Since Colorado’s 64-cents-a-pack cigarette tax increase took effect
in January, sales have declined so much that many cities and counties
are experiencing double-digit drops in cigarette-tax revenue, even while the state is collecting millions more.
The
new tax is large enough that the state still collected $70 million more
from cigarettes during the first seven months of this year than last,
according to state figures.
But cities and counties, which get only a slim cut of money from the
new tax, have seen drops, typically in the tens of thousands of
dollars, in the amount of money they receive from cigarette taxes.
– Denver Post –
You see, the free-market is well,
free and as such cigarette buyers are going online, they’ll probably do
the same thing in NC. Revenues derived from taxes are not static,
they are affected by the price of a product purchased. Any
projections about revenues from cigarettes will be wrong unless they
include a provision for the drop in sales associated with the new tax
and online purchases.
