VT considers raising tobacco tax while NH awaits vote on lowering
With New Hampshire potentially cutting taxes on cigarettes and tobacco products to lure out of state smokers, Vermont is considering going the opposite direction and raising their own.
Advocates of reducing the cigarette tax in New Hampshire say that the proposal in Vermont gives New Hampshire legislators even more reason to reduce the tax in order to draw increased numbers of Vermonters over the 150 mile border between the states. The proposal being considered in the Vermont Senate would hike their tax up to $3.24 per pack compared to the NH State Senate’s proposal to lower theirs to $1.68.
With word of such a hike in Vermont’s tax and a reduction in New Hampshire’s, there would likely be a strong boost in sales seen by nearby New Hampshire retail stores. A recent SNHU study states that that 50 percent of cigarette purchases in the Granite State are made by out-of-state visitors – a percentage likely to climb if Vermont adopts the proposed tax increase.
Reduced cigarette prices in NH would offer similar border-crossing incentives to residents of other neighboring states. To the South, lower prices in NH will draw even more Bay Staters looking to escape the 8th highest cigarette tax in the nation. Over the border to the east, a recent report issued this month by the Maine Heritage Policy Center claims that New Hampshire has created a “retail oasis” and demoted it’s own state to a “retail desert” over taxes.
After passing in the NH House by an overwhelming 236-93 majority, the Senate is due to hold a committee vote on the tobacco tax cut today, with a floor vote likely next week.