Price

Raise the price of tobacco

Minnesotans agree: We can do more to prevent kids from becoming addicted. Increasing the price of cigarettes is the number-one way to prevent kids from ever smoking. The tobacco industry uses tactics like low prices, easy-to-hide devices, kid-friendly flavors and high levels of nicotine to addict the next generation. Minnesotans want to counter the tobacco industry and protect kids from addiction. Raising the price of tobacco would help adults quit and prevent thousands of kids from starting.

• The COVID-19 pandemic demonstrates the need for strong public health policies to improve lung health and reduce commercial tobacco addiction.
• The youth tobacco epidemic demands swift action from all levels of government.
• Minnesota faces stalled adult smoking rates, and we all pay the price for tobacco’s harm.
• Increasing the price of tobacco will prevent kids from using tobacco and nicotine products, help smokers quit and save lives.
• Tobacco taxes are supported by a majority of Minnesotans and are effective at improving health.
• Increasing tobacco taxes is a triple win for Minnesota because it will raise revenue while reducing health care costs and improving health.
• Higher tobacco prices – coupled with dedicated funding – are urgently needed to address Minnesota’s stalled adult smoking rates and youth tobacco epidemic.
• High tobacco prices can counter the tobacco industry’s aggressive marketing to youth and young adults.
• Tobacco-related death and disease disproportionately affect vulnerable communities.

The COVID-19 pandemic demonstrates the need for strong public health policies to improve lung health and reduce commercial tobacco addiction.

• Coronavirus disease 2019 (COVID-19) is a deadly respiratory disease.
• Current or former smokers are at increased risk for severe illness from COVID-19.[1]
• Communities targeted by the tobacco industry, including Black and Indigenous Minnesotans, are some of the hardest hit by COVID-19.[2]
• It is more important than ever that we prevent commercial tobacco use and provide free help for tobacco users to quit. All Minnesota residents can access free quitting help through 1-800-QUIT-NOW and QuitPartnerMN.com.
• Raising the price of tobacco products will prevent youth from starting and encourage adults to quit smoking.

The youth tobacco epidemic demands swift action from all levels of government. 

• Youth vaping remains at epidemic levels. An estimated 3.6 million young Americans use e-cigarettes.[3]
• The federal government (Food and Drug Administration) has wide-ranging authority to regulate all tobacco products, but its 2020 flavor policy only included a temporary ban on some pod-based, candy-flavored e-cigarettes.[4]
• The FDA’s failure to remove all flavored e-cigarettes from the marketplace has led to dramatic increases among flavored products still available.[5]
• In Minnesota, 26 percent of Minnesota 11th-graders reported using e-cigarettes in 2019 – a 54 percent increase since 2016.[6],[7]
• Younger students are also using e-cigarettes, with 11 percent of 8th-graders and 16 percent of 9th-graders vaping in 2019 (a 95 percent and 75 percent increase, respectively, since 2016).[8],[9]
• We need an all-hands-on-deck approach to protect the next generation from lifelong tobacco addiction. 

Minnesota faces stalled adult smoking rates, and we all pay the price for tobacco’s harm.

• An estimated 574,000 Minnesotans – 14 percent of the state’s adults – still smoke and quitting rates have dropped.[10]
• Smoking remains the leading cause of preventable death and disease, and more than 6,300 Minnesotans die each year from smoking.[11]
• Smoking costs Minnesota over $7 billion a year: more than $3 billion in excess health care costs and $4 billion in lost productivity.[12] That’s too much.

Increasing the price of tobacco will prevent kids from smoking, help smokers quit and save lives.

• The youth tobacco epidemic has erased decades of progress to lower overall youth tobacco use.[13],[14],[15]
• Youth are two to three times more responsive than adults to price increases.[16] Every 10 percent increase in cigarette prices reduces youth smoking by more than 5 percent[17] and youth initiation by 10 percent.[18]
• A $1.50 per pack increase would[19]:
  • Keep 13,200 Minnesota kids from becoming addicted adults;
  • Decrease youth smoking by 13.6 percent;
  • Help 24,300 current smokers to quit;
  • Save 10,100 Minnesotans from premature smoking-related deaths; and
  • Prevent more than $800 million dollars in long-term health care costs.

Tobacco taxes are supported by a majority of Minnesotans and are effective at improving health.

