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RICHMOND, Va. -- Virginia is one of six states to raise cigarette taxes this year, and advocates of tax increases are predicting an overall decline in consumption, reported the Cavalier Daily.
Richmond overhauled the state's tax code in spring 2004 amid claims of needing to right Virginia's fiscal direction. In addition to raising the state sales tax and beginning a phase-out of tax age deductions, the state approved a 17.5-cent increase on packs of cigarettes effective Sept. 1, to the delight of anti-tobacco lobbyists.
A second 10-cent hike will take effect July 1, 2005, bringing the total state tax per pack to 30 cents.
Prior to the hike, the state had the lowest tax rate in the nation -- 2.5 cents per pack -- and legislators last increased the tax on cigarettes in 1960.
The state is not alone in raising cigarette taxes. Five other states also increased their cigarette taxes this year, including Pennsylvania, Alabama, Hawaii, Michigan and Rhode Island. Sixteen states in 2003 and 21 states in 2002 also raised their excise tax rate for cigarettes.
The nationwide average cigarette tax is 84 cents, and even with the raised 20-cent tax rate, Virginia's tax rate still ranks 45th in the nation. Other Southern states lag even further behind the national mean. Major tobacco states' average tax rate is 15.3 cents, according to the Washington, D.C.-based Campaign for Tobacco-Free Kids.
To the west, Kentucky has not increased taxes on cigarettes in more than 30 years and, with Virginia's increase, the Bluegrass State now has the lowest cigarette tax at 3 cents. North Carolina's tax rate stands at 5 cents, South Carolina's at 7 cents.