New Hampshire Tobacco Tax Generates $46.7 Million in July

Retailers purchasing tobacco tax stamps ahead of the August 1 excise tax increase fueled the 143% bump in revenue.

August 07, 2013

CONCORD – After a two-year slump, the New Hampshire tobacco tax raked in a close to record amount of revenue in July, the Nassau Telegraph reports. Because the tobacco tax went up this month, many retailers purchased up to seven months’ worth of tobacco tax stamps in July at a cheaper rate. The state tax on cigarettes rose 10 cents per pack on August 1.

Nearly all the $46.7 million in July revenue came from retailers purchasing tax stamps for the future, said Linda Hodgdon, administrative services commissioner. “This is about people buying really, really quickly before the rate goes up,” she said. New Hampshire receives the tax at the retail level via stamps, which are then put on cigarette packs and sold.

This marks a change in how the state handles current inventory when a tax increase happens. It used to be that when a tax hike went into effect, all cigarette inventory in supermarkets and convenience stores would need the new tax stamps. Two years ago, when the state slashed the cigarette tax by a dime, retailers weren’t able to recover the loss for current inventory on the floor.

For the current tax hike, the Legislature allowed the tax to be applied to pack sold after the August 1 increase. “We felt very strongly that we should get the floor tax benefit this time, and we’re glad the Legislature agreed with us,’’ said John Dumais, president of the Retail Grocers of New Hampshire.

That gave retailers an incentive to buy 28.6 million tax stamps in July, nearly triple the usual volume that month. The state predicted that revenue generated by tobacco taxes will level off for a few months because of that.

“It really depends how long it takes these retailers to go through the stamps,” said Hodgdon. If sales get really hot, and what would ordinarily last seven months is gone in five, then we could be looking at healthy growth that could be with us for a little bit.”

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