Increased Minnesota Tobacco Tax is North Dakota’s Gain

Meanwhile, whether the increased Minnesota tax has reduced smoking is still being studied.

October 22, 2013

GRAND FORKS, ND – Since Minnesota raised taxes on tobacco products several months ago, sales at North Dakota retailers have jumped. Meanwhile, whether the tax hike has reduced the number of smokers in Minnesota — one of its intended effects — is still being studied, the Grand Forks Herald reports,

According to data from the North Dakota Tax Commissioner’s Office, the number of cigarettes purchased by North Dakota tobacco retailers in August and September increased 12% and 5.5%, respectively, versus the same period last year.  

“It likely has to do with Minnesota’s tax increase,” said John Quinlan, a compliance officer in the North Dakota Tax Commissioner’s Office.

Earlier this year, the Minnesota Legislature raised the state’s tax on a pack of cigarettes by $1.60, which took effect in July. The state’s tax is now $2.83, compared to North Dakota’s 44 cents per pack. North Dakota hasn’t raised its rate since 1993.

Meanwhile, Minnesota tax collections increased in July and August by $12 million and $24 million, respectively, compared to the same months in 2012.

Several convenience store employees in northwest Minnesota have said they’ve noticed significantly fewer people purchasing cigarettes.

“They’re going across the river,” said John Yuric, manager of the Valley Oil gas station in Warren, Minnesota. He said that lower cigarette traffic also means fewer people are stopping in and buying other items.

Minnesota’s tax hike was promoted as a way to reduce smoking rates in Minnesota while discouraging smoking among young people. Those effects are still being studied.

Mike Sheldon, senior communications manager for ClearWay Minnesota, said it has received a 200%-250% increase in the number of inquiries about its QuitPlan services — but that it’s too early to know whether more people are actually kicking the habit.

“It’ll be a little while until we can quantify successful quits since the tax increase,” Sheldon said. 

Advertisement
Advertisement
Advertisement