• A 2020 poll found 62 percent of Minnesotans support increasing tobacco taxes and dedicating that revenue to funding prevention efforts.[20]
• Since 1993, 53 percent of all smoking declines in Minnesota are attributable to tobacco price increases.[21]
• In the year after Minnesota’s 2013 tobacco tax increase:
  • Smoking prevalence declined significantly and youth and young adult smoking fell dramatically;[22],[23]
  • 60 percent of smokers made a quit attempt and 15.6 percent successfully quit; [24] and
  • Smoking among 18-to-24-year-olds fell to 8.5 percent in 2014 from 22 percent in 2010.[25]

Increasing tobacco taxes is a triple win for Minnesota because it will raise revenue while reducing health care costs and improving health. 

• Tobacco taxes are less volatile than other state revenue sources, such as income or corporate taxes, because tobacco sales are less affected by economic slowdowns or recessions.
• Minnesota’s revenue estimates are reliable for predicting new revenue from increased tobacco taxes and fees.
• Increasing taxes on all tobacco products, including a $1.50 per pack increase on cigarettes, would raise more than $140 million a biennium.[26]
• We all pay the costs of smoking-related health care. Each Minnesotan pays an estimated $593 a year in smoking-related health care costs – even if you don’t smoke.[27]
• Reducing commercial tobacco rates will improve health for Minnesotans now and in the future.

Higher tobacco prices – coupled with dedicated funding – are urgently needed to address Minnesota’s stalled adult smoking rates and youth tobacco epidemic.

• Price and tax policies are important parts of a comprehensive approach to tobacco control.
• The CDC recommends that Minnesota spend $53 million per year in order to have an effective, comprehensive tobacco control program.[28] Minnesota is only spending a fraction of that recommended amount and funding is declining.[29]
• The state of Minnesota collected nearly $760 million in tobacco taxes and settlement fees last year, but only spent 1 percent of that on tobacco prevention and treatment.[30]
• The state can – and should – dedicate revenue from future tobacco tax increases to youth prevention and treatment efforts.

High tobacco prices can counter the tobacco industry’s aggressive marketing to youth and young adults.

• The U.S. Surgeon General called the tobacco industry the root cause of the smoking epidemic because of its promotion of tobacco products to youth.[31]
• Each year in Minnesota, the tobacco industry spends more than $100 million promoting their deadly products, not including e-cigarette ads.[32]
• Most Minnesota students (88 percent) report seeing ads for e-cigarettes in the past month.[33]
• Tobacco companies use cheap, flavored products as a way to entice young people to try tobacco and become addicted to nicotine.[34],[35]
• High tobacco prices are a proven long-time approach to combating youth smoking. Emerging evidence suggests higher prices have the potential to reduce youth e-cigarette use.[36]
• There are other non-tax strategies that can raise the price of tobacco products, including restricting tobacco coupons and discounts and closing loopholes on devices.

Tobacco-related death and disease disproportionately affect communities targeted by Big Tobacco.

• The tobacco industry markets their products to youth, Black, American Indian and other specific populations, contributing to higher rates of tobacco-related death and disease.
• Black Americans are 53 percent more likely to die of heart disease.[37]
• Diseases from commercial tobacco use such as heart disease, cancer, diabetes, stroke and lower respiratory disease are the leading causes of death for American Indians in Minnesota.[38]
• Low socioeconomic status (SES) smokers suffer disproportionately from the health effects of smoking, and were more likely than higher-SES smokers to reduce smoking and increase quit attempts after Minnesota’s 2013 tax increase.[39]
• Cheap tobacco prices only benefit the tobacco industry. Lowering smoking rates and easing health disparities would create improved health outcomes, reduced inequities and lower health care costs that would benefit all Minnesotans.

Tobacco Tax Fast Facts:

• Cigarettes: A pack of cigarettes sold in Minnesota is subject to a $1.01 federal tax, a $3.04 state excise tax and a $0.63 state cigarette sales tax. On average, a pack of cigarettes costs $9-10 in Minnesota. The Commissioner of Revenue annually sets the cigarette sales tax based on a survey of Minnesota retail cigarette prices. Minnesota has the 8th-highest cigarette tax in the nation. (CTFK chart here)
• Other Tobacco Products: All tobacco products that are not cigarettes (including the nicotine portion of e-cigarettes) are taxed at 95 percent of the wholesale price. (CTFK state-by-state chart here)
  • E-cigarette devices and accessories are not subject to this wholesale tax; they are only subject to regular sales tax.
  • A single premium cigar has a state maximum tax of $0.50.

• Helpful Nonpartisan Resources: MN House Fiscal Issue Brief – Cigarette & Tobacco Taxes, MN House Research Summary – Regulation of Electronic Cigarettes.

For more information, view our fact sheet.