- The Washington Times - Monday, May 21, 2012

ANNAPOLIS — Maryland health advocates are celebrating an upcoming tax increase on cigars and smokeless tobacco, but they aren’t stopping there.

Gov. Martin O’Malley, a Democrat, is expected to sign a bill Tuesday that will raise the state’s tax on non-cigarette tobacco products for the first time since 1999, in an effort to combat what state health officials say is increased use of the products among teens.

The measure is part of $260 million in tax increases that were approved during last week’s special session and will be signed into law Tuesday. About $247 million of the increases will come from an income-tax hike on the top 14 percent of earners in the state.

Efforts to raise the tax on cigars and smokeless tobacco were spearheaded by health lobbyist Vincent DeMarco, who said his next goal is to increase the state’s $2-a-pack cigarette tax to $3 and that he hopes to get it done as soon as next year.

“We are going to save thousands of young people from addiction to these products,” said Mr. DeMarco, president of the Maryland Citizens’ Health Initiative. “We are thrilled. This will be a great public health victory for the people of Maryland.”

The bill will raise the current 15 percent tax on most cigars and smokeless tobacco products, known collectively as other tobacco products (OTP).

Starting July 1, smokeless products like chewing tobacco and snuff will be subject to a 30 percent tax.

The tax on small cigars - also known as cigarillos - will rise to 70 percent. Health advocates say cigarillos have become a popular choice among teens as a result of their low cost compared with cigarettes and because of their exotic flavors, such as cherry and vanilla.

The bill will not raise the tax on premium cigars - cigars that are hand-rolled using whole tobacco leaves - which will remain at 15 percent.

The increases are expected to generate $5 million a year.

While the OTP tax has not been changed since 1999, the cigarette tax has gone from 36 cents to $2 a pack over that span - including a doubling from $1 to $2 in 2007. State officials say cigarette use in Maryland has decreased by more than 30 percent in the past decade.

Mr. DeMarco said he wants the General Assembly to raise the tax to $3 a pack in coming years to further stamp out smoking, which he says will improve statewide health and lower medical costs.

Some Democrats have said it is too soon to raise the tax once again, and many Republicans have blasted the proposal as an attack on residents who choose to smoke and businesses that rely on the revenue.

Delegate Neil C. Parrott, Washington Republican, said he has heard many complaints from business owners in his Western Maryland district, who say tax increases lead many customers to buy their products in neighboring Virginia, Pennsylvania or West Virginia.

“It’s going to hurt their bottom line to a great extent,” he said. “I think what it really amounts to is that [state leaders] want to tax everything as much as they can.”

Story Continues →