9.75 percent
combined rate on shoppers.

Young woman smoking

Cigarette taxes continue to climb: Like the smoke from a nicotine stick, cigarette taxes wafted upward over the last year.

CCH found that 10 states added to their cigarette taxes: Connecticut, Delaware, Hawaii, New Mexico, New York, North Carolina, Pennsylvania, South Carolina, Washington and Wisconsin. The District of Columbia also
increased its tax.

One of the biggest percentage increases came from traditional tobacco country. South Carolina's cigarette taxes went from 7 cents per pack, the lowest in the nation, to 57 cents.

But the highest state cigarette tax is in New York, where the tax is
now $4.35 per pack, up from $2.75 last year.

Four other states raised everyone's favorite sin tax to $3 or more per pack over the past year: Connecticut, Hawaii, Rhode Island and Washington.

And as with sales taxes, notes CCH, statewide rates might not be the end of the story. An increasing number of cities and
counties, as well as the federal government, impose additional taxes on
tobacco products.

That's the case in New York City. While the higher state cigarette tax means the average price of a pack now is $9.20, the Big Apple's separate cigarette tax pushes the price of a pack bought within the city to around $11.

Related posts:

Want to tell your friends about this
blog post? Click the Tweet
This
or Digg This buttons below or use the
Share
This
icon to spread the word via e-mail, Facebook and
other popular applications. Thanks!

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
The latest Dirty Dozen tax scam list is familiar because too many are still falling for the schemes

March 5, 2026

Tax filing season is also peak time for tax scams. Be on the lookout for…

Read More
Hello Tax Season 2026

Happy New Tax Year! Are you ready to file your 2025 tax return? I know, too early to ask. But Tax Day 2026 will be here before we realize it. The Internal Revenue Service deadline to file and pay any tax we owe is the regular April 15 date this year. It’s also Tax Day for most of the states that collect income taxes from their residents, which is most of the states! If that seems too far away right now, don’t worry. As is the case every tax season, the ol’ blog’s tips and other tax reminders should help all of us meet our state and federal responsibilities. Procrastinators also will want to keep an eye on the countdown clock just below. It tracks how much time we have until April’s Tax Day, just in case we put off our annual tax task until the absolutely final hours and decide we need to instead get an extension request into the IRS by that date. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Cigarette taxes a re a funny thing.. Are they aimed at making smokers quit or at increasing tax revenue… I mean if less smokers smoke then less smokers buy cigarettes so less tax revenue. Silly? Anyway I use an e-cig now… Much better and affordable. The one brand I like has more info on e-cigs in general on their website http://thevapormaster.com

Leave your comment