Sunday, November 22, 2009

New Florida cigarette tax boosts state budget

Cigarettes sales are down 27 percent in Florida during the last four months, thanks to a new $1-a-pack tax designed to balance the budget and cut down on smoking.

But despite the drop in sales, tobacco-tax collections in Florida are high and holding steady. That's because state economists accurately factored in the decrease in sales of smokes when they initially forecast the revenue from the surcharge that went into effect July 1.

The new tax, which helps fund Medicaid, will raise $881 million this year and $907 million the next, the economists forecast Thursday when they analyzed cigarette-sales data.

Florida's state tax now stands at nearly $1.34 per pack -- about 91 cents more expensive than Alabama's tax and about 97 cents more expensive than Georgia's tax, which is the 47th lowest state tax in the nation. In the 14 Florida counties that border the other two states, cigarette sales have decreased an average of 34 percent a month since July, compared to the same four-month period last year, according to statistics released Thursday from the state's Department of Business and Professional Regulation.

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