NH Might See Higher Cigarette Tax

The residents of southern New Hampshire have long been familiar with residents of Massachusetts coming across the border for cheap cigarettes. The high taxes in Massachusetts on tobacco products have enticed many smokers to come and buy their cartons here to satisfy their lifestyle at a discount. Be aware out-of-staters hunting for deals as well as instate smokers, you might soon have to fork over more for a pack.

Governor John Lynch has proposed raising the tax per pack from $1.08 to $1.33, a rise of 25 cents. The reason? The state’s $225 million revenue deficit in NH’s two-year budget.

“New Hampshire, like states across the nation, is being impacted by the slowdown in the national economy,” said Lynch. “We know our families are feeling the impact, and so is state government.”

The proposed tax increase is expected by Lynch to bring in around $22 million for the state. Concerns about losing the price advantage to Maine and Massachusetts is not seen as a problem to Lynch who stated that the two neighboring states are also proposing similar cigarette tax hikes. Massachusetts, for instance, already has a $1.51 tax per pack with an additional 5% sales tax.

Also included in the proposal is a plan to reduce the 20 percent discount given to outlets that purchase wine from New Hampshire to 10%. This cut is expected to bring in $10 million.

Both proposals are part of the governor’s plan to cut state spending by $125 million, raise revenues by $40 million, and to borrow $80 million in the short term to help with school building projects across the state.