New York Gov. George Pataki sent his 2006-2007 budget proposal, including his plan to boost the state’s current cigarette excise tax of $1.50 per pack to $2.50 per pack to the state legislature. If passed, this would make New York’s excise tax for cigarettes the highest in the United States. (Rhode Island currently has the highest tax at $2.46 per pack.) The Governor’s budget includes a total of $662 million in new fees and taxes, of which nearly half would be supported by the revenue collected from the $1-per-pack cigarette tax increase.

According to the New York Association of Convenience Stores, the majority of the state Senate recognizes the industry’s opposition to a cigarette excise tax increase because it would “do far more harm than good.”

“The record clearly illustrates that increasing New York’s cigarette excise tax is self-defeating fiscally, devastating to small business and detrimental to public health,” says NYACS President James Calvin. “Smokers don’t quit smoking, they just quit coming to our stores and instead shift their purchases to tribal outlets, the Internet or bootleggers to avoid the exorbitant tax-included price.”

Calvin stated that the cigarette tax revenue projections in Pataki’s budget plan should focus exclusively on “full, fair and on-time implementation of Section 471e of the Tax Law,” which requires the collection of state taxes on Indian tobacco sales, motor fuel and other products to non-Indian New York residents effective March 1, 2006.
NACS Online, January 25, 2006