A 400 Percent Tobacco Tax Hike Could Hit North Dakota

by Steve Birr

The tax on tobacco products could spike 400 percent in North Dakota if a ballot measure aiming to increase regulations on tobacco and electronic cigarettes passes in November.

The proposal, known as Measure 4, would increase the current tobacco tax from 44 cents to $2.20 and add a new tax on electronic cigarettes sold in the state. Other tobacco products would experience a roughly 50 percent tax increase on sales. Proponents of the tax hike claim it will reduce the smoking rate in North Dakota by 20 percent, reports KFYR.

Critics argue the language in the proposal is extremely vague and does not clearly define where the $70 million raised annually by this tax would actually go.

“Any increase is going to seem like a large increase percentage-wise,” Kristie Wolff, a program manager for the American Lung Association, told KFYR. “What we have to realize is 400 percent is equal to $1.76 tax cents. We need to have a significant increase in order to have an impact.”

Supporters of the measure say that 50 percent of the funds raised will go to a veteran’s trust fund while the other half will go to healthcare programs including behavioral health services and public clinics throughout the state. Critics claim the language in the measure, which allows the governor to appoint oversight boards, will make it difficult to track the tax revenue.

“It’s a blank check for bureaucrats and political insiders to spend new tax money,” Mike Rud, chairman of North Dakotans Against Tax Increase, wrote in a recent op-ed for The Bismarck Tribune. “This measure is a 400 percent cigarette tax increase – the largest such tax increase in North Dakota history – and doubles the tax on other tobacco from 28 percent to 56 percent while adding a brand new e-vapor tax at the same rate.”

California is in the midst of a similar battle with activists who want to hike their tobacco tax from a relatively low rate. Proposition 56 will raise the tobacco tax in California from 87 cents to $2.87 if approved by voters on the November ballot. Proponents of a tax hike argue it’s necessary to dissuade people from smoking cigarettes, but the smoking rate in California is 12 percent, the second lowest rate in the country.

The ballot would also allow the state government to begin taxing e-cigarette sales, which opponents argue harms an industry helping smokers quit.

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