Monday, May 17, 2021
May 17, 2021

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New Oregon tobacco tax hikes cigarette prices $2 per pack

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Smokers will pay $2 more in taxes per pack of cigarettes starting Friday, the day a series of steep voter-approved tobacco taxes go into effect and dramatically change Oregon’s nicotine landscape.

State cigarette taxes will more than double, giving Oregon the sixth-highest cigarette taxes in the country at a total of $3.33.

Electronic cigarettes also will be taxed for the first time in Oregon, and the cap on cigar taxes will double.

Tobacco is by far Oregon’s leading cause of preventable deaths, with about 7,800 fatalities in 2018, the latest state data available shows. That’s more than the next six leading causes of preventable death combined, including obesity, alcohol use and car crashes.

Research has shown that high taxes lead to less smoking. Using the results from one recent study of U.S. smoking habits and tax rates, Oregon’s smoking rate could drop to about 10%, down from the 15% that state officials logged in 2019.

“We’re going to see what happens,” said Hammy Singh, an employee at the 8th & Grape Street Market in Medford.

Customers have been telling Singh that they’re going to quit or switch to rolling tobacco, which is cheaper in bulk than cigarettes.

Others have been hauling out cartons upon cartons of cigarettes this week, preemptively saving $20 a pop on the 10-packs, Singh said.

Puan Bui, owner of the Southeast Portland convenience store Quick Stop, said many of his customers are already low on cash because they lost their jobs in the pandemic and the extra $2 will probably price them out of the habit.

The average cost of a pack will likely jump to around $8.33, similar to the current average price in Washington.

An overwhelming two-thirds of Oregon voters approved the taxes in November, reflecting a gradual but persistent change in public attitudes toward smoking. Just 13 years ago, a $12-million tobacco industry campaign against a similar measure crushed an effort to raise cigarette taxes.

This time, the ballot measure was virtually unopposed.

Those who get their nicotine through devices that vaporize liquid containing the addictive stimulant also face a big price bump. Those products include devices with replaceable pods, such as Juul, as well as disposable e-cigarettes and pricier devices that are more versatile but require greater maintenance and commitment to the habit.

Vapor devices and products will be taxed at 65% of the wholesale price, up from no tax at all. In a hypothetical scenario where companies don’t mark up their products, a store that now charges $16 for a pack of four Juul pods could soon be charging more than $26.

Lung damage from vaping drew the alarm of health officials about a year ago after more than 2,800 people fell seriously ill after using vape products. Nearly 70 people died, including two in Oregon. While most of those cases were connected to marijuana-based vape products, not nicotine, the national concern morphed into a broader effort to fight a rise in youth vaping.

Oregon’s new taxes could reduce vaping. One 2018 study involving nearly 24,500 middle and high school students nationwide showed that a 10% price increase for disposable e-cigarettes cut the number of days users vaped by just under 10%.

Cigar taxes can vary because they are set at 65% of their wholesale price. But, starting Jan. 1, the current 50-cent maximum will be raised to $1.

The state has estimated it will haul in about $166 million more a year from the new taxes, most of it coming from the cigarette tax.

After paying for management of the tax, 90% of the money will go to the state’s health care program for the poor, called the Oregon Health Plan. The rest will go to programs for helping people quit tobacco.

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