As of today (August 1), smokers and vapers in New Jersey are paying more for their products following a new tax hike. The state has increased the tax on cigarettes by 30 cents, bringing the total to $3 per pack, and has tripled the tax on liquid nicotine from 10 cents to 30 cents per cartridge.
For a person who smokes a pack a day, the new tax increase will add an extra $109.50 to their yearly costs, for a total of $1,095 in state taxes alone. When the national tax of $1.01 per pack is included, the total yearly tax burden on a pack-a-day habit reaches nearly $1,464. Vapers, who do not pay a federal tax, will see their state tax costs on each nicotine-filled pod triple.
The tax hikes are expected to generate an additional $51 million in revenue for the state, with $2 million from the tax on vape products going into the Health Care Subsidy Fund.
According to the American Lung Association, a 10% increase in tobacco taxes can lead to a 4% reduction in adult consumption and a 7% reduction among younger people. New Jersey’s cigarette tax now ranks as the 12th highest in the nation. This is a smaller increase than what Governor Phil Murphy had proposed in 2020, which would have made New Jersey’s tax among the highest in the country.
The tax hike comes as the state continues to see a decline in cigarette smoking. In 2022, about 10% of New Jersey adults smoked, a significant drop from the 17% who smoked in 2011.
Despite the high tax on cigarettes, the American Lung Association gives New Jersey an “F” for its tobacco taxes, noting that the state does not tax large cigars, smokeless or loose tobacco, or e-cigarettes.