After voters approved the tax hike of tobacco products in November, the new taxes take effect Jan. 1 across Oregon.
Oregon smokers will pay more per pack — and vapers will taste their first tax on tobacco ever — as new voter-approved revenue raisers take effect in the New Year.
Measure 108 won support of 65% of the electorate, or roughly 1.5 million voters, during the November election. But how much you pay depends on what product you use. Here’s how much users can expect to pay beginning on Jan. 1, 2021.
• Smokers buying standard 20-cigarette packs will see their price jump $2 per pack, for a total tax of $3.33
• Those buying 25-cigarette packs will pay $2.50 per pack
• E-cigarettes, vapes and all other “inhalant delivery systems” will be taxed at 65% of their wholesale price. The tax applies both to the device used to deliver nicotine, as well as the “pods” containing the vape product.
• Cigars will remain taxed at 65% of their wholesale price, but with the max tax raised from 50 cents to $1 per cigar.
Additionally, little cigars, defined as those weighing 3 pounds or less per thousand, will be required to be sold in packs of 20 at the same rate of $2 per pack.
The federal tobacco tax of roughly $1 per pack will continue to apply.
After subtracting expenses and enforcements costs, 90% of the revenue will be used by the Oregon Health Authority for the “maintenance and expansion” of medical services for low-income families, including mental health services. The remainder must be spent by OHA on public health programs, including those serving tribes, as well as public health campaigns encouraging Oregonians to quit puffing entirely.
The Oregon Legislative Revenue Office predicts the cigarette tax will raise about $325 million every two years, while the vape tax will generate $25 million per two years and the cigar tax another $1.5 million.
Oregon will now have the highest cigarette tax rate in the Western U.S., according to the Tax Foundation. Cigarette taxes are about $3 per pack in Washington, $2.87 in California and just 57 cents per pack of smokes in Idaho.
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