A series of increases in the taxes on cigarettes and other tobacco products and a new tax on inhalant delivery products, approved by Oregon voters in November, will go into effect January 1, 2021. These are the first of what are expected to be many tax increases enacted by the Oregon Legislature in the upcoming session to backfill holes left by revenue shortfalls due to the COVID-19 recession.

As a result of the passage of Measure 108, which was placed on the November ballot by the Legislature by HB 2270, consumers will see the following:

• The cigarette tax will increase by $2 per pack of 20 and $2.50 per pack of 25.
• Little cigars, collectively weighing 3 pounds or less per 1,000, must be sold in sealed packages of at least 20. The packs will be taxed as cigarettes and will require an Oregon cigarette tax stamp.
• Inhalant delivery systems, such as vaping and e-cigarette products, will be taxed at a rate of 65% of the wholesale purchase price.
• The cap on the tax on cigars increases from 50 cents to $1.

Revenue produced by the tax changes will be used by the Oregon Health Authority to fund health care coverage for low-income families, including mental health services, and public health programs, including programs addressing tobacco- and nicotine-related disease. Critics of the tax have pointed out that this is an unstable source of continuing revenue and put the state in a position of having to deliver expected services in the future.

The bill, supported mostly by Democrats, was placed on the ballot during the 2019 session. The current tax on cigarettes is $3.33. After the increase, the tax will be $5.33, which will make Oregon's cigarette tax the highest in the nation.

Photo by Luka Malic on Unsplash


--Staff Reports

Post Date: 2020-12-29 14:58:17

Last Update: 2020-12-29 15:24:02