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Increasing taxes on cigarettes, cigars and vapor products could be on the buffet of revenue-raising options Washington lawmakers consider to erase a looming budget shortfall.
Legislation discussed in the House Finance Committee on Thursday would boost taxes on an array of tobacco products to generate $23.1 million for the general fund in the next two-year budget.
While it will cover only a sliver of the projected $6 billion gap, the dollars would help pay health care and societal costs linked to the effects of smoking and vaping, the bill’s sponsor told the committee.
“I feel very strongly that those who are most prone to utilize this product should be the people paying for the impacts of this product,” said Rep. Kristine Reeves, D-Federal Way.
Reeves shared that her mother started smoking menthol cigarettes at age 9, eventually becoming a three-pack-a-day smoker. She died of lung cancer when she was 60. Her nicotine habit, Reeves said, led to other addictions including substance misuse and alcohol abuse.
Reeves said she’s had a “lifetime struggle” with asthma from her exposure to secondhand smoke. The bill is about “ensuring accountability” and taxing tobacco products at a rate “that is going to bring value to the community for those who are most impacted.”
Students from Lake Washington High School urged the committee to back the legislation.
“I’ve seen peers struggle with nicotine addiction before they even turn 18. I’ve watched students hide in restrooms and sneak out during class because of this compelling dependence,” said Liana Khachatouriansoradehi. “By passing House Bill 1416 you are choosing to help my friends, smokers or not, by taking a step in protecting us against addiction and investing in healthier futures.”
Representatives of the Association of Washington Business, Washington Retail Association, Cigar Association of America and Washington Food Industry Association voiced opposition.
They said higher taxes will push up product prices, leading to fewer sales and less income for small business owners. Some argued it could lead individuals to cross into neighboring states to make purchases.
“We understand the desperate need to get revenue this year. Unfortunately, we don’t think this is the right answer,” said Katie Beeson of the Washington Food Industry Association. “We know that tobacco tax increases actually result in a direct decline in sales which will have an impact on your smallest local retailers.”
With the budget shortfall looming, Democratic lawmakers in the House and Senate are batting around many ideas for raising enough revenue to avoid deep cuts to programs and services.
Republican lawmakers say they soon expect to see proposals for a “wealth tax” on intangible assets like bonds and stocks, a payroll tax imposed on companies with many workers earning high wages and surcharge on business taxes paid by the state’s largest corporations. Democrats have floated these tax options but have not yet put them forward in bills.
Taxing tobacco products is one of the smallest generators of new dollars now under discussion. The legislation would increase the tax on a single cigarette by one-and-a-half cents. That would raise the tax on a pack of 20 cigarettes by 30 cents to $3.33. The typical price of a single pack runs a little more than $10, according to a fiscal analysis of the bill.
The levy on cigars would rise seven cents to a maximum of 72 cents apiece. Little cigars would be taxed one-and-a-half cents more, bringing the total to nearly 17 cents apiece.
For smokeless tobacco, also known as moist snuff, the tax on a consumer-sized can or package weighing 1.2 oz or less would go up a quarter to $2.78 and by 21 cents to $2.31 on larger size cans.
Vapor products, such as electronic cigarettes and cigars, are subject to sales and use taxes and an additional tax tied to the amount of liquid nicotine or consumable solution. As proposed, the tax on containers of 5 milliliters or more would go up a penny to 10 cents per milliliter. For all other vapor products, the tax would be 30 cents per milliliter of liquid or solution, a three-cent bump.
If the bill is enacted, proposed increases would go into effect Jan. 1, 2026.