Nebraska State Senator Seeks Tobacco Tax Increase

With the opening of another state’s legislative session, another elected official is seeking an increase in tobacco taxes. This time, it’s Nebraska State Senator Mike Gloor of Grand Island.

Gloor has introduced LB1013, which seeks an increase in the tax levied on cigars and other tobacco products from 20 percent of the wholesale cost to 31 percent. That means that a cigar that has an MSRP of $9.50 would go from costing approximately $11.40 at the register to approximately $12.45. The bill also seeks a $1.50 increase on the cigarette tax, raising it to $3.62 per pack.

Interestingly, the money raised from the tax, which Gloor says will generate upwards of $120 million in its first year, won’t go exclusively to healthcare or a similar social service, a good chunk of the revenue will be used to offset a property tax reduction. Gloor has characterized it as a way to compensate society for the financial drain of smokers, with $45 million designated as tax credits for property owners, with another $45 million earmarked to fund personal property tax exemptions that was approved by the legislature in 2015.

This is the third time that Gloor has sought such an increase, though his previous proposals haven’t made it out of the Legislature’s Revenue Committee, though he is now chairman of that committee, which could certainly help its chances.