Once Stalled, A Cigarette Tax Hike Is Moving In Oregon Capitol

With just weeks left in Oregon’s legislative session, Democratic leaders have put another contentious issue on their to-do list: a tobacco tax hike.

In a hearing Thursday, the House Revenue Committee took up House Bill 2270, a long-dormant bill to raise taxes on cigarettes and other products. After making substantial amendments, the committee moved the bill on.

The bill’s newfound momentum sets up what could be another divisive fight as the session approaches adjournment. As with all revenue-raising measures, three-fifths of lawmakers will have to approve the bill to pass it.

The new version of House Bill 2270 contains many of the same details it did when introduced by Gov. Kate Brown at the outset of session. The bill would:

  • Raise taxes on cigarettes from $1.33 per pack to $3.33 per pack, bringing Oregon roughly in line with taxes in Washington and California.
  • Eliminate a 50-cent cap on taxes for premium cigars and mandate that those cigars cost more than $3 apiece.
  • Subject e-cigarettes and other vaping products to the 65% wholesale tax currently imposed on other non-cigarette tobacco products.

Amendments approved Thursday add a number of notable changes.

The bill now contains no preemption on local taxes for vaping products, meaning cities and counties could choose to tax them. HB 2270 also now has a provision referring the tax increase to the November 2020 ballot, should it pass the Legislature. And the bill specifies that some money raised from the tax increase could be spent on mental health care — a key priority for lawmakers this year — and on smoking-related health problems among disproportionately impacted groups.

Revenue staffers haven’t said how much money the bill could raise in total, but Dae Baek, a senior economist with the Legislative Revenue Office, told lawmakers it could generate $160 million from the cigarette tax increase alone.

The governor’s office has estimated the bill would generate $95 million in 2019-21 budget, if it goes into effect in December 2020. It’s expected to raise nearly $350 million every two years after that.

Read more at https://www.opb.org


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