Tobacco Taxes

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Alabama’s excise tax per pack of cigarettes: $0.425
Alabama’s excise tax collection for the
fiscal year ending June 2002: $62,451,000Sales tax on tobacco products: 4.00%
Local tax on tobacco products: $22,920,455Federal excise tax per pack of cigarettes: $0.39
Total federal excise tax collections in fiscal year 2002: $7,512,700,000

Who Profits from
Cigarette Sales?

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Comparing Excise Taxes on Cigarettes, Beer and Wine

 

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Number of six-packs of beer that must be sold in Alabama to produce the same state excise tax revenue generated by one carton of cigarettes: 5.5

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Number of bottles of wine that must be sold in Alabama to produce the same state excise tax revenue generated by one carton of cigarettes: 4.9


Alabama Smokers’ Contributions
to the State Economy – FY2002

In 2001, Alabama smokers comprised only 23.8%1 of the adult population in the state. Here is what they already pay because they choose to buy a legal product:

 

Smokers Pay Excise Taxes2 $ 89,615,107
Smokers Pay Sales Taxes2 $ 52,543,790
Smokers Pay Tobacco Settlement Payments3 $ 110,388,904
  $ 252,547,801
Smokers’ Economic/Tax Profile 2001

 

  • Income1
Alabama smokers’ median household income $ 28,097
Alabama nonsmokers’ median household income $ 35,744
  • Working Families Pay More1

45.5% of Alabama smokers had household income LESS THAN $25,000

ONLY 8.6% of Alabama smokers had household income EQUAL TO or GREATER THAN $75,000

The impact of smoker payments on the incomes of working families was more than THREE TIMES the impact on higher income smokers. Those who can afford it least pay a disproportionate percentage of their hard-earned income in smoker payments.

  • Smoker excise tax/sales tax/tobacco settlement payments liability in 20024
Total average paid per Alabama smoker in excise and sales taxes $ 176
Cost per Alabama smoker for settlement payments to Alabama $ 136
Total annual payments to Alabama per smoker $ 312
Total annual payments to Alabama per nonsmoker $ 0

 

Alabama Smoker Facts 5

  • Total smokers’ payments to Alabama in FY2002 were
    • Nearly twice as large as state excise taxes on alcoholic beverages in FY2001 ($128.8 million).
    • Significantly greater than corporate income taxes ($180 million) in FY2001.
    • Eleven and one-half times as large as Alabama’s FY2001 financial institutions excise tax ($21 million).
  • Total smokers’ payments could support FY2003 general fund and earmarked appropriations for:
    • Department of Public Safety ($129.9 million) AND the Department of Senior Services ($54.9 million) COMBINED.
  • Total smokers’ payments could support FY2003 education trust fund and earmarked appropriations for: Alabama State and Alabama A&M; Universities COMBINED ($173.3 million); OR Troy State University ($133.9 million); AND the Alabama Institute for the Deaf and Blind ($57.4 million), OR the Department of Rehabilitation Services ($134.4 million) with $188 million left over!

 

TOTAL SMOKER CIGARETTE PAYMENTS TO ALABAMA
 
Per year: $ 252,547,801
Per day: $ 691,438
Per hour: $ 28,810
Per minute: $ 480
Per second: $ 8
CIGARETTES DON’T PAY TAXES –
ALABAMA SMOKERS DO!!

 

    1. 1 Centers for Disease Control’s Behavioral Risk Factor Surveillance System, 2001
    1. 2 Orzechowski & Walker, Arlington, Virginia; from state revenue department, includes local excise tax estimate of $22,920,455 from the nearly 300 Alabama counties and cities that levy local cigarette excise taxes.
    1. 3 PriceWaterhouseCooper
    1. 4 U.S. Census Bureau, 2000 state population and Centers for Disease Control’s Behavioral Risk Surveillance System, 2001
    1. 5 Tax comparisons are from the State of Alabama Department of Revenue, 2001 Annual Report, online at

http://www.ador.state.al.us/

    1. , except alcohol tax revenues, which are from the U.S. Census Bureau “2001 State Government Tax Collections,” online at

http://www.census.gov/govs/www/statetax01.html

    1. . Budget Comparisons are from the State of Alabama Executive Budget Office, “State General Fund: FY2003 Appropriations,” and “State Education Trust Fund: FY2003 Appropriations,” Online at

http://www.budget.state.al.us/stgovfin.html

    1. .

Master Settlement Agreement Payments To Date
$373,548,268 has been paid to Alabama since the Master Settlement Agreement was signed on November 23, 1998.

Alabama Tobacco Laws

No Laws Found

The reprinting of this information from the Coalition, does not constitute a representation or admission by RJRT that such information is accurate, complete, or a proper characterization of the laws concerned. The Coalition for Responsible Tobacco Retailing is a cooperative effort among retailers, wholesalers and manufacturers who share a common goal: to do all they can to prevent tobacco sales to minors.

 

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