Utah Smokers Boost Neighboring State Tax Revenues

Thanks to the 2010 $1-per-pack excise tax increase on cigarettes, many Utah residents are crossing state borders to purchase lower-priced products.

June 25, 2012

SALT LAKE CITY - A 2010 $1 per-pack cigarette excise tax, designed to bring in more state revenue, appears to be backfiring.

State officials reported last week that revenue projections for this fiscal year ?" which ends this week ?" are on target, but lawmakers won??t have much leftover money to actually spend, "nor any big money holes to fill despite forecasts being off in some areas," reports The Salt Lake Tribune.

Analyst Thomas Young told the newspaper that at least $4 million in cigarette tax revenue has been shifted to neighboring Idaho, Nevada, Wyoming and Colorado "from Utahns trying to escape higher taxes."

Utah is ranked 16th among the states with the highest cigarette excise taxes. In 2010, the Legislature increased the state??s cigarette tax by $1 per pack to $1.70. In comparison, the newspaper writes that the cigarette excise tax is 57 cents a pack in Idaho; 60 cents in Wyoming; 80 cents in Nevada; and 84 cents in Colorado. Only Arizona has a higher cigarette tax than Utah, at $2 a pack.

Analysts say that Idaho collected at least $1.5 million from Utah residents last year in cigarette taxes; Nevada collected at least $1.3 million more; Wyoming at least $700,000 more; and Colorado at least $600,000 more.

According to the Utah Tax Commission, Utah??s own cigarette excise tax revenues are off about $775,000 from the previous year.

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