- Associated Press - Tuesday, February 3, 2015

BISMARCK, N.D. (AP) - A bipartisan group of North Dakota lawmakers and interest groups seeking to discourage tobacco use are supporting a measure that would raise the state’s tobacco tax for the first time since 1993.

Rep. Jon Nelson, R-Rugby, is pushing the bill that would raise the state’s cigarette tax from 44 cents to $1.54 a pack, equal to the national average. Tax on a can of snuff would jump from 60 cents to $2.72.

Tax analysts estimate the measure could swell North Dakota’s treasury by more than $138 million during the next two years; the money would be divided among the state, counties and cities to pay for health-related programs.

But Nelson told the House Finance and Taxation Committee on Tuesday that the legislation’s aim is not raising revenue, but encouraging North Dakota residents to quit using tobacco and deterring young people from taking up the habit.

“This will save North Dakota citizens’ lives,” he said.

Officials from the American Heart Association, the American Cancer Society and the American Lung Association also spoke in favor of the legislation.

Dr. Eric Johnson, a consultant for some anti-tobacco groups in North Dakota, said about 20 percent of North Dakotans smoke, down from about 41 percent in 1965. He called raising tobacco taxes “an efficient way to prevent smoking.”

The committee took no action on the measure. The full House will debate it later.

North Dakota ranks 46th among states in the amount of tax smokers pay. New York charges the most state excise tax in the nation at $4.35.

A $1.54-per-pack tax would put North Dakota more in line with neighboring states. Minnesota’s tax is $2.90 a pack, while the tax is $1.53 in South Dakota and $1.70 in Montana.

Retailers have successfully fought off several attempts to raise the state’s tobacco tax in the past two decades, arguing that it punishes retailers and unfairly targets low-income North Dakotans.

Mike Rud, president of the North Dakota Petroleum Marketers Association, called the proposed increase “an onerous user tax on a legal product.”

“Retailers don’t stand in the driveway or on the storeroom floor attempting to sell tobacco products,” he said. “We simply attempt to meet customer demand.”

Greater North Dakota Chamber of Commerce spokesman Jon Godfread said the Legislature’s focus should be on “tax decreases, not increases.”

“If the goal is social engineering, the tax code is a terrible place to do it,” Godfread said.

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