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Tobacco tax could be raised dramatically

Posted: 10:24 PM, Mar 11, 2019
Updated: 2019-03-11 23:24:36-04
Tobacco tax could be raised dramatically

OMAHA, Neb. (KMTV) — State lawmakers are trying to figure out anything they can do to give Nebraskans property tax relief and also to fund Medicaid expansion, which voters approved of last November.

One solution is to raise the cost to smoke and use tobacco.

Several bills that would raise the tobacco tax are floating in the legislature.

"The goal is to help people quit and prevent youth from starting in the first place,” says Nick Faustman, Nebraska government relations director for the American Cancer Society, Cancer Action Network.

Fasutman says he’s optimistic that the legislature will do something this year.

The main focus of these bills would raise the price of cigarettes.

Currently smokers pay 64 cents per pack, the proposed bills would take it up to $2.14 per pack.

Other bills, like one from Omaha senator Machaela Cavanaugh, would hit the price of chewing tobacco and cigars, going from 20 to 65 percent, raising the cost of a can by around $2.

Nationally Nebraska is one of the cheapest states to smoke, ranking 42nd, these bills would shoot the state to 14th in the country.

Owners of cigar shops, like Jeff Doll of Safari Cigars and Lounge have deep concerns.

"It would drive people further into the internet,” says Doll.

He says he already has to compete with online retailers, selling the same stuff, with no tobacco or sales tax.

"That puts us behind already, if they raised it to 65 percent I think a lot of us would go out of business. Mainly because you can hit an app, have the cigars here in two days and didn't pay the sales tax and didn't pay the tobacco tax,” says Doll.

Doll says he's not for or against a tax hike on cigarettes, he just wants cigars, and his business, out of the picture.

"That's not our customer and we don't have a dog in that fight. We're just trying to get exempted from that, because we couldn't survive on a 65 percent tax,” says Doll.

While some of the bills would use the extra $110 million from cigarettes to relief farmers and ranchers. Senator Cavanaugh's bill would instead go to funding medicaid expansion, while also providing more money on health initiatives and research.