BOSTON -- The Massachusetts House passed the state’s largest tax increase since 2002 late Thursday night, the State House News Service reports. The package includes a $1 hike to the state’s cigarette tax, raising the per-pack tax from $1.51 to $2.51.

Despite opposition from the 19 House Republicans and a handful of fiscally conservative Democrats, House Speaker Salvatore DiMasi’s plan passed. In a statement, DiMasi said the plan was “thoughtful, reasonable” and will “help balance our budget for next year by increasing revenues to the Commonwealth and reducing the tax burden on thousands of businesses that drive our economy.”

Many small businesses should benefit from a reduction from the excise rate, while larger businesses, along with smokers, will bear the burden of the increase.

The hotly debated cigarette tax increase had lawmakers from the northern districts expressing concerns that a higher rate would send customers over the border, taking with them purchases on alcohol, lottery tickets and other convenience store products.

Rep. Colleen Garry proposed an amendment striking the cigarette tax portion of the bill, explaining that raising the rate to $2.51 per pack would give Massachusetts the nation’s second-highest cigarette tax.

(Editor's note: NACS Daily reported incorrectly yesterday that state legislators backed off the cigarette excise tax proposal.)