Tax: WY Tax


Wyoming sees increase in cigarette black market after tax hike
November 16, 2004

RIVERTON — Higher state tobacco taxes imposed 16 months ago have contributed to increased black market trading of cigarettes in Wyoming, a state tax official said.

“We recently seized 2,000 cartons of contraband cigarettes that had come into Wyoming and were about to be sold without the required Wyoming stamp,” Dan Noble, head of the excise tax division of Wyoming Department of Revenue, said.

The 2003 Wyoming Legislature raised the excise tax on a pack of cigarettes from 12 cents to 60 cents. The higher tax took effect July 1, 2003.

Noble said recently that his agency may revoke two or three wholesale tobacco licensees because of violations of state law.

Noble said sale of untaxed cigarettes over the Internet is another threat to the $15 to $20 million in revenue the state receives from taxes on the sale of tobacco products.

Some vendors are blatantly advertising sale of cigarettes over the Internet, avowing that sales are made without applying taxes. And some American Indian tribes are advertising untaxed tobacco products for sale.

Noble said outlets on the Wind River Indian Reservation in Wyoming try to estimate cigarette sales to non-Indians and pay taxes on those sales.

The state revenue department recently conducted simultaneous inspections of 11 tobacco wholesalers. In one site, cigarettes were found with Colorado, rather than Wyoming stamps.

Tom Jones, lobbyist for the tobacco wholesalers, said most wholesale tobacco businesses are family-owned and run, investing heavily in stamp application equipment and abiding by all the laws.

Noble said his agency has chosen not to publicize wholesalers found in violation of state law.


Report praises cigarette tax for reducing smoking, raising revenue
January 6, 2005

LARAMIE, Wyo. (AP) — A tax increase approved in 2003 has reduced cigarette use and bolstered state revenue, and experts believe another increase would do the same.

The excise tax increase boosted revenue from around $500,000 per month to $1.5 million per month, according to a report by the University of Wyoming’s Survey and Analysis Center for the Wyoming Department of Health.

Revenue was up despite the fact that the number of packs sold fell 17.4 percent over the year following the increase, university officials report.

Marc Homer, assistant research scientist with the center’s Tobacco Prevention and Control Evaluation team, speculates that another tax increase would further boost revenue while further slowing cigarette consumption.

He points out that cigarette excise taxes are still higher in surrounding states. “Currently the average per-pack tax for Wyoming and the six states on its borders is 80 cents,” he said.

In Montana, a recent increase put the excise tax much higher: $1.70.

“States with cigarette excise taxes higher than Wyoming’s, such as California (87 cents) and New York ($1.50) have successfully reduced consumption while increasing revenue,” the report says.

“Spit tobacco use in Wyoming is more than double the national average. Increasing the excise tax on other tobacco products in Wyoming could similarly benefit the state by increasing revenue and by deterring adults and youths from using spit tobacco and other products.”

The report cites studies showing that a 10-percent increase in cigarette prices reduces overall smoking among adults by about 4 percent. “A consensus view is that for every 10-percent rise in price, there will be a 7-percent decrease among young people smoking,” the report says.

The Centers for Disease Control estimates that smoking-caused health costs nationwide add up to $7.18 per pack sold in the United States.

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