BISMARCK – House lawmakers on Friday rejected a tobacco tax hike and approved a bill that bans the sale of e-cigarettes to minors while also defining them as a non-tobacco product, which one Democrat criticized as a “stealth” way to prevent them from being taxed in the future.
Representatives voted 34-56 to defeat House Bill 1421, which would have increased the excise tax on a pack of cigarettes from 44 cents to $1.54, with comparable increases on snuff and chewing tobacco.
Health and medical organizations backed the increase, while business groups and border retailers fought it.
Rep. Vicki Steiner, R-Dickinson, a member of the House Finance and Taxation Committee that gave the bill a 12-2 do-not-pass recommendation, said tobacco is a legal product and raising the tax by 285 percent would hurt smokers unable to quit, including low-income residents.
“Why would we increase a tax on our people simply because they have an addiction?” she said. “Let’s light up the board with red votes.”
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Rep. Jon Nelson, R-Rugby, lead sponsor of the bipartisan bill, said it’s “undeniable” that higher tobacco taxes reduce smoking rates, especially among youths – a claim challenged by bill opponents – and that the bill puts responsibility on smokers who drive up health care costs.
He and other supporters highlighted that the 44-cent tax hasn’t been raised since 1993 and is the 46th lowest in the nation. The $1.10 increase would have put the tax on par with the national average but still below the regional average. South Dakota’s tax is $1.53 per pack, while Montana’s is $1.70 and Minnesota’s is $2.90.
“Does that make sense in this day and age, that we need a 44-cent tax to bring people to this state?” Nelson said, adding, “This is all about health, and it’s about stopping smoking.”
Rep. Rick Becker, R-Bismarck, said the bill was well-intentioned but shortsighted.
“It is not our job to raise taxes to try and mold people’s behavior to what we think is a better and more healthy lifestyle,” he said.
A companion bill, Senate Bill 2322, would raise the cigarette tax to $2 per pack.
Predicting a possible statewide vote on the issue, Nelson warned that if the Legislature doesn’t act to increase tobacco taxes, “the people of North Dakota will, and I hope you like what they come up with.”
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