BISMARCK — Cigarettes, nicotine pouches and vaporizers could get more expensive after the North Dakota Senate voted Monday to raise taxes on tobacco and alternative products.
Senate Bill 2281 passed on a 26-21 vote. It still has to pass the House and receive the governor’s signature before becoming law.
Proposed North Dakota Tobacco Tax Increase
The bill would raise North Dakota’s cigarette tax from 44 cents per pack, the third-lowest in the nation, to 69 cents, ranking it 10th-lowest.
It would also impose a 31% tax on the wholesale purchase of cigars and a 28% tax on the wholesale purchase of tobacco products, alternative products — such as nicotine pouches or
electronic smoking devices — and electronic vaporizers by vendors.
Purpose of the Tax Increase
The increase in taxes on tobacco and alternative tobacco products would be used to establish a Tobacco Tax Distribution Fund, which would provide roughly $12.9 million in grants to local public health units and roughly $12 million to organizations providing 988 crisis hotline services.
Support for the North Dakota Tobacco Tax
Those in favor of the bill point to the fact that North Dakota has not raised taxes on cigarettes in over 30 years as evidence it is time for a change and say the increase provides a public
health benefit without driving business to other states. Even with the tax increase, all states bordering North Dakota would still have a higher tax on cigarettes.
“Smoking is bad for your health,” said the bill’s primary sponsor, Sen. Kathy Hogan, D-Fargo. “This is not complicated. If the increase helps 5% of the people — the smokers — to stop
smoking, then it’s been a success. They win. Their families win, and we win by lowering health care costs related to tobacco use.”
Opposition to the North Dakota Tobacco Tax
Those opposed to the bill call it a “sin” tax — a tax on products deemed by some to be harmful — and argue it would damage local businesses, and grow the black market for tobacco and alternative tobacco products in the state.
The bill earlier received a 5-1 recommendation to pass from the Senate Finance and Taxation Committee.